Re: First year of repayment mortgage, WTF!

public.mark.m@xxxxxxxxxxxxxx wrote:

My point is I paid for the services of a professional, I had asked
advice online before going to the IFA and most people said I would be
better talking to a IFA!

It's extraordinary that after all that you still entertained the foolish
notion that you'd be paying 50/50 interest/capital. The whole idea of
the way standard repayment plans work is that you pay interest on the
amount you owe, plus a bit to reduce the balance, and that the amount
you pay each month, being the sum of those two, stays the same throughout
the life of the mortgage (assuming no interest rate changes or overpayments
or re-borrowings). It is an unavoidable consequence of this that you pay
off less in the early years than in the later years.

I admit it's my own fault and at the time of
taking the mortgage we were desperate

For it to be anyone's fault there must be something wrong, but there is
nothing wrong so it's no-one's fault!

I am in the position to over pay now but not when I took the mortgage
out, and the mortgage docs say its a light adverse and cant be over
paid.

It would be worth looking into whether, instead of overpaying, they would
let you change the term of the mortgage. If it was originally for 25
years, and the end date is 2029, then ask about bringing it forward to
say 2024. This will automatically increase the monthly payments, and so
will have the same effect as overpaying regularly but might not be counted
as "overpayments" by the lender.

Also its 8%,4%,1% of balance on first three years to repay the
mortgage in full. By thsi time next year I will be into the third year
and will pay 1% to get out of it.

Do your sums. Unless the new mortgage you move to has an interest rate
at least 1% lower than your current one, you might be better off just
waiting another year instead of paying this early exit penalty.

.

Quantcast