Morgage payments breakdown.

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Hi Folks,

I have a question on the breakdown of Capital & Interest on your monthly payments.......

Lets say someone bought a house in 2000 for E200000 and has been paying a variable rate since then.
I know the majority of your monthly payments in the first 5 - 10 yrs goes off the interest, for example, monthly repayments of E800 lets say is E600 on interest and E200 off the capital for the first couple of years, changing maybe to E400 & E400 after year 10 (just an example for the question)

If the value of the house has risen in the 7 years from E200000 to lets say E800000 and there is E180000 left on the morgage and the person decides to switch morgage provider to avail of the LTV lower rates thats on offer, do they go back to paying the majority of there monthly payments off the interest again instead of the capital ?

Any help appreciated.
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Hi,
No, lets say we started with a 30yr morg we would transfer over to another bank and take out a 23 year morg.

Thanks for your reply.
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unless i am missing something to pay it back in 23 year will be no different with either bank so long as the rate is the same. Most provider have a calculator for you to use. try either of the following sites

[broken link removed]

http://www.jeacle.ie/mortgage/


they should give you the answer you are looking for.
 
Hi,
Thanks for the reply, I will check out those links.
My main point is will I go back to paying E600 interst and E200 Capital if I change banks when lets say im at E400 interest and E400 Capital after 7 years with the original bank.
I will have a look.
Thanks
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The only thing you should really be concerned with is:
a) How much is it costing me to repay 180,000 over 23 years now?
and
b) How much would it cost me to repay 180,000 over 23 years if I switched over to a better rate?

If I saved over €50 a month repayments (difference between 5% and 4.5% over 23 years), I don't think I'd really care if I was paying more interest than capital.
 
At the start of a mortgage you pay higher interest because the outstanding balance is higher. As you make monthly repayments this (slowly) decreases and so more of your monthly repayment is offset against the capital. At the start of your new mortgage you will see that you will be paying more interest than capital but this is because your loan is now for €180,000. By scheduling the loan over a 23 year term you will see the balance reducing quicker than on your original mortgage of 30 years.
 
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