It is part reypayment (£12k) part interest only (£21K)
I have overpaid by £10.5K, and want to pay off the mortgage early. What might be the restrictions ? EGG say I cannot withdraw the £10K but I am awaiting them to tell me what the befit of my overpayment has been.
2006-07-03 03:48:43 · 3 answers · asked by davyboy 1 in Business & Finance ➔ Personal Finance
The main benefit from paying off a mortgage early is less interest you pay on the Principal amount borrowed. Thus this reduces the effective interest rate since interest = Principal X time X Trate use of the money. The other thing is you will own your home much sooner and can invest like no other for your future. What else would you like to know?
2006-07-03 03:55:24 · answer #1 · answered by golferwhoworks 7 · 0⤊ 0⤋
You have asked two different questions there - firstly most good banks would in fact allow you to draw back out any overpayment that you had made, subject to a minimum withdrawal amount. Egg are therefore being very inflexible in not allowing you to do that. The benefit however is that hopefully they have been charging you a reduced amount of interest on the smaller balance that the overpayment should have left you with. With regards to paying it off early, you should be able to do this as long as you are not tied into a product such as a fixed rate - however again i wouldnt be surprised if Egg had some other nasty policy up their sleeve!
2006-07-03 10:59:01 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Without seeing the conditions of your mortgage it is difficult to answer, as a starting point go and see a local mortgage advisor (take your mortgage docs with you) and he/she will be in a position to advise you, if you feel you are being unfairly treated or have been mislead in some way by your lender contact the Financial Services Authority. Good Luck
2006-07-04 09:23:00 · answer #3 · answered by MSMORTGAGE 3 · 0⤊ 0⤋