Pay in excess to save the excess payment

Payment for a loan is usually done on regular monthly intervals and the principal amount is paid combined with the value of interest.  Overpayment is a repayment method in which an additional amount is paid over and above the fixed monthly payment, this additional amount is paid to make sure that the amount gets repaid earlier that the fixed time and the interest decreases eventually diminishing the burden on the buyer of the loan.

Work out your savings with a mortgage overpayment calculator

Mortgage overpayment calculator is a way through which the amount to be paid in excess is calculated depending upon how does the borrower wants to carry it and the interest as well as the entire amount to be paid on the due date is decided.

Keys points of the mortgage overpayment calculator

The various key points on which the mortgage overpayment calculator works include the following:

• The calculator works on the assumption that the interest rate for the entire period of mortgage would remain the same, and the amount is calculated accordingly. The same interest rate remains prevalent throughout one mortgage period.
• The calculator assumes and takes every month to be of same length, that is, the numbers of days in each month are taken to be the same and the amount to be paid is decided accordingly.
• The amount to be repaid are displayed in a rounded off figure to the nearest value.
• The time saved, that is the time withdrawn from the repayment list is displayed to the nearest closest month.
• Per day interest is calculated and monthly interest is therefore calculated accordingly for repayment.
• The calculator assumes that the overpayment is done monthly and not generally, the interest rate is calculated accordingly and the time saved as well is also decided as per the said repayment options.

Why should you overpay your mortgage?

Through overpayment the interest amount is saved as the time for repayment gets reduced. Generally overpayment is done on monthly basis in addition to the amount due to the lender. While you calculate on overpayment calculator you get an idea beforehand as to how much exactly you would be able to save at the end of the mortgage term and in this way you get encouraged to pay excess the due amount and save interest money.

Advantage of the calculating tool

This tool helps you to decide whether making overpayments would be profitable for you or not, and in this way you get a chance to make your interest burden lighter. There are two ways of making extra payments, one is paying back the amount in lump sum and the other way out is by combining an extra amount with already existing fixed payment, by the latter you would not face excessive burden and the loan amount would get repaid easily and conveniently.

And through this latest tool, that is, mortgage overpayment calculator, the time and money that you would save at the end of the mortgage term is known as a result of which you get to make better plans. Pay in excess so that you could save the extra payment which gets out in the form of interest.