Dan_The_Man
Registered User
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- 58
Hi ...Colleague bought a house 3 yrs ago
Initial Mortgage = 300K (3yr fixed @ 3.1% 25yr term)
Value of House = 420K (approx)
Current Mortgage = 240K
2 key points here:
Bank allowed lump sum payments during the last 3yrs
Bank allowed 10% monthly overpayments from start (more about that below)
3yrs is up bank now offering 2yr fixed @ 2.8%
I did suggest switching providers for lower rate (and maybe some cashback)
However colleague is telling me that the bank is allowing the original over payment which based on new
reduced loan amount and rate is now like a flexible 30% over-payment (colleague very comfortable with this).
I get that this type of overpaying could be achieved by reducing the term with another provider but I can see value in the flex.
By flex i mean: 1. optional 30% overpay 2. the bank seem cool allowing them to pay off lumps which may not be allowed else where.
If their goal is to clear off mortgage quick as possible what should they do?
In writing all this down ..i may have answered their question ..but open to other opinion in case I'm missing something.
Initial Mortgage = 300K (3yr fixed @ 3.1% 25yr term)
Value of House = 420K (approx)
Current Mortgage = 240K
2 key points here:
Bank allowed lump sum payments during the last 3yrs
Bank allowed 10% monthly overpayments from start (more about that below)
3yrs is up bank now offering 2yr fixed @ 2.8%
I did suggest switching providers for lower rate (and maybe some cashback)
However colleague is telling me that the bank is allowing the original over payment which based on new
reduced loan amount and rate is now like a flexible 30% over-payment (colleague very comfortable with this).
I get that this type of overpaying could be achieved by reducing the term with another provider but I can see value in the flex.
By flex i mean: 1. optional 30% overpay 2. the bank seem cool allowing them to pay off lumps which may not be allowed else where.
If their goal is to clear off mortgage quick as possible what should they do?
In writing all this down ..i may have answered their question ..but open to other opinion in case I'm missing something.
Last edited: