We’ll have a look at what benefits there are to a fixed rate mortgage for you. Then prepare to be amazed at the savings made with a mortgage overpayment calculator. From definite security with the fixed rate mortgage to potential cash saved with the overpayment calculator.

Of the various types of mortgage available, the fixed rate is only one of them. You get your interest rate locked for the period of the deal, usually a few years. Locked in interest rates mean locked in monthly payments.

Do fixed rate mortgages have any plus points? Because your payments stay the same you don’t get ups and downs in your monthly payments. You get to budget easier every month as your payments remain the same.

No matter what the average interest rate is, your rate will stay the same. There have been some alarming short term interest rate rises in our recent history. People on variable rate mortgages are much more likely to be affected by rapid rises in interest rates.

There can be certain circumstances when a fixed rate mortgage may not be right for you. Moving home in the next year or so. Having a planned or even unplanned child can be reasons to avoid fixed rate mortgages. These types of situations could invoke a nasty redemption penalty on your fixed rate mortgage.

Most fixed rate mortgages come tied to a nasty redemption penalty. These charges can be pretty steep, and come at a time when you don’t need the extra stress. Think hard before you take a fixed rate mortgage as these charges can really disrupt your plans.

During the term of your mortgage it’s worth considering paying a bit extra each month if your budget will stretch. You may have a fixed rate but it doesn’t mean your payments have to be fixed if you can afford extra. The lenders would love you to do this but they will rarely tell you that you can indeed pay extra.

What are the best reasons to paying a bit extra every month? The extra payments reduce the sum owed quicker and the result is you save years off the term of your deal. You also save a lot of money in the process, sometimes a staggering amount.

What do you do with a mortgage overpayment calculator? You enter your mortgage details. The amount borrowed, the length, the interest rate etc. You then enter any extra amount you can afford to pay. Or enter various value for fun.

You get to see what sort of length in years you can knock off. You get to see how much money you could possibly save. Both the years and cash saved obviously increase if you put in a higher overpayment figure.

You may be surprised at some of the savings you can make. If you had a 25 year mortgage and borrowed 100 grand at 5% interest. You could save over twelve thousand and shorten the mortgage by more than 3 years just by paying an extra 50 each month.

The last example was an overpayment of 50 every month, but what happens if you pay 100 extra. The same mortgage example but paying 100 extra every month. In this new example the time saved is over six years and the financial saving is more than twenty thousand.

Another plus point is the years you knock off are totally payment free. By paying a little extra now, you could easily be mortgage free well before you ever expected. You never get info like this from your lender. This sort of stuff is kept quiet by the industry.

In the example where we paid an extra 100 every month and shortened the mortgage by six years. We could save a further 40 thousand by not having to pay your lender every month. This is 40 grand in your pocket and not your lenders. Overpaying is difficult, make no mistake, but the rewards can be amazing.

To recap we had a look at what benefit a fixed rate mortgage has for you. Every month you pay the same so you get to sleep easy at night knowing this. We also looked into the future and saw some big savings if you can make a little overpayment now.