Jeacle calculator , am i doing calcs correctly

[Thrifty1]

Hi i have entered various information on it this morning but not sure if im doing it incorrectly or missing something.

We took out a mortgage in May 07 for
€302,000 over 25 yrs
monthly payment €1,809.79
total interest repayable €240,918

Now we should be in a position to make a capital payment of €30,000 shortly, adding in this amount and continuing on with same repayments result is
Interest - €177,863
new term 20 yrs 9 months (May 07 - Jan 28)

If doing it another way we waited until the end of the year and switched mortgage the amount owing is €291,813 (according to calculator), if we deduct the €30k and only borrow €261,813 so ,
€261,813 over 20 yrs
Monthly repayment - €1,765
Total interest - €161,713

If we make additional annual repayments of €528 (difference bt 1809 and 1765), then result is this
Interest - €153,486
New term - 19 yrs 2 mths (Jan 09 - Feb 28)

Not much difference in term either way but significant difference in interest repayable - €177,863 and €153,486.

Is this the interest we paid on original mortgage between May 07 and date of switching mortgage in Jan 09, or am i doing something wrong?

 

[ClubMan]

Is this the interest we paid on original mortgage between May 07 and date of switching mortgage in Jan 09, or am i doing something wrong?

Not sure what you mean but the calculator will report the total interest costs (gross - i.e. before any mortgage interest relief) over the full (or effective) term of the loan. And in general terms making a lump sum capital repayment will yield better savings that making regular accelerated repayments. Doing both will be even better. Especially when you allow such accelerated capital repayments to reduce the effective term of the loan and you otherwise stick to the normal scheduled repayments. Always get your lender to agree in writing to your requirements for making accelerated capital repayments to avoid confusion and potential disappointment!

 

[Thrifty1]

Thanks i think i get it now, ill just make a capital payment to reduce the term.

Do you know whether it is better to make an additional €300 a month towards the capital or save it and make an annual €3600 payment or does it make a difference.

Thanks.

 

[ClubMan]

Not sure - you would need to compare the savings of making the regular capital repayment now versus, say, saving it in a c. 8% regular saver account and then paying the accumulated lump sum off after a year or whatever. Use Karl's mortgage calculator above and maybe this regular saver calculator (doesn't work for some people) to crunch the numbers. Don't forget to factor in mortgage interest relief and DIRT to get more accurate answers.

 

[Thrifty1]

Thanks clubman didnt work it was in arabic or something.
I wasnt sure say with interest being calculated on a daily basis would it be better to pay monthly.

 

[ClubMan]

Thanks clubman didnt work it was in arabic or something.

For some reason the calculator doesn't work for some people and displays in Cyrillic or Greek or other characters for some reason. Never figured out why. There are probably other "regular saver" calculators out there somewhere though.

I wasnt sure say with interest being calculated on a daily basis would it be better to pay monthly.

You get no benefit from making payments more regularly than interest is calculated (e.g. daily payments when interest calculated monthly) but if it's calculated daily and you could actually make daily then that could yield even further savings. In fact it's basically the principle on which current account/offset mortgages are based!