For a lot of people, a mortgage hanging over your head for 25 years can seem like a daunting thought however, mortgages are quite versatile and if you understand your mortgage you may find that, if you do it right, you can have your mortgage paid off sooner than 25 years and also save a lot of money on your interest payments.

So why is over-paying your mortgage one of the best investments that you can make?

You not only chip away at your largest debt but you’re also investing that money back into your home. A mortgage is a huge cost compared to buying something like a Hotpoint HV7f140P washing machine so it’s important to look at as many options to help save you money over the years that you have it. If you decide to move within a few years you’ll have more capital in your property by overpaying and if you don’t decide to move, you’ll have paid more off your mortgage which in turn will have left you with lower repayments so it’s a win-win situation.

Just by over-paying an extra £150 a month off a mortgage of £150,000 with a 3.5% interest rate you could save £19,788 in interest alone. Not only is the saving impressive but, you would have paid off your mortgage in just 19 years.

Figure 1: http://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator

Before you start to over-pay your mortgage, first check that there are no early payment fees or penalties for over-paying with your mortgage company. Even if they do have charges check these to see if you can still save money.

Helpful Tools

Not all mortgages are the same and to get the best results you’d be better off using a Mortgage Overpayment Calculator and use the details associated with your mortgage. You don’t have to pay large amounts if you can’t or don’t want to. By using the example above, just by overpaying £20 per month off your mortgage, can mean paying up 1 year early and saving over £3000 in interest. This means you’ll still be able to buy that luxury Belling FSE60I that you’ve been wanting for so long.

This article was written by Alan Gregor;y copywriter for Appliances Online by day, BWFC follower by night and weekends! You can follow me on Twitter @AlanJGregory.