Saving money on your mortgage

Shopping around for mortgages is so popular these days that many people can be excused for thinking that switching lenders is the only way to save money on your home loan. But there is a much easier way that does not require phone calls, computers connected to the internet, or trips to your bank or building society.

Did you know, for instance, that making overpayments on your mortgage can slash thousands of pounds off your interest bill? Additionally, it will cut the length of time taken to repay your home loan so you get to own your home sooner.

Imagine, say, that you have a 100,000 repayment mortgage, with a 25-year term and an interest rate of 6%. Your monthly payments will be 644, and after 25 years you will have paid back a total of 193,290. In other words you will have paid back 1.93 for every pound borrowed.

If, however, you were to overpay your mortgage by just 50 each month, your total payment would be reduced to 177,279 -- a saving of over sixteen grand in interest. Furthermore, this overpayment shortens the length of the mortgage by 45 months, which means almost four extra years of bliss.

Its is worth being prudent though and ensuring that your will not be penalised by your lender for changing your standing order or making overpayment. In the main, most flexible mortgage lenders will allow you to make overpayments of up to 10% each year. But if your lender doesn't allow this, you have another trick up your sleeve!

Lessening the term of your mortgage from 25 years to 21 years would increase your payments in exactly the same way as overpaying by 50 each month. Mind you, this is a much harsher way to do it because payments are fixed. However, it doesn't prevent you from increasing your term again, should you need to, by simply writing to your provider.

At the end of the day, paying off your mortgage early is simply the best and least risky ways of saving money. By making overpayments to your mortgage of around 6%, your money would be working harder than if you had invested it into a savings account with 7% earnings.5% for a basic-rate taxpayer. For a higher-rate taxpayer, this risk-free and tax-free rate is equivalent to 10%, which is practically unbeatable!

Many people forget that even though we sign up for a 25-year mortgage term there is no earthly reason why we have to stick to this. If you have any extra cash each month, using it against your mortgage can make a huge difference and it can save you thousands of pounds in interest each year.

Good luck on removing that mortgage millstone from around your neck!

Peter Spyr

Adoption Agency In North Carolina4780
Teeth Whitening Los Angeles65601
Diabetes Factsuoovrxxaq
Last Minute Japan Airfare55538
Home Study For Adoption13914
Car Elephant Insurance95658
Switzerland Airfare23166
Texas Wedding Receptions72915
Clearwater Hot Tub47124
Stanley Lexington Office Furniture110
Used Office Furniture In Houstonvxvix
Car Cheapest Insurance Rate77217
Ashley Office Furniture48670
Rings Wedding14941
Adoption Rescue33566
Hot Tub Spa Arbors80805
Hot Tub Spa Productsccnsuttyogc
Airfare Cheap Discount International9
Casual Wedding Dresses21346
Gresham Teeth Whitening56024
10th Wedding Anniversary Giftstqpru
Discount Airfare Italy20425
Wedding Website88293
Furniture Office Used Virginia94495
Rustic Home Office Furniture48036
Consolidated Airfare47537
Sample Images Of Landscaping Designs4
Aa Car Insurance Uk50156
Trial Teeth Whitening87695
Cheap Flight Airfare Ticket65836