On a mortgage of £140,000 at an interest rate of 4% with 5 years remaining (assuming rates remain the same)
- 1. An additional £2,111.64 per month would be required to clear the mortgage balance within 5 years.
- 2. By extending the term of the mortgage by 5 years, an additional payment of £950.76 would be required to clear the mortgage balance.
- 3. If you had savings of £20,000.00 and you used these to reduce the mortgage balance, an additional £748.27 per month would be required to clear the mortgage balance.
We don’t recommend relying on selling the property as a way of clearing your mortgage balance. You need to consider where you will live if you sell your property and that the value of the property may have fallen. If the value of the property is less than the mortgage balance outstanding at the maturity date, you will still need to repay the difference. For example, if your property sells for £115,000 you will still have to repay £25,000 on maturity of the mortgage. An additional payment of £460.41 per month over 5 years would be required to repay the £25,000 shortfall.