Owning your own home

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hippy in reply to @aggi

Am I missing something?

Did you work it out with compounding mortgage interest?
ie. the 2% over 25 years.

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aggi in reply to @hippy

Worked it out at 18 years (my mortgage period) and 2.25%.

Overpaying £500 a month would save interest of ~ £15k (and mean that the mortgage was paid off in 11.5 years).

Investing £500 a month at 5% compounding for 11.5 years would generate interest of ~£24.5k.

I've just discovered that this spreadsheet has a nice option for comparing savings to overpayments http://www.locostfireblade.co.uk/Downloads/MortgageSpreadsheet/Mortgage%20Schedule%20Calculator.xls

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hippy in reply to @aggi

So that's assuming you can make 5% all the time and that interest rates don't rise (which is an unlikely scenario with 18 years).

Does it take into account the 6.5 years of being mortgage free? That's 6.5 years you can invest your previous mortgage payments and the overpayments.

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