Timeline for How do I calculate the equity I have in my home when overpaying on mortgage?
Current License: CC BY-SA 4.0
13 events
| when toggle format | what | by | license | comment | |
|---|---|---|---|---|---|
| Jan 29, 2021 at 21:40 | vote | accept | Jsk | ||
| Jan 29, 2021 at 10:09 | comment | added | anotherdave | A lot of banks have overpayment calculators online — e.g. here's one from Halifax. (Whether or not your mortgage is actually with Halifax is N/A as the calculations would be the same) You can see how a regular monthly overpayment or a one-off overpay would affect your mortgage. Note though, that it assumes a) the same interest rate for the life of the mortgage and b) that you make the overpayment for the life of the mortgage (both probably unlikely, but you can see the difference after X years also) | |
| Jan 28, 2021 at 19:30 | answer | added | Ganesh Sittampalam♦ | timeline score: 5 | |
| Jan 28, 2021 at 19:11 | answer | added | Hilmar | timeline score: 0 | |
| Jan 28, 2021 at 16:32 | comment | added | TTT | @Jsk - that's annoying. I assume though that it does include the new amount owed? If yes, you could subtract that from the amount owed on the previous statement to calculate the exact amount that did go to principal. Assign it to the date of the payment and then you don't need to remember to login on the correct date each month. Interest amount is what's left. | |
| Jan 28, 2021 at 16:30 | comment | added | Jsk | @TTT That's the problem - my mortgage statement does not tell me the exact amount of P and I for every payment. | |
| Jan 28, 2021 at 16:30 | comment | added | TTT | Side thought: is your ultimate goal here to do "what if" scenarios to help you decide how much to overpay? | |
| Jan 28, 2021 at 16:26 | comment | added | TTT | This seems weird: "I am checking my mortgage on my online banking the last day of each month and subtracting the amount of interest from the amount of paid to give me the equity I currently have." Why not just track the amount owed, and reduce that by the principal portion of your payments? It might be the same result as the way you're doing it, but it's more direct, and doesn't require additional subtractions if there is escrow or any other fees. And, doesn't every mortgage statement tell you the exact amount of P and I for every payment? | |
| Jan 28, 2021 at 16:22 | comment | added | Ganesh Sittampalam♦ | As one of the answers points out, equity also depends on the value of your house which is both unknowable and quite volatile. Are you really interested in how the principal reduces? | |
| Jan 28, 2021 at 16:11 | comment | added | RonJohn | If you just want to see how the overpayments affect your balance over time, there are many spreadsheet templates on the web which you download and run in Excel. Enter the starting balance, monthly payment, years, etc, and also excess payment. | |
| Jan 28, 2021 at 15:48 | answer | added | Joe | timeline score: 3 | |
| Jan 28, 2021 at 15:47 | comment | added | AakashM | Your lender's T&Cs, or maybe your specific mortgage paperwork, should specify the interest calculation (daily interest is common these days). Given that, and some actuals, it should readily be possible to make your own spready that comes up with the exact numbers your lender does. With such a spready, you can easily see the effect of overpayments that go direct to principal. | |
| Jan 28, 2021 at 15:31 | history | asked | Jsk | CC BY-SA 4.0 |