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Paying off mortgage early

(11 Posts)
HollyBollyBooBoo Sun 28-Aug-16 15:58:35

Ideally I would love to pay off my mortgage earlier - wouldn't we all!

I have a £128k, 23 year mortgage at 2.99% and pay £650 a month, how do you work out how much extra you need to pay to reduce the term. For example do I need to double the payments to pay it off in half the time? Thanks!

sandylion Sun 28-Aug-16 16:00:57

Hsbc have an overpayment calculator, you just type in all your information and it tells you how long it will be until you pay it off.

DoubleCarrick Sun 28-Aug-16 16:02:13

Money savings expert has a good over payment calculator. Beware of fees. Usually you are allowed to pay 10% per year without fees

HollyBollyBooBoo Sun 28-Aug-16 16:02:41

Brill thank you I'll look at those!

HollyBollyBooBoo Sun 28-Aug-16 16:11:00

It's so fascinating - thanks for the tip!

CoffeeCoffeeAndLotsOfIt Sun 28-Aug-16 16:24:20

If you've got spare cash as it were, it makes sense to plough it into your mortgage (if you don't have other debts) as the overpayment will go straight against the capital. Whereas your usual £650 a month will include a large proportion of interest. If you chip away at the capital via overpayments you'll pay less interest overall (as the capital balance will be reduced).

But as someone else said, make sure you read your terms so you don't over pay too much.

TaIkinPeace Sun 28-Aug-16 17:47:14

check the limits on your deal and then pug the numbers into my spreadsheet
you should be able to save many, many thousands

HollyBollyBooBoo Sun 28-Aug-16 18:21:44

I can over pay up to 10% without any penalty. It's really incredible how much just £100 a month difference makes.

TaIkinPeace Sun 28-Aug-16 18:33:34

grin
go for it, if they let you and you, push it to the limit
all you are damaging is their profit margin

for the amusement of those who know me from LOTS of debt threads ....

in the spring I took out a £15k 5 year loan to part buy a car
I was pretty sure I had options but the Zopa loan had no penalties and gave me the leeway.
I paid it off yesterday smile

Muddle2000 Mon 29-Aug-16 00:56:37

We cut the term of our mortgage by 2 years just by overpaying £50 a month.
And we were well into the mortgage before we did it as well.
Wish I had done it earlier? You bet I did. Mortgage free is great.

annielostit Tue 30-Aug-16 08:11:43

Our fixed rate only allowed 10% yearly pay offs so check your details.
On the SVR we pay an extra 40%, the balance & interest are dropping rapidly and we've knocked 4 years off a 15 year deal - just 6 months left😀

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