Online Calculator | Now Is The Time To Get A Fixed Rate Mortgage

Now Is The Time To Get A Fixed Rate Mortgage

Let’s find out just what a fixed rate mortgage is, and how it may benefit you.
We’ll then look at using a mortgage overpayment calculator.
The fixed rate gives you security for a while & the overpayment calculator might give you a pleasant surprise.

There are a few different types of mortgage, the fixed rate mortgage being only one of them.
You get a fixed interest period for several years.
Locked in interest rates mean locked in monthly payments.

Do fixed rate mortgages have any plus points?
You benefit by not having the yo-yo effect on your monthly payments. They stay the same every month.
It’s a lot easier to plan financially knowing your payment will be the same.

No matter what the average interest rate is, your rate will stay the same.
There have been some alarming short term interest rate rises in our recent history.
People on variable rate mortgages are much more likely to be affected by rapid rises in interest rates.

There can be certain circumstances when a fixed rate mortgage may not be right for you.
The arrival of a new child could mean you need a bigger home and need to move. These are reasons to avoid fixed rate mortgages.
Any sort of situation like this can cause unexpected charges by way of redemption penalties.

A redemption penalty is a charge that almost always comes with a fixed rate deal.
These charges can be pretty steep, and come at a time when you don’t need the extra stress.
There is never a good time to be hit with extra charges so think carefully before taking the fixed rate mortgage.

During the term of your mortgage it’s worth considering paying a bit extra each month if your budget will stretch.
You may have a fixed rate but it doesn’t mean your payments have to be fixed if you can afford extra.
You lender will not tell you it’s possible to pay extra as they prefer you just pay the minimum.

What are the best reasons to paying a bit extra every month?
The extra payments reduce the sum owed quicker and the result is you save years off the term of your deal.
Not only do you save years, you can also save thousands and thousands of your hard earned money.

In what way does a mortgage overpayment calculator work?
You can enter all the relevant figures from your particular deal.
You then enter any extra amount you can afford to pay. Or enter various value for fun.

The calculator will show you how many years you can expect to shorten your mortgage by.
It also gives you a figure in cash that you can expect to save.
The figures in years and cash saved will increase the more you overpay each month.

You might be pleasantly surprised at the savings to be made.
Quick example, 25 year mortgage borrowing 100,000 at 5%.
Making an overpayment of 50 every month will save you 12,000 and knock over 3 years off.

Nice savings on a 50 extra payment. But what happens if you pay an extra 100 though?
Using the same example mortgage from earlier we now pay 100 extra.
You get to shave over 6 years off the length and over 20 grand saved. That’s pretty good.

One more advantage is that the years you save are payment free, nothing at all to pay.
It’s definitely a reality for you to be free of your mortgage years before planned.
Lenders will not tell you this, they like to keep this a secret.

In our example where we saved six years off the length with a hundred a month overpayment.
A six year saving translates into about a forty grand saving in cash.
This saving is yours as you will never need to give it to your lender as you originally planned.

In this article we’ve looked at the potential of fixed rate mortgages.
You get a good night’s sleep and regular level payments.
We also had a look at a mortgage overpayment calculator and the potential savings that can be had.

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