A thrifty mother has shared her strategy to reduce her mortgage by £1,500.
Living in Swansea, Wales, Neesha Craig, 36, together with her family, managed to secure £300 from selling her Samsung Galaxy S23 Ultra. She promptly used this sum to make an additional payment towards her mortgage.
Recent research conducted by musicMagpie involving 2,000 individuals unveiled that approximately 38% of the British population harbors at least one old smartphone stashed away, with an average value of £250.
Neesha, the founder of TheFunMoneyClub website, emphasized the importance of making mortgage overpayments, highlighting that even a modest extra payment can yield significant benefits.
By trading in her outdated Samsung device for £300 and channeling that sum directly to her mortgage provider, Neesha was able to slash two months off her mortgage term, resulting in savings of £1,510 on interest.
Making a mortgage overpayment involves contributing more than your usual monthly installment, aiding in faster mortgage repayment and reduced overall interest costs, potentially saving you thousands and shortening the loan duration.
However, it is crucial to verify with your lender beforehand as not all mortgages permit overpayments without imposing charges. Typically, fixed-rate deals allow up to a 10% annual extra payment, with fees ranging from 1% to 5% for overpaid amounts. Conversely, standard variable rate mortgages often offer more flexibility for overpayments.
Before committing to an overpayment, it is advisable to assess your financial situation, ensuring that priority debts are settled first and an emergency fund is in place.
In a related development, musicMagpie has partnered with Timpson, enabling customers to trade in their old smartphones at Timpson stores nationwide. Acquired by AO World in December 2024, musicMagpie views this collaboration as a more expedient method for individuals to exchange their phones.
The successful four-month trial, operational in over 1,300 Timpson stores, has expanded the service range, complementing existing offerings like shoe repairs, key cutting, and dry cleaning. Customers can bring in their old phones for evaluation in-store, with funds transferred within minutes.