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Old 04.10.2020, 15:08
KashKau KashKau is offline
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Re: Pre payment on your mortgae

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dear all,

From basics of property purchases,,, learnt , one needs to pay 20% upfront and then add additional 15% to reach to total of 35% of property value in 10 years.
Wondering do we need to make a common understanding if any prepayments can be made prior to 10 years ? (after the initial 20% payment)?

Ie, pay 20% but then say we want to speed up remaining 15% and say wish to close it 5 yrs... is that possible?
You can prepay however much you want but only when your current fix mortgage runs out. While it's running all cash flows are contractually fixed and you even will be *penalized* for repaying early

The general rule is your mortgage should be max 65% of bank's valuation at 15 years of ownership, and it gets correspondingly linearly interpolated at earlier years. If you borrowed >80% due to pledging extra assets, you will have higher amortization. If you borrowed <80%, you will have less. But all this only matters when you sign up for a new mortgage / refinance - they have to reassess risk and rerun calculations then. Bank's valuation can change. Renovations can change valuation too. Ask the bank when it's time to refinance, until that point there's little point in doing anything about your current mortgage
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