Decreasing your mortgage repayments

T

tivanagh

Registered User
Messages
29
Hey

Is it possible to put 20k against five years of a mortgage if you break it into tranches?
i.e. if say my next 5 years of my mortgage is 80k could i take 20 off it thus reducing my payments off the said period?
 
If you reduce the repayments you'll extend the term of the mortgage.
AFAIK you need to remortgage to increase the term.
 
What i am saying is if it was possible to break down the morgage into tranches for a typical 35 year mortgage.

EG.
Mortgage loan 350K
Interest 140K
Total 490k
7 Tranches each of five years.

Tranche 1 70k for years 0-5.

Monthly repayment is say 1300 per month
Put 25(typical SSIA) against this. The monthly repayment
then for the first 5 years in theory becomes
a repayment on 45k and not the 70.

Your monthly repayment is therefore
1300/70*45= 835.

The rest of your mortgage could then remain at circa 1300 depending on prevailing interest rates etc
 
Hi Ive never posted on these boards but do have a back ground in accounting and mortgages. I completely understand what you want to do, ie. reduce monthly payments for a period of time, well one option would be to put money in a high interest account that you could make monthly withdrawals so that you would still be making interested, your plan wouldnt alot you interest on your money. You could take 835 plus your monthly draw down from account this would effectivily leave you doing what you want to do. Ok I hope this made sense.
 
Fair enough if its not possible but i was just thinking of a way that would decrease my mortgage in the long-run while also properly helping me out from a cash-flow point of view in the short-run. I know i could funnel cash from a deposit account on a monthly basis from a deposit account to pay the mortgage but still the same interest expense would be incurred on the mortgage in the long-run. Why is it therefore not possible to pay off part of a mortgage and get the benefits now and on an effective basis over a short period and not 33/34 years down the line!!
Is it really so impractical??
 
You must log in or register to reply here.
Back
Top