- Overpayment of £10,000 shaves 3 years from a mortgage and saves over £20,000*
- Flexible mortgage calculator at www.charcolonline.co.uk shows savings available
- But make sure you know when and by how much you can overpay
There has been much talk of a revival in the city, with the traditional bonuses set to rise dramatically from last year. Indeed, one in four city employees surveyed are expecting to receive upwards of double the amount they did for 2004.
Charcolonline.co.uk is showing consumers how overpaying on their mortgage can have a very positive effect on their finances, but warning that borrowers must know the conditions of overpayment.
Whilst not all consumers can look forward to the anticipated £236,000 that all 22,000 Goldman Sachs employees will receive**, even more modest bonuses used correctly can drastically reduce the total amount you will pay on a mortgage.
Ray Boulger of charcolonline.co.uk comments: "Most borrowers will have the ability to overpay their mortgage without incurring any ERCs, and some may not be aware of this. The most common amount which can be overpaid, without incurring ERCs, is 10% per annum, but some allow 5% or unlimited overpayments, all of which allow a large chunk of the mortgage to be overpaid. However, borrowers must be aware of any conditions when overpaying as breaching any terms could result in a large penalty. My advice would always be to check with your lender before making an additional payment.
"In addition to allowing some ERC free overpayments, some mortgages are fully flexible and allow overpayments to be re-borrowed. Such a facility will allow large bonuses to be parked in the mortgage, thus saving interest, until needed for any large expenditure during the following year."
