Could A Mortgage Overpayment Calculator Help You?

Before we start to answer the question in the title. Let's explain what a mortgage overpayment calculator actually is.

Most overpayment calculators come on websites. You could get a standalone bit of software or a spreadsheet to do the job though.
You simply enter the terms of your particular mortgage, or even one you are planning and it throws out figures that tell you how much cash and how many years you could save.

Many people fail to realise (or are not told) that the usual 25 year terms aren't fixed. If you can afford to pay extra you can reduce this by years. If you can afford to pay extra you should.

Basically what an overpayment calculator tells you is if you pay X amount of cash extra each month then you knock Y amount of cash & years of your mortgage.
Sometimes the saving can be staggering. And these savings are yours not the lenders.

OK, back to the question in the title. What could it do for you? The answer depends on your circumstances.

Amounts borrowed and individual mortgages come in many different flavours. But it matters not if you can make a few overpayments as it will still reduce the length. Which is good tidings for you.

If I give you an example of a 100,000 mortgage at 5% interest over 25 years. If you could pay an extra 100 each month from month one. You'd save over 6 years and 20 grand.

Now I don't know how you feel but If I could afford to pay that extra then I most certainly would.
The same mortgage but paying only 50 extra a month still knocks off three and a half years and 12 thousand. Still very nice savings.

In the six years saved in the example you make no payments at all. Many people forget that fact.

This means you don't pay, but save another 40 thousand over the last six years.

If you can't afford or don't plan to make long term payments then at least try to make some extra payments early on. This early overpayment can compound nicely later on making hefty savings.

If you have or are thinking of getting a mortgage you owe it to yourself to have a play with a mortgage overpayment calculator and put your particular figures in it. You may be staggered at what comes out.

Mind you, your lender won't want you to know all this!

Article Source: the-Articles.com

About the Author
Author: MontyBurn
Monty Burn was head of the Voluntary Mortgage Regulator until his sacking for helping too many people



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