Let's begin with a brief explanation of what a mortgage overpayment calculator is and does. It's a little program, maybe on a website or even in a spreadsheet that shows you what you could save if you paid a bit extra each month.
Next let's look quickly at how it can show you how to build a retirement fund. The calculator shows you how much you can save and how many years you can knock off your mortgage term.
The money you save and the money you would be paying over the last few years that you could knock off all goes into a pot for your retirement.
OK, down to facts and figures. A mortgage overpayment calculator lets you input all your mortgage related figures, like the amount borrowed and the interest rate and the length of the mortgage.
It then asks you how much a month you want to overpay. This is a flexible amount and you can play around here with different figures to see just how much you can save.
When you enter the amounts you get a figure out that tells you how much money you could save and how many years reduction to expect.
What do we mean by that? Well, if you put a certain set of figures in for a 25 year mortgage the calculator might tell you that you could save 15 or 20 grand and knock 5 years off the mortgage.
The result is dependant on the figures input. An example of a 5% interest mortgage of 100 grand over the normal 25 years. If you paid an extra 100 every month you could knock 6 years of the length and save yourself 20 grand.
This means your mortgage is done with in 19 years instead of 25 and you save 20 grand. How does this enhance a retirement fund you might ask?
Well, you aren't paying anything for the remaining 6 years, but you thought you would at the outset, so why don't you?
On the example above if you kept paying for the last 6 years you would end up with 50,000. This is 72 times the monthly amount of your usual payment of 685.
At the outset you were willing to go the distance and pay for 25 years, so why not do it and save yourself 50 grand in the process.
When 25 years eventually comes around you have a nice lump sum sat in the bank. This isn't the lenders money, this is all yours.
On the example the payments would be 580 a month and then 680 if you overpaid by 100. It may be difficult in the early years but it gets a whole lot easier to find 680 as the years progress. And think of the nest egg at the end?
You can have a play around with a mortgage overpayment calculator on my site. I'm positive the savings you could make will surprise you.
Next let's look quickly at how it can show you how to build a retirement fund. The calculator shows you how much you can save and how many years you can knock off your mortgage term.
The money you save and the money you would be paying over the last few years that you could knock off all goes into a pot for your retirement.
OK, down to facts and figures. A mortgage overpayment calculator lets you input all your mortgage related figures, like the amount borrowed and the interest rate and the length of the mortgage.
It then asks you how much a month you want to overpay. This is a flexible amount and you can play around here with different figures to see just how much you can save.
When you enter the amounts you get a figure out that tells you how much money you could save and how many years reduction to expect.
What do we mean by that? Well, if you put a certain set of figures in for a 25 year mortgage the calculator might tell you that you could save 15 or 20 grand and knock 5 years off the mortgage.
The result is dependant on the figures input. An example of a 5% interest mortgage of 100 grand over the normal 25 years. If you paid an extra 100 every month you could knock 6 years of the length and save yourself 20 grand.
This means your mortgage is done with in 19 years instead of 25 and you save 20 grand. How does this enhance a retirement fund you might ask?
Well, you aren't paying anything for the remaining 6 years, but you thought you would at the outset, so why don't you?
On the example above if you kept paying for the last 6 years you would end up with 50,000. This is 72 times the monthly amount of your usual payment of 685.
At the outset you were willing to go the distance and pay for 25 years, so why not do it and save yourself 50 grand in the process.
When 25 years eventually comes around you have a nice lump sum sat in the bank. This isn't the lenders money, this is all yours.
On the example the payments would be 580 a month and then 680 if you overpaid by 100. It may be difficult in the early years but it gets a whole lot easier to find 680 as the years progress. And think of the nest egg at the end?
You can have a play around with a mortgage overpayment calculator on my site. I'm positive the savings you could make will surprise you.
About the Author:
Monty Burn published a bestselling book call the Mortgage Bible, download your copy at his website Mortgage Watchdog or have a play with the mortgage overpayment calculator and surprise yourself at how much cash you could save.
No comments:
Post a Comment