What can it do, and what is, a mortgage overpayment calculator?
It works out how much cash you might save and how many years you can shave off by overpaying each month.
If your monthly payments are five hundred then try paying five fifty or six hundred. You’d be surprised at the results later.
The average mortgage falls over twenty five years and paying a bit extra each month will really mount up over the period of the mortgage.
Even the tiniest amount overpaid each month will result in you knocking some time off the length.
And you get to save a lump of cash as well as you aren’t paying as much interest over the 25 year period.
As an example we’ll look at a 100,000 mortgage over 25 years at around 5% interest.
On this mortgage the payments would be in the region of 580 a month. But if you could afford a 100 extra each month you could build a very good saving.
Doing this could shave over 6 years off the term. Imagine, mortgage free in 18 and a half years.
You also get a cash saving which in this case would be about 20 grand. Imagine saving 6 years and 20 grand. Sounds nice.
Right, I imagine you’re thinking that the 20 grand saving is offset by 22 grand of overpayments during the previous 18 years.
But, the benefit comes knowing that for the last 6 or more years you won’t have to pay a penny. And that amounts to quite a bit saved.
If you picture not having to pay your 580 per month for the last 6 years, this turns out at another 42 grand saving.
What it all means is that if you can pay the 20 grand in overpayments early on, and not towards the end of the mortgage you save 40 grand or more.
Now if those figures don’t get your pulse racing then get checked out medically, you may be dead!
Go check out a mortgage overpayment calculator and see which year you can afford to give your lender the finger!
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