But if I save on interest, surely the principal will go down quicker and hence the term will be shorter?When you pay down a mortgage in advance of the contractual payments:
1. The balance falls and you are immediately saving on interest in every case.
2, You are NOT better off if they reduce the term and the repayment is harder to pay - they may not re-extend the term
3. Always keep the term as long as possible when you pay lump sums.
W
have the same ending date. I
, I asked them to send me the statements and if if the over payment would result in reduced term. They sent me back the statements and a letter saying ‘any savings would be on interest Paid’
I called them today and they gave me the original date as my maturity date. I’m waiting in someone to call me back on it.,
hi. I overpaid my mortgage in 2003/4 by €1000 a month for approx 15 months.
I queried that there has been no reduction in principal or term on the load - i.e. I still have the same maturity date and have had the same monthly repayments.
The answer I received from the bank was that 'any savings would be in terms of interest paid on your mortgage'. Is this correct? Surely if I paid less interest, then my balance would be reduced quicker and hence the term shortened? Or am I missing something? thanks in advance.
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