A mother focused on saving money shared her strategy to reduce her mortgage by £1,500 through a simple approach.
Neesha Craig, 36, residing in Swansea, Wales, along with her spouse and child, recently obtained £300 by selling her Samsung Galaxy S23 Ultra, which she then used to make an additional payment on her mortgage.
According to a recent survey conducted by musicMagpie involving 2,000 adults, approximately 38% of UK residents possess at least one unused smartphone in their drawers, with an average value of £250.
Neesha, the founder of TheFunMoneyClub website, emphasized the significance of making mortgage overpayments, stating that even a modest overpayment can yield substantial benefits.
She explained, “I traded in my old Samsung Galaxy S23 Ultra for £300 and promptly allocated the amount to my mortgage provider. This action shortened my mortgage term by two months, resulting in a savings of £1,510 in interest.”
Overpaying on a mortgage involves making an extra payment on top of the regular monthly installment. This approach aids in accelerating mortgage repayment, reducing overall interest costs, potentially saving thousands of pounds, and shortening the mortgage duration.
It is advisable to verify with your lender before making overpayments, as certain mortgages may incur fees. Typically, on fixed-rate deals, most lenders allow up to a 10% annual overpayment. Fees for overpayments usually range from 1% to 5% of the excess amount.
For standard variable rate agreements, overpayments are typically unrestricted, but it is recommended to confirm with the lender. Before proceeding with an overpayment, it is essential to address priority debts and ensure the presence of an emergency fund.
In related news, musicMagpie recently announced a collaboration with Timpson, enabling customers to trade in their old smartphones at Timpson stores nationwide. AO World, the parent company of Music Magpie, highlighted the convenience and speed of this new service, offering a seamless phone trade-in experience.
The service, initially trialed for four months in over 1,300 Timpson outlets, will complement Timpson’s existing services, encompassing shoe repairs, key cutting, and dry cleaning. Customers can hand over their phones in-store for assessment, with funds transferred within minutes for a swift transaction.