We’ll have a look at what benefits there are to a fixed rate mortgage for you. We will also look into how a mortgage overpayment calculator might save you lots of cash. With the fixed rate mortgage comes security. With the mortgage overpayment calculator comes potential savings.

Fixed rate mortgages are one of a few different types of mortgage available. Usually for a period of several years, you get a fixed rate of interest. Your interest rate, and therefore your payments are fixed.

What, if any, are the up sides to fixed rate mortgages? Your payment is fixed because your particular interest rate is fixed. It’s a lot easier to plan financially knowing your payment will be the same.

Bank base rates may rise drastically, however yours will be the same because it’s fixed. There have been some alarming short term interest rate rises in our recent history. A rapid rise over a year or so could really see payments rise for those on standard variable mortgages.

There is a situation when maybe you should think twice about a fixed rate mortgage. If you think you may move home, or even have another child and need an extra bedroom, then think carefully before taking a fixed rate mortgage. These types of situations could invoke a nasty redemption penalty on your fixed rate mortgage.

Fixed rate mortgages usually come with charges called redemption penalties. These redemption penalties can hit you hard just when you don’t need it. These unexpected charges can hurt. Consider carefully whether a fixed rate is the one for you.

It’s worth thinking about paying a bit extra each month in addition to whatever you normally pay. You may have a fixed rate but it doesn’t mean your payments have to be fixed if you can afford extra. You lender will prefer you make the minimum payment and will never tell you it’s possible to pay extra.

What benefit does paying a bit extra each month have on you and your mortgage? You can shave several years off your mortgage term by paying slightly more each month. You can save a shedload of cash as well as knock a few years off.

What does a mortgage overpayment calculator do? You can enter all the relevant figures from your particular deal. You can put various amounts in as the overpayment. Feel free to play around with this figure.

The calculator will show you how many years you can expect to shorten your mortgage by. You get to see how much money you could possibly save. Playing around with the actual overpayment figure can reveal that the more you can pay, the faster you finish your mortgage.

There are astonishing amounts of savings to be had. If you had a 25 year mortgage and borrowed 100 grand at 5% interest. Making an overpayment of 50 every month will save you 12,000 and knock over 3 years off.

Now an example of 100 extra instead of 50 extra. Using the same figures in the mortgage but substituting 100 extra for the previous 50 extra. This saves you more than 20,000 and knocks a respectable 6 years off the term.

One more advantage is that the years you save are payment free, nothing at all to pay. You could be free of the shackles of your mortgage early by paying a little more now. You will never hear this from your lender though; it’s simply not in their interests to tell you to pay off early.

In our example where we saved six years off the length with a hundred a month overpayment. A six year saving translates into about a forty grand saving in cash. This saving is yours as you will never need to give it to your lender as you originally planned.

In this article we’ve looked at the potential of fixed rate mortgages. You get to sleep easy in the knowledge your payment will stay the same month after month. We also had a look at a mortgage overpayment calculator and the potential savings that can be had.