mortgage not decreasing

C

coman

Guest
took out a very small mortgage in 2001 - 40,000, today it stands at 36,500. i took it out at variable rate. I cannot understand why it has,nt decreased anymore, it seems very little. It is over 25 years. So thats, 3,500 i have paid off in 6 years?? Took my mortgage out with Bro in Law who is branch manager so i feel i cannot question him on it! Was thinking i might switch altogether to Halifax. can someone explain this i think it might have something to do with interest.
 
My guess(& I stress guess) is that,most of the money u've paid so far is towards the interest,while a small amount only goes towards the capital.However as time passes an increasing percentage of the capital is paid off.
 
Without knowing the specific details of your mortgage, mortgage payments in the earlier years of a mortgage tend to be more interest than capital repayment. As the years go by the % of your monthly payment that comes off the capital increases so you will see the capital amount fall more rapidly.

For such a small mortgage I would recommend you increase the payments on it as that can significantly reduce the term of the mortgage and thus the amount of interest you pay. That said I'm not aware of your financial circumstances so this may not be possible.
 
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