Just refixed it for four years, going through the paperwork my new rate of 3.5% down from 4.69% which works out over the term is pay back nearly double. I'm not a maths genius but 3.5% is double, how do they work this all out?

Compound interest mate

£1 x 25 years of 3.5% is £1.875 but it's worse than that because year one its £1 x 3.5% then year 2 its £1.035 x 3.5% and so on.

Don't forget after your four years it will revert to their standard variable rate which could be really high and that will be factored in on the full term payment total.

If you are repayment mortgage the first payments are mainly interest so you pay very little off the balance initially. So most of the money you have borrowed is attracting interest for a long time

You should be able to overpay by up to 10% without penalty even in the fixed rate period.

If you can manage to do that it will have a dramatic impact on the total to pay for the full term

Yeah, interest only wasn't an option we could have. Plus I wouldn't want it. That kinda makes sense though. It was fixed for the first two years, so I've just refixed it for the next four. If nothing else it helps to budget.

Yeah I can pay up to 10% off fee free, but I don't think il have 18k disposable a year to just throw at the mortgage lol.

You don't need to pay a massive amount off any small amount will help.

Just think £1 borrowed over 25 years costs you £2

Pay £1 off now saves you £2

Just a few hundred quid here and there will make a real difference especially paid in the early years.

if you pay an extra £10 or £20 each month the compound thing then works in your favour

Say you have £100 repayment which is £90 interest and £10 repayment

Pay £110 per month first month is £90 interest and £20 repayment but month 2 will be £89 interest and £21 repayment and so on, because you've paid extra off the loan balance.

The figures aren't exact but you get the idea.

Pay a little extra now early on will have a big impact later.

£50 extra a month starting now will probably take a couple of years off your mortgage

Basically, spend nothing on your zed until your mortgage is paid up! Yeah right! :biggrin:

Not gonna happen in our job bud...lol

 

Although my bike accident compo paid my mortgage off..lol

Haha! Must be due a meeting soon mate.