Even if you choose a standard 25-year mortgage
term, you aren't obliged to take that long to clear your
debt.
Many mortgage
lenders now offer flexible features with their
loans.
These generally include allowing regular or occasional lump-sum
overpayments to help you become debt-free more quickly.
For example, if you used a repayment
mortgage (also known as a capital and interest mortgage)
to borrow £100,000 over 25 years at an interest rate of 6 per
cent, you would repay around £644 a month
or £193,390 over the term.
But if you took the same loan and overpaid every month, here's
what would happen
• £25 a month
You would save almost £8,800 in interest
and clear your debt 2 years and 1 month early.
• £50 a month
You would save nearly £16,000 and
be debt-free 3 years and nine months early.
• £100 a month
You would be almost £27,000 better
off and debt-free 6 years and five months early.
A word of warning if you might want to overpay
Check before you take out your mortgage that it allows penalty-free
overpayments and if there are any limits
on the amounts or frequency.
For another way to save interest and pay off your debt early,
read about Offset Mortgages.
Read
enough? Just want a quote? To get
your best mortgage quote quickly and easily we can
put you in contact with a recommended mortgage adviser. It's free,
completely confidential and there's no obligation at all. Simply
fill out the form below
