Mortgages - Additional Payment to Mortgage

Discussion in 'Mortgage arrears & negative equity case studies' started by Jw1212, 16 Nov 2018.

  1. Jw1212

    Jw1212 New Member

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    2
    It was requested that I take out a 30 year mortgage when i applied for same even though i had requested 25 years. My repayments are manageable and so I like to add in extra into my mortgage account when i have it. This seems to reduce the monthly figure then. I requested from the bank to take 6years of the term and increase the payments which they have sent me documentation on but i know that I am then tied into having to pay this amount.

    Basically what i want to know is what is the most cost efficient way of paying off your mortgage early
    1) Is it any use paying off additional amounts or is this just reducing the repayment amounts over the term by a slight amount
    2) Would it be best to go with the repayment amount that is being charged and top it up each month to the amount that i want to pay each month so that it is the same amount coming off the mortgage each time.

    Thanks
     
  2. username123

    username123 Frequent Poster

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    1,318
    Assuming its a variable, you can pay whatever you want, whenever you want. Just have the direct debit for the normal amount, related with the 30 years. Then once a month pay your overpayment manually, that will reduce the cost for normal mortgage payment amount for the next month's repayment slightly, so you would slightly increase your overpayment amount, so that the 2 amounts add up to the same each month, say E2000 for simplicity. Keep doing this over and over and you will see the normal monthly going down, and your overpayment going up - I do this now with AIB. If you keep doing this, it will pay off the total earlier, without having officially reduced the term.
     
  3. username123

    username123 Frequent Poster

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    1,318
    This has been discussed on this forum alot so have a search for other threads on similar topic.