Not As Good As Sex But Worth Giving A Fixed Rate Mortgage A Try

Well take a look at fixed rate mortgages and how they can be good for you.
We’ll also take a peek at how much you could save with an overpayment calculator.
You get security from the fixed rate mortgage & you may get a nice surprise from the overpayment calculator.

Fixed rate mortgages are one of a few different types of mortgage available.
You get your interest rate locked for the period of the deal, usually a few years.
Because the interest rate is fixed, so are your monthly payments.

What, if any, are the up sides to fixed rate mortgages?
A fixed rate of interest means a fixed monthly mortgage payment.
You can benefit by knowing your monthly payment is fixed which allows you to budget more effectively.

Your payment is locked so it really doesn’t matter what the general rates are doing.
In the not too distant past there have been some real scary rate rises.
If the rates rose drastically over a short term those on variable mortgages could struggle to meet payments.

A fixed rate mortgage could be a mistake for you under certain circumstances.
Moving home in the next year or so. Having a planned or even unplanned child can be reasons to avoid fixed rate mortgages.
Either of these events will cause you to trigger an unwanted redemption penalty.

Nearly all fixed rate mortgages have a redemption penalty attached.
These redemption penalties can hit you hard just when you don’t need it.
These unexpected charges can hurt. Consider carefully whether a fixed rate is the one for you.

A consideration during your mortgage term is to pay a bit extra each month on top of your normal payment.
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 up sides to paying extra each and every month?
You can shave several years off your mortgage term by paying slightly more each month.
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?
It uses figures from your mortgage. Amount, interest rate, length of term etc.
You can put various amounts in as the overpayment. Feel free to play around with this figure.

The calculator will then tell you how many years you might reduce your mortgage by.
You get to see how much money you could possibly save.
Putting bigger figures in the overpayment box will show bigger savings and even more time saved.

You may be surprised at some of the savings you can make.
Quick example, 25 year mortgage borrowing 100,000 at 5%.
By paying an extra fifty each month could save you over 3 years and 12 thousand.

If you can afford to pay 100 extra instead of 50 what would happen?
Paying 100 extra every month using the same example mortgage.
You can knock a staggering 6 years or more off the length and save yourself in the region of 20 thousand.

An extra benefit is the years you save are free from any payment whatsoever.
It’s definitely a reality for you to be free of your mortgage years before planned.
Of course your lender will never tell you this, you have to discover this on your own.

In the example where we paid an extra 100 every month and shortened the mortgage by six years.
This shortening of the mortgage by six years saves you another 40,000 or more.
This saving is yours as you will never need to give it to your lender as you originally planned.

We’ve looked at some of the advantages of a fixed rate mortgage.
Every month you pay the same so you get to sleep easy at night knowing this.
We also had a look at the savings to be made by paying a bit extra every month. It all adds up.