Well take a look at fixed rate mortgages and how they can be good for you. Then prepare to be amazed at the savings made with a mortgage overpayment calculator. You get security from the fixed rate mortgage & you may get a nice surprise from the overpayment calculator.

A fixed rate mortgage is a special type of mortgage where you have a fixed interest period. A fixed period of interest that may be a couple or several years. Because the interest rate is fixed, so are your monthly payments.

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.

It doesn’t matter how much interest rates rise, your payments are fixed. In the not too distant past there have been some real scary rate rises. Being on a variable rate leaves you susceptible to the rapid rise of your monthly payment.

There can be certain circumstances when a fixed rate mortgage may not be right for you. You may decide you need to move house, or even have an unexpected child and simply need more room. Any sort of situation like this can cause unexpected charges by way of redemption penalties.

Most fixed rate mortgages come tied to a nasty redemption penalty. At a time when you least need it, you could get hit with a redemption penalty. Think hard before you take a fixed rate mortgage as these charges can really disrupt your plans.

You might like to think about paying a small extra overpayment each month as you go through the length of your mortgage. You are not tied to make the same payments for the duration of the mortgage, usually 25 years. You lender will not tell you it’s possible to pay extra as they prefer you just pay the minimum.

What are the up sides to paying extra each and every month? Topping up your monthly minimum payment means you can knock a few years of the length of your mortgage. You also save a lot of money in the process, sometimes a staggering amount.

What do you do with a mortgage overpayment calculator? You input various figures relating to your mortgage. You can then play around by changing the figure you can afford to overpay.

You get a resulting figure out of the calculator in years you can shave off. It also tells you what sort of financial saving you can expect to make. Putting bigger figures in the overpayment box will show bigger savings and even more time saved.

You might be pleasantly surprised at the savings to be made. Quick example, 25 year mortgage borrowing 100,000 at 5%. By paying an extra fifty each month could save you over 3 years and 12 thousand.

If you can afford to pay 100 extra instead of 50 what would happen? The same mortgage example but paying 100 extra every month. You get to shave over 6 years off the length and over 20 grand saved. That’s pretty good.

Another plus point is the years you knock off are totally payment free. It’s definitely a reality for you to be free of your mortgage years before planned. Of course your lender will never tell you this, you have to discover this on your own.

If we look at the example where we paid 100 extra and knocked over 6 years off the length. We could save a further 40 thousand by not having to pay your lender every month. You don’t pay this money to your lender so you get to keep it, either save it or spend it.

There you have a few benefits of going for a fixed rate mortgage. Not only do you get set monthly payments, you get to sleep easy at night because of it. Also consider the huge potential in making a little overpayment every month. Even small amounts will add up.