RandomUser666
New Member
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We currently have an AIP with Avant.
I have a significant amount of Income from Restricted Stock Units in my job. The mortgage we will be taking out is very modest for our total income and would still be affordable if my RSUs became worthless. If all I had was my base Salary the mortgage would still be affordable.
So as long as my income stays the same we would like to overpay to save us some money on total interest amount paid and to try pay back the mortgage for peace of mind.
We will not be neglecting other things like maxing out tax relief on pension contributions, building up emergency fund or saving for family related expenses.
What I am confused about is overpaying during fixed term vs variable rate time or reducing payments vs reducing term.
The avant website says
"If you are on a fixed rate and decide to repay your mortgage in full, make an overpayment above the 10% allowance, change to another product or switch to another lender, you may have to pay an early redemption fee.
With Avant Money the maximum early redemption fee will be 2% of your outstanding mortgage. This will reduce to a maximum of 1.5% from year 11 onwards."
So lets say during fixed term we overpaid by 10% every year. How can that lead to us to saving amount on total interest paid and/or reducing our mortgage term?
What is the difference in over-paying during variable term for these same aspects?
I have a significant amount of Income from Restricted Stock Units in my job. The mortgage we will be taking out is very modest for our total income and would still be affordable if my RSUs became worthless. If all I had was my base Salary the mortgage would still be affordable.
So as long as my income stays the same we would like to overpay to save us some money on total interest amount paid and to try pay back the mortgage for peace of mind.
We will not be neglecting other things like maxing out tax relief on pension contributions, building up emergency fund or saving for family related expenses.
What I am confused about is overpaying during fixed term vs variable rate time or reducing payments vs reducing term.
The avant website says
"If you are on a fixed rate and decide to repay your mortgage in full, make an overpayment above the 10% allowance, change to another product or switch to another lender, you may have to pay an early redemption fee.
With Avant Money the maximum early redemption fee will be 2% of your outstanding mortgage. This will reduce to a maximum of 1.5% from year 11 onwards."
So lets say during fixed term we overpaid by 10% every year. How can that lead to us to saving amount on total interest paid and/or reducing our mortgage term?
What is the difference in over-paying during variable term for these same aspects?