mortgage repayments - help!

[kdawg]

hi. im totally confused as to how i'm paying so much on my mortgage so perhaps someone might know the answer.
i have a mortgage shared with my sister and I could be buying her half but need to know what im getting into. Our current mortgage of 245,000 is spread over 32 years/360 payments. That should make the approximate monthly re-payment 680 should it not? However i see from our joint account we are being debited 1200! My sister says that this is due to the variable rate but surely that doesn't account for the 500 odd difference? What might I be mis-calculating? many thanks.

[stuart100]

For starters, you're not taking the interest into account.

If you divide �245K by 360 then that makes �680, but you need to include interest on top.

As you've borrowed a large amount and it's spread over 32 years then this will make the interest fairly hefty.

There might be payment protection insurance as well added on each month, which you would have taken out at the start of the mortgage.

[Oneeyedvic]

AN interest rate of 5% on a �245,000 mortgage over 32 years will equate to monthly payments of �1280.15.

[bednobs]

also 32 years isnt 360 months

[dannydingbat]

Why such a long time? The difference between paying it off in 25 years and 35 years is much less than you think

[lady_p_gold]

Did you mean you were thinking of buying her half ??

[dzug]

You are forgetting that you are paying interest on it - the �680 is just what you need to pay to repay the capital.

[kdawg]

thanks guys. I haven't really done my figures at all now have I?! I'm going to chat to the bank about reducing the term of the mortgage. thanks for your help.

[dzug]

Funny.
When I posted mine was the only answer.
Now some 12+ hours later there are 5 more posted yesterday - ie before mine.
Ah well.