| Mortgage Overpayment Calculator - Can It Help You? |
| Articles - Mortgage |
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Let's find out what a mortgage overpayment calculator is before we go any further.
Let's find out what a mortgage overpayment calculator is before we go any further. Most overpayment calculators come on websites. You could get a standalone bit of software or a spreadsheet to do the job though. You simply enter the terms of your particular mortgage, or even one you are planning and it throws out figures that tell you how much cash and how many years you could save. Many people fail to realise (or are not told) that the usual 25 year terms aren't fixed. If you can afford to pay extra you can reduce this by years. If you can afford to pay extra you should. The overpayment calculator tells you how much cash and how many years you can save, if you were to pay X amount of money extra. Quite often the savings are jaw dropping. The best bit is the savings aren't the lenders but yours. Now, back to the title question. Just what could it do for you? Well, the answer depends. Mortgages are many and varied. Not least in the amount of money borrowed. Nevertheless making a few overpayments can bring the lengths down. Which is good news for you. I'll use a standard example of 100k mortgage over 25 years and at 5% interest. Paying an extra 100 every month from day one would save you in the region of 20k and shave over 6 years off the length. I can't speak for you but I would be looking to pay that extra each month and make those savings. The same mortgage but paying only 50 extra a month still knocks off three and a half years and 12 thousand. Still very nice savings. In the six years saved in the example you make no payments at all. Many people forget that fact. This means you don't pay, but save another 40 thousand over the last six years. You could make a few early overpayments even if you don't plan making them every month. These can add up to a decent saving toward the end of the mortgage. If you've got a mortgage then you really should do yourself a favour and have a go with a mortgage overpayment calculator. Using your individual figures you could be pleasantly surprised at the result. Mind you, your lender won't want you to know all this! DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. Monty Burn published a bestseller call the Mortgage Bible, download your copy at his website Mortgage Watchdog or have a play with the mortgage overpayment calculator and shock yourself at how much money you could save. |