My Mortgage Deal ends in two months....

My Mortgage Deal ends in two months....had a letter from my Mortgage provider....my monthly payment will go down by £250 per month :shock:
Yeeehaaa....no more baked beans on toast twice a week.....no more value bread (disgusting stuff)....I can buy new socks and pants and all kinda stuff.

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Whats a mortgage

Harryburgundy":f2g9aomk said:

My Mortgage Deal ends in two months....had a letter from my Mortgage provider....my monthly payment will go down by £250 per month :shock:
Yeeehaaa....no more baked beans on toast twice a week.....no more value bread (disgusting stuff)....I can buy new socks and pants and all kinda stuff.

Click to expand...

And a few more retro bits??

Great stuff - we've actually kept our mortgage payment above the minimum so that we pay it off faster - it's surprising how the overpayments add up in time.

If you're on a fixed mortgage (or a tracker with a collar) they often say that it you want to alter the terms of your mortgage, you'll automatically revert to the standard rate.

Since the SVR is often cheaper at the moment, there is merit in seeing if you're able to do it. Reducing the term of your mortgage is a good one - if you have 25 years left, drop it to 24 or lower.

Clearly there's a risk that interest rates will go up soon and sharply, so be careful.

As Cas points out, the best thing you can do is pay off your mortgage early. Even £1 a day adds up (maybe not at the expense of eating properly, though HB!). Smile.co.uk had a great calculator to demonstrate it, but it seems to have gone now.

Kestonian":42s8xltg said:

Smile.co.uk had a great calculator to demonstrate it, but it seems to have gone now.

Click to expand...

There are shed-loads of mortgage calculators on the net, but Charcol offer a selection...
http://www.charcol.co.uk/knowledge-reso ... lculators/

JohnH":106dnsh7 said:

Kestonian":106dnsh7 said:

Smile.co.uk had a great calculator to demonstrate it, but it seems to have gone now.

Click to expand...

There are shed-loads of mortgage calculators on the net, but Charcol offer a selection...
http://www.charcol.co.uk/knowledge-reso ... lculators/

Click to expand...

Cheers, good spot. The flexible mortgage calculator is what I'm after

£1 a day on a 25 year 250k mortgage pays it off a year early (rate = 5%)

IF your rate is 5% there is a strong chance you could remortgage and lower it, so if you made the same payment on the lower rate you would further reduce your mortgage term!

Pm me if you want more info on your options.

How could I work out my monthly mortgage payments if I only had a pen and paper? I know I could use a simple mortgage calculator, but I am curious to know how my mortgage payment is arrived at. Is it cumulative interest plus principal divided by years and months. Please could you supply a detailed example as I not too hot with maths. For example a £100000 mortgage at 5% over 25 years.
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It depends how your mortgage interest is calculated.

Well, here's one way

The formula is the rather daunting looking

M = P [ i(1 + i)^n ] / [ (1 + i)^n - 1]

Which is a standard compound interest formula (I'm assuming you're not an interest only kind of guy)

i is the rate divided by the number of payments - in your case 5 / (12 * 25)

P is the principal, or amount borrowed

The other thing to remember is that mortgage lenders front load the interest payments, so you pay off all the interest you owe before making a dent in the principal.

Here's an example, with better formatting on the formula

http://www.fonerbooks.com/interest.htm