Paying full Variable rate mortgage amount, question regarding final amount

A

arikv

Registered User
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Hi, I'm in the process of drawing a small mortgage of less than 100k (divided into two sections for some weird reason).
I actually have save 110% of the price of the house I'm buying (been saving for over 13 years + small inheritance).
The house I'm buying is in need of major "modernization" which is rough estimated at 60k - 80k, hence the Mortgage + I would like to have some spare cash left.
My question is, in the unlikely event that I've some money left after I move in and if I decide to pay off one of the two, do I pay the capital owned or do I owe full amount + interest over life time of mortgage from day one?
So For example if I borrow 50k today at 3.5% variable over 10 years (where rate doesn't change as it's theoretical), if I pay 6000 in 12 months and then on the 13 month want to close the mortgage how much would I be paying 50000-6000 = 44000 Euro?
Or would it be 50000 + (9177 cost of credit over 10 years) - 6000 = 53177

Ant insight is much appreciated
 
If on standard variable rate you will just pay interest until day loan is paid off, you do not pay all the interest up front. If it was fixed there would be a penalty to clear it early.
 
wbbs said:
If on standard variable rate you will just pay interest until day loan is paid off, you do not pay all the interest up front. If it was fixed there would be a penalty to clear it early.
Click to expand...

Thanks, so I understand that if I do clear it within 12 months I only pay the interest for 12 months out of the original life term of the mortgage.
 
You pay interest up to the day you clear it whether that is 6 months, 12 or whatever. Its not an exact number of months necessarily. For example if you take out a mortgage on say the 14/6/2011 and pay it off on the 23/1/2012 then you pay interest for however many days that is.
 

Cheers, I appreciate your very clear explanation.
 
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