According to MoneyExpert, mortgage experts Charcol recently encouraged mortgage-holders to try to overpay on their payments, in light of the fact that many lenders are no longer making early repayment charges.
Indeed, if you’re in the lucky situation of being able to make overpayments to your mortgage, and are sure your lender doesn’t charge any fees for it, it can be one of the most satisfying uses of your money.
Our mortgage overpayment calculator will show you just how long you can reduce the term of your mortgage by if you make regular overpayments. as well as how much it will save you in the long run.
For example, if you’re repaying your mortgage of £150,000 over 25 years, at an interest rate of 5.75%, simply by overpaying by £20 each month will reduce the term by over a year, plus it will save you nearly £7,000. Of course, this is based on you overpaying that exact amount over the entire term, with the interest rate remaining the same – in real life the interest rate will probably vary over the term, and you’ll probably find that you cannot overpay every month, or you might be able to make other, larger overpayments. Nevertheless, the principle is to make overpayments whenever possible.
I’ve recently paid off a grand of my mortgage and plan to pay off an extra £150 per month for at least the remainder of the year. It is, as you say, a very satisfying experience.
Arkad
The Richest Man in Atherstone