Use A Mortgage Overpayment Calculator To Get A Picture Of How Big Your Retirement Pot Could Be.

Let’s begin with a brief explanation of what a mortgage overpayment calculator is and does. It’s a little program, maybe on a website or even in a spreadsheet that shows you what you could save if you paid a bit extra each month.

Next let’s look quickly at how it can show you how to build a retirement fund. The calculator shows you how much you can save and how many years you can knock off your mortgage term.

Any money saved and any money you would be normally paying in the knocked off years goes into the pot for your retirement.

OK, down to facts and figures. A mortgage overpayment calculator lets you input all your mortgage related figures, like the amount borrowed and the interest rate and the length of the mortgage.

You then put in how much a month you can afford to overpay. You can try different amounts in this part to get different figures that you could possibly save.

When you enter the amounts you get a figure out that tells you how much money you could save and how many years reduction to expect.

Just what we mean by that is depending on what you put in an average 25 year mortgage could be shortened by 5 years and 15 to 20 thousand.

The result of course depends on what situation you are in. A 25 year, 100,000 mortgage at 5% interest could be shortened by 6 years and save you 20,000 just by paying an extra 100 every month.

So your mortgage is finished in 19 years and not 25. Saving you 20 thousand in the process. So what about the retirement fund you ask?

For the final 6 years you aren’t having to make payment but you did originally expect to. So why not?

On the example above if you kept paying for the last 6 years you would end up with 50,000. This is 72 times the monthly amount of your usual payment of 685.

In the beginning you were happy to pay for 25 years so keep paying and this time the savings are yours. You could end up with 50,000.

Then when you arrive at the 25 year mark you have a nice little nest egg in the bank. Which is all yours and not the lenders.

Finding an extra 100 per month in the early years (at least for our example) would be hard for some but as the years go by it becomes easier to find every month. And just think of what awaits you at the finish line.

I have a mortgage overpayment calculator on my site that you can have a play around with. I’m positive the potential saving will surprise, maybe even shock you.