reducing the term of your mortgage

C

catley

Guest
can anyone explain how partial redemptions to reduce the term of a mortgage work? i have been asking questions of my lender for a while but am unable to get clear answers-a few weeks ago -a 100euro lodgement got me a 1 month reduction--last week it gets me zero--now 200euro is required to get 1 month off!! i know that a reducing balance affects the amount you get off but 150 euro gets zero now too!!
Even stranger the larger the amount you lodge at one time the less you get off!!!--a few weeks ago 2000euro got 10 months off, 1000euro got 5 months off,800euro got 4months off,500 got 3 months off,200 1 month off and 100 got 1 month off--now 500 gets 2 months off !!!
 
dont forget to factor in changes in interest rates, as they increase the 100 euro will reduce the mortgage for a lesser time than it would have when interest rates were lower, any to reduce teh term by 1 month you will nees to lodge more money than before.
 
However on the flip side as rates increase, every prepayment you make will save you more over the term of the mortgage, as well as shortening the term.
 
yeah, that's true but does anyone have a formula i can use so that i can know how to get the best reduction for the least amount of money?
 
Also try out the calculator to see how much less interest you pay over the life of the mortgage if you arrange for payments by the fortnight instead of by the month
 
You must log in or register to reply here.
Back
Top