Mortgages - overpayment etc.

Our mortgage is about £550 a month but kept it at the £745 payment it was before on the fixed rate a few years ago. For the past year and a half I'm putting another £750 in so pretty much £1500 month.
 
Overpaying by about £100 a month at the moment.

Got a 0.89 over base tracker for the lifetime of the mortgage so payment is very low at the moment. Family, 2 kids etc are more important right at this moment to be spending money on but will crank up overpayments in next few months for sure.
 
I overpaid £5k back in the first month as I had borrowed more than I needed.

I've two lodgers who's rent I save entirely to the sum of £835pm. I've unlimited overpayments so am just saving up, filling up ISA's etc and anywhere that gets me a better return (mortgage rate 2.75%).

Within the next 3 years it'll be gone, having just started it in October 2011, it's only a small mortgage. Including the initial overpayment it'll have saved me £18k in interest.

Chances are in 3 years time if rates are still as they are I'll use some of that to buy a new car, as it will be overdue, and a cheap rate of finance if you will.
 
I've overpaid on my Mortgage for 10 years.. Just have a small amount left so I reduced mine by nearly half it's term.

It's a superb investment given that rates are so low and gives you some security should you need it.


better than any IPS or endowment policy.
 
I overpay on my mortgage but the maximum allowed of 10% per month but a couple of IFA's I know have said while the interest rate is as low as it is, there isn't that much of a benefit!?!? - something to do with the money I'm overpaying by is worth more now than it will be in 10-15-20 years!?!? (not 100% sure they are right to be honest - I just like the idea of being mortgage free a damn sight sooner!)

The best decision I ever made was actually choosing a shorter term mortgage rather than the usual 25 years!

When we moved, we re-did our mortgage over 15 years rather than 25 and it's saving us an absolute fortune in interest!

Don't know if it's feasible for you or not but I'm fairly sure it's going to work out cheaper in the long run having a shorter term rather than just overpaying - assuming you can handle the repayments of course!
 
If I had a mortgage of around 180k over 25 years and overpaid by around £100 per month, roughly how many years would this typically knock off? Obviously not an exact science but a rough idea would be good.
 
Zatoichi.uK said:
If I had a mortgage of around 180k over 25 years and overpaid by around £100 per month, roughly how many years would this typically knock off? Obviously not an exact science but a rough idea would be good.
Click to expand...

Based on 3%, but rates won't stay at 3% for 25 years.

Overpaying would save you
£12,322 in interest alone,
and mean you pay it off in full
3 years and 9 months earlier.
Click to expand...
 
Current mortgage there is no point in us overpaying at the moment because the interest rate is lower than you can get from cash savings.

Personally I tend to focus on taking out a shorter term to start with - our first mortgage was a 20 year term. Current mortgage I wish we'd taken a longer term though as because of the above, lower monthly payments would have meant more profit from savings, and also when it runs out we'll never be able to get a rate as good again.
 
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