Cut Daily Spending to Slash Mortgage Interest and Accelerate Mortgage Payoff!

“Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.” – Albert Einstein.

In the case of a Mortgage, compounding interest multiplies debt at an accelerated rate. So, by reducing debt on a regular or lump sum basis means that over time you enjoy the benefits of paying less money towards your mortgage and reduce the term of your mortgage by years.

Therefore we wanted to share a powerful strategy on why making regular and lump sum payments towards your mortgage will not only pay off your UK mortgage quicker, but will also reduce interest payments, and save you money overall.

Why not quickly check for yourself! Play with our Overpayment Calculator here to see how much time and money you could save over the period of your mortgage by treating some of your daily expenses or digital subscriptions as overpayments.

Small Contributions = Big Impact

Let’s illustrate with an example:

Suppose you replace a daily £3 coffee at Starbucks with a regular monthly mortgage overpayment.

Using a £100,000 mortgage over 25 years with an interest rate assumption of 5% for the term, that £3 daily overpayment would reduce the total amount of interest paid by £19,391 and shorten the mortgage term by 5 whole years!

See for yourself how making this daily overpayment can save thousands in interest and shave off several years off your remaining mortgage term.

Make something small into something larger

If you really want to see how a little goes a long way work out how giving up a daily coffee AND a lunchtime sandwich just ONCE a week.

You can do it here at our Overpayment Calculator. see what a huge difference it makes? It not only reduces your mortgage interest term by years but the amount of money you’ll save on your interest payments is substantial. It’s better in your pocket than in the banks’ pockets.

Just a small sacrifice can a substantial impact on your financial future.

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Here Are The Ways Supercharge Your Mortgage Repayment Strategy

Reduce Interest Payments

By making additional payments towards your mortgage principal, you’ll effectively reduce the outstanding balance on which interest is calculated. This applies to both interest-only and full capital and repayment mortgages. With an interest-only mortgage, reducing the principal reduces the total interest paid over the term. With a full capital and repayment mortgage, reducing the principal not only reduces interest but also accelerates the repayment of the loan.

Freedom & Peace Of Mind

Being mortgage-free provides a sense of security and peace of mind. You no longer have to worry about meeting monthly mortgage payments or the risk of losing your home if you encounter financial difficulties in the future. By eliminating your mortgage debt it can free up a substantial portion of your monthly income. With no mortgage payment to worry about, you have more flexibility to pursue other financial goals, such as saving for retirement or you can simply enjoy what makes you happy. It’s up to you!

Pay Off Your Mortgage Quicker

Whether you have an interest-only or a full capital and repayment mortgage, making extra payments will shorten the time it takes to pay off your mortgage. This means you’ll be debt-free sooner and save significantly on interest payments over the long term.

Take Back Control

Overpayments can typically be set up easily via standing order or other methods. Plus, you have the flexibility to start and stop these payments as needed. Just be mindful not to breach any limits that might trigger early repayment charges.

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Taking proactive steps to make extra mortgage payments can yield tremendous benefits regardless of your mortgage type.

Making additional payments (or overpaying) towards your mortgage can dramatically cut the amount of interest you end up paying by reducing the outstanding mortgage balance, while also allowing you to reduce your monthly payment or become mortgage-free sooner.

To discuss how you can supercharge your mortgage repayment strategy simply get in touch with us today.

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Contact Us Overpayment Calculator