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Lump Sum Repayment

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Chil1234 · 23/02/2011 07:24

Not a question, just wanted to share a bit of maths!

My mortgage balance is £80k, fixed rate 6%, 9 years left to run. I can pay off 10% of the balance without penalty. If I do so (£8k) but keep my monthly payments the same, my mortgage term reduces to 8 years and I save a whopping £6000 interest. Can't think of any investment right now that would guarantee a return of £6k on £8k over 8 years.

So if you're in a situation to make regular overpayments on your mortgage or pay a lump sum off the capital - definitely do the maths because the result may surprise you.

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