It won't be 3% of €300,000 though.
Why not?
It will be a very small bit less as some capital will be paid off during the year.
[broken link removed]
April 5, 2011 @ 12:38 pm | by Conor Pope
I am constantly trotting out the maxim that if something seems too good to be true then it is too good to be true. Well, I should have paid more attention to it when writing the article on how to cut the cost of your mortgage which appeared in The Irish Times yesterday. In that article I said that by paying a mortgage twice a month instead of once a month, more than €50,000 could be be knocked off a €300,000 mortgage over the course of a 30-year term. I said the savings would come at no additional or immediate cost to the mortgage holder.
This was wrong.
The Jackal
I am concerned that your post might confuse people.
The original article mistakenly suggested that if you pay the same amount of money each month, but part of it two weeks early, you will save thousands.
You are suggesting something different. If you increase your repayments, you will pay off your loan quicker. It does not matter if you do it every two weeks or if you just pay off a lump sum time when it suits you.
Brendan
You don't really need a calculator. The extra month should be better if you pay that month in the first half of the year. Either way the difference won't be huge. I'd have thought it would all be simpler just to increase your regular payment by 8.5% (unless maybe you're on a really keen Tracker and have the extra cash on a good deposit rate).Anyone good a calculators? I'm wondering which saves more money - over paying via 26 fortnighly payments (so 1 month extra in a year) vs paying an additional 1 month lump sum at year-end.
I'm keen of the idea of fortnightly payments because if you do this from the very start, you'd never have missed that extra month payment you make over the course of a year.
That wouldn't give you the flexibility to revert to lower payments if your circumstances changed. If you take a 30 year term and decide to pay enough each month to pay it off over 20 years, you can always revert (whenever you want) to the lower 30 year repayment level without being put through the wringer by your bank.Or you could just structure your mortgage over a shorter term from the beginning and pay it over 12 months.
Or you could just structure your mortgage over a shorter term from the beginning and pay it over 12 months.
That wouldn't give you the flexibility to revert to lower payments if your circumstances changed. If you take a 30 year term and decide to pay enough each month to pay it off over 20 years, you can always revert (whenever you want) to the lower 30 year repayment level without being put through the wringer by your bank.
I've been doing fortnightly repayments to NIB for more than a decade now.NIB apparently in process of offering fortnightly repayments
Give me some credit (no pun intended). I can see my mortgage account via online banking. The payments are credited instantly. NIB made a big marketing fuss about offering flexible repayments, including fortnightly and lump sums in the late 90s.You may be making fortnightly payments to the mortgage feeder account but a payment is only credited to the mortgage account monthly.
Very interesting article and thread , just wondering do any of the banks
have an online facility to pay extra payments off your capital.
I know i can view my outstanding mortgage amount online but if i had extra cash in my current account it would be nice to be able to take
it off the mortgage balance if and when possible.
I'm not confusing anything. I moved from being paid monthly to fortnightly in 2000. At that time, I contact my branch, NIB College Green, and arranged to pay my mortgage fortnightly instead of monthly. They recalculated my mortgage, and there was a small reduction in the overall term arising from the slightly earlier payments. I've been paying fortnightly ever since. The only credit transactions appearing on my mortgage account are the fortnightly payments, which are dated with the dates that they leave my current account.You seem to be confusing additional capital repayments which can be made at any time by EFT with the regular monthly repayment.
it might seem very lazy, but i completely agree with you.
Somehow the facility to give to charity or pay a parking fine online makes me more likely to do it.
It would be the same with the mortgage. If i could transfer it out of my current account and see it immediatly reduce my mortgage balance i'd be less likely to put it off. I recently paid off a chunk, and i think it's needless hassle to have to write a cheque with instruction, physically post it to the mortgage division and then check up that they've carried out your instruction correctly.
In case you haven't picked up from Complainer's posts, NIB let you do this - their online banking is very flexible.Very interesting article and thread , just wondering do any of the banks
have an online facility to pay extra payments off your capital.
I know i can view my outstanding mortgage amount online but if i had extra cash in my current account it would be nice to be able to take
it off the mortgage balance if and when possible.
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?