I will now be debt free in the next 3-6 months. I have a mortgage which I took out over 35 years
Making accelerated lump sum or regular capital repayments over and above your repayment schedule and then reducing the effective term of the mortgage will yield significant savings. Use Karl Jeacle's mortgage calculator to model the possibilities.I currently have outstanding loans and bills but, due to a fortunate family happening, I will now be debt free in the next 3-6 months. I have a mortgage which I took out over 35 years, but after looking at online calculators, have found that I would vastly reduce the amount of interest paid if I was to shorten the mortgage term. Although repayments would obviously be higher in the meantime (I can comfortably manage these, being debt free), I would save, from what I can gather, 60k + on interest. Does switching the term of my mortgage involve many implications. Would there be much hassle in doing this. I am currently on fixed rate, but once I come off this I want to change the term to save interest repaid. Hope this makes sense!
I would think that most people knew you meant debt free apart from the mortgage. However let that be a lesson to us all, mortgage is in fact a debt, and dont forget it!
Not a silly question at all. If you are going to make lump sum or regular accelerated capital repayments then get agreement with your lender IN WRITING that these will be paid off the capital balance once made and that the effective term of your mortgage will be reduced. If you don't do this then some lenders may not do it automatically.One more question, if I do these extra payments every month, will they all go towards capital only or will some go to interest, or is the interest all ready fully covered in the existing payments. Silly question probably, just wanted to be totally sure.
Would there be much hassle in doing this ( P60, solocitor's fee, )?
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