Hi all,
My brother attended a property seminar (brainwash seminar!) yesterday. One of the the speakers suggested the following to reduce the term of a mortage-
Change existing mortgage to interest only, overpay the mortage to the difference between interest-only and original repayments (when it wasn't interest only).
The speaker suggested that this approach would enable you to pay off your mortgage quicker than paying in the mornal way (interest and capital as part of a monthly repayment), his reasoning was that in the early years of the mortgage that instead of your repayments going against mainly interest that the overpayment was going straight against the capital element.
Do you agree / disagree? Anyone aware of how this can be proven?
Thanks,
Goldie.
My brother attended a property seminar (brainwash seminar!) yesterday. One of the the speakers suggested the following to reduce the term of a mortage-
Change existing mortgage to interest only, overpay the mortage to the difference between interest-only and original repayments (when it wasn't interest only).
The speaker suggested that this approach would enable you to pay off your mortgage quicker than paying in the mornal way (interest and capital as part of a monthly repayment), his reasoning was that in the early years of the mortgage that instead of your repayments going against mainly interest that the overpayment was going straight against the capital element.
Do you agree / disagree? Anyone aware of how this can be proven?
Thanks,
Goldie.