A thrifty mother has shared her strategy to reduce her mortgage by £1,500 with a clever hack. Neesha Craig, 36, residing in Swansea, Wales, with her family, recently received £300 for selling her Samsung Galaxy S23 Ultra and decided to use the money for an additional payment towards her mortgage.
According to a recent survey conducted by musicMagpie involving 2,000 adults, approximately 38% of individuals in the UK have at least one old smartphone lying around, with an average value of £250.
Neesha, the founder of TheFunMoneyClub website, emphasized the significance of making mortgage overpayments, noting that even a modest extra payment can make a substantial difference. By trading in her previous Samsung device for £300 and directing that sum to her mortgage provider, she managed to reduce her mortgage term by two months, resulting in savings of £1,510 in interest.
Making an overpayment on your mortgage means adding an extra payment on top of your regular monthly installment. This practice helps in paying off the mortgage faster, reducing the overall interest accrued, potentially leading to significant savings and shortening the mortgage duration.
It is essential to check with your lender as not all mortgages permit overpayments without incurring fees. Typically, most fixed-rate mortgages allow up to 10% additional payment annually. Fees for overpayment, if applicable, usually range from 1% to 5% of the overpaid amount. In contrast, standard variable rate mortgages often allow unlimited overpayments, but it is advisable to confirm with the lender.
Before opting for an overpayment, it is crucial to consider clearing any priority debts and ensuring an emergency fund is in place.
In related news, musicMagpie has partnered with retailer Timpson to enable customers to trade in their old smartphones at Timpson stores nationwide, providing a faster and more convenient trade-in option for phone users. AO World, the parent company of Music Magpie, announced that this collaboration aims to enhance the trading experience for customers, offering quick assessments and instant fund transfers.
The service has completed a successful four-month trial in over 1,300 Timpson stores and will complement the existing range of services, including shoe repairs, key cutting, and dry cleaning offered by Timpson. Customers can hand in their old phones at the stores for assessment and receive funds within minutes.
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