Well take a look at fixed rate mortgages and how they can be good for you. We'll then take a look at an overpayment calculator for your mortgage. You get security from the fixed rate mortgage & you may get a nice surprise from 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. Locked in interest rates mean locked in monthly payments.
Do fixed rate mortgages have any plus points? Because your payments stay the same you don't get ups and downs in your monthly payments. You get to budget easier every month as your payments remain the same.
Your payment is locked so it really doesn't matter what the general rates are doing. In the last few decades we have seen interest rates almost double in a few short months. You may struggle to meet your payments if you have a variable mortgage and rates rise suddenly.
A fixed rate mortgage could be a mistake for you under certain circumstances. If you think you may move home, or even have another child and need an extra bedroom, then think carefully before taking a fixed rate mortgage. Any situation which sees you changing mortgage can invoke a horrid redemption penalty on you.
Nearly all fixed rate mortgages have a redemption penalty attached. When you can least afford it you could have a charge slapped on you. If a charge like this will hurt you then you must think very carefully before taking a fixed rate mortgage.
It's worth thinking about paying a bit extra each month in addition to whatever you normally pay. You don't have to make the same payment month after month for 25 years. You lender will prefer you make the minimum payment and will never tell you it's possible to pay extra.
If you do pay extra each month, are there any benefits to this? The extra payments reduce the sum owed quicker and the result is you save years off the term of your deal. Not only do you save years, you can also save thousands and thousands of your hard earned money.
What does a mortgage overpayment calculator do? Enter all the figures that relate to your mortgage. You also enter a figure that you want to overpay. You can play around with this figure.
You get to see what sort of length in years you can knock off. It will tell you what sort of cash lump sum you can expect to save as well. Putting bigger figures in the overpayment box will show bigger savings and even more time saved.
Some of the savings can be staggering. If we take a mortgage of 100,000 borrowed over 25 years and assume you get an average 5% interest rate. You could save over twelve thousand and shorten the mortgage by more than 3 years just by paying an extra 50 each month.
That example is paying just 50 extra every month. What if you could afford 100 a month to overpay? The same mortgage example but paying 100 extra every month. You can knock a staggering 6 years or more off the length and save yourself in the region of 20 thousand.
Another plus point is the years you knock off are totally payment free. You could be free of the shackles of your mortgage early by paying a little more now. You won't hear this info from any lenders though. You need to discover info like this for yourself.
If we look at the example where we paid 100 extra and knocked over 6 years off the length. This shortening of the mortgage by six years saves you another 40,000 or more. This saving is yours as you will never need to give it to your lender as you originally planned.
In conclusion we listed a few benefits of a fixed rate mortgage. Every month you pay the same so you get to sleep easy at night knowing this. Also consider the huge potential in making a little overpayment every month. Even small amounts will add up.
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. Locked in interest rates mean locked in monthly payments.
Do fixed rate mortgages have any plus points? Because your payments stay the same you don't get ups and downs in your monthly payments. You get to budget easier every month as your payments remain the same.
Your payment is locked so it really doesn't matter what the general rates are doing. In the last few decades we have seen interest rates almost double in a few short months. You may struggle to meet your payments if you have a variable mortgage and rates rise suddenly.
A fixed rate mortgage could be a mistake for you under certain circumstances. If you think you may move home, or even have another child and need an extra bedroom, then think carefully before taking a fixed rate mortgage. Any situation which sees you changing mortgage can invoke a horrid redemption penalty on you.
Nearly all fixed rate mortgages have a redemption penalty attached. When you can least afford it you could have a charge slapped on you. If a charge like this will hurt you then you must think very carefully before taking a fixed rate mortgage.
It's worth thinking about paying a bit extra each month in addition to whatever you normally pay. You don't have to make the same payment month after month for 25 years. You lender will prefer you make the minimum payment and will never tell you it's possible to pay extra.
If you do pay extra each month, are there any benefits to this? The extra payments reduce the sum owed quicker and the result is you save years off the term of your deal. Not only do you save years, you can also save thousands and thousands of your hard earned money.
What does a mortgage overpayment calculator do? Enter all the figures that relate to your mortgage. You also enter a figure that you want to overpay. You can play around with this figure.
You get to see what sort of length in years you can knock off. It will tell you what sort of cash lump sum you can expect to save as well. Putting bigger figures in the overpayment box will show bigger savings and even more time saved.
Some of the savings can be staggering. If we take a mortgage of 100,000 borrowed over 25 years and assume you get an average 5% interest rate. You could save over twelve thousand and shorten the mortgage by more than 3 years just by paying an extra 50 each month.
That example is paying just 50 extra every month. What if you could afford 100 a month to overpay? The same mortgage example but paying 100 extra every month. You can knock a staggering 6 years or more off the length and save yourself in the region of 20 thousand.
Another plus point is the years you knock off are totally payment free. You could be free of the shackles of your mortgage early by paying a little more now. You won't hear this info from any lenders though. You need to discover info like this for yourself.
If we look at the example where we paid 100 extra and knocked over 6 years off the length. This shortening of the mortgage by six years saves you another 40,000 or more. This saving is yours as you will never need to give it to your lender as you originally planned.
In conclusion we listed a few benefits of a fixed rate mortgage. Every month you pay the same so you get to sleep easy at night knowing this. Also consider the huge potential in making a little overpayment every month. Even small amounts will add up.
About the Author:
The Voluntary Mortgage Regulator got rid of Monty as chief because he was actually saving punters too much cash! Find out how to get a top fixed rate mortgage deal at his site. Try our overpayment mortgage calculator and discover how to save shedloads of cash.
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