Save Boatloads Of Cash With A Mortgage Overpayment Calculator

We’ll have a look at what benefits there are to a fixed rate mortgage for you.
We’ll then take a look at an overpayment calculator for your mortgage.
From definite security with the fixed rate mortgage to potential cash saved with the overpayment calculator.

A fixed rate mortgage is a special type of mortgage where you have a fixed interest period.
The interest rate is fixed, usually for a number of years.
If the interest rate remains static, so do your monthly payments.

What are the advantages of a fixed rate mortgage?
Your payment is fixed because your particular interest rate is fixed.
It’s a lot easier to plan financially knowing your payment will be the same.

No matter what the average interest rate is, your rate will stay the same.
In the not too distant past there have been some real scary rate rises.
A rapid rise over a year or so could really see payments rise for those on standard variable mortgages.

A fixed rate mortgage could be a mistake for you under certain circumstances.
You may decide you need to move house, or even have an unexpected child and simply need more room.
Either of these events will cause you to trigger an unwanted redemption penalty.

Most fixed rate mortgages come tied to a nasty redemption penalty.
At a time when you least need it, you could get hit with a redemption penalty.
If a charge like this will hurt you then you must think very carefully before taking a fixed rate mortgage.

During the term of your mortgage it’s worth considering paying a bit extra each month if your budget will stretch.
You may not realise but you can pay any amount over the minimum monthly payment.
Lenders prefer you to make payments like this but they never inform you that you could pay extra if you wish.

What benefit does paying a bit extra each month have on you and your mortgage?
Topping up your monthly minimum payment means you can knock a few years of the length of your mortgage.
Not only do you save years but you save piles of cash, usually many thousands.

What do you do with a mortgage overpayment calculator?
You enter your mortgage details. The amount borrowed, the length, the interest rate etc.
You can enter a figure that you may think about paying as an extra payment each month.

You get a resulting figure out of the calculator in years you can shave off.
You get to see how much money you could possibly save.
Both the years and cash saved obviously increase if you put in a higher overpayment figure.

You may be amazed by how much you could save.
As an example, borrow 100,000 at 5% over 25 years.
You could save over twelve thousand and shorten the mortgage by more than 3 years just by paying an extra 50 each month.

Nice savings on a 50 extra payment. But what happens if you pay an extra 100 though?
The same mortgage example but paying 100 extra every month.
You get to shave over 6 years off the length and over 20 grand saved. That’s pretty good.

Another benefit is that for the last few years of the original (25 year) term, you don’t pay anything.
It’s definitely a reality for you to be free of your mortgage years before planned.
You never get info like this from your lender. This sort of stuff is kept quiet by the industry.

If we look at the example where we paid 100 extra and knocked over 6 years off the length.
A six year saving translates into about a forty grand saving in cash.
This is 40 grand in your pocket and not your lenders. Overpaying is difficult, make no mistake, but the rewards can be amazing.

In this article we’ve looked at the potential of fixed rate mortgages.
Regular payments and a good night sleep.
We also looked into the future and saw some big savings if you can make a little overpayment now.