Repayment mortgages

"Arthur" wrote

At what interest rate?

Roughly b*gger all, not-a-lot, and a *teeny*, tiny amount. Which is why I switched to a flexible mortgage as soon as possible and started "saving" into my mortgage. In the short term you pay more in interest rates, but if you're disciplined it soon starts to work to your advantage. Obviously not everyone's in a position to save much every month though, so it depends on your circumstances.

Andrew McP

Incremental increase?

It depends on the interest rate and application method.

About half what it would be if the debt were to reduce linearly with time.

At a 6% interest rate, applied monthly at 0.5%, you'd have paid off about

0.14%, 0.88%, and 5.7% of the initial debt, respectively, after 1, 6, and 36 months.

The amount of debt outstanding when M months remain, out of a total N month term, is (1-f^-M)/(1-f^-N) of the original, where f is the monthly interest rate plus one, i.e. f=1.005 for the example above.

Take a look at the mortgage calculator at

You can enter your mortgage details there, and it'll show you a breakdown of each month, with the interest and principle paid off. Quite interesting.

HTH.

In message , Ronald Raygun writes

Not at 7.25% he wont. In fact even 5.4% is over the odds. Coventry flexx is offering 5.1% (I think) with no penalties.

In message , Arthur writes

DONT TAKE A NEW (OR INCREASED) ENDOWMENT!

Already up to speed on that, John.

Thanks.

Arthur