We have read the article about the interest only timebomb and have a question regarding our situation.
Firstly we own a property in Germany which, depending on when we sell it, will go a long way to clearing our interest only mortgage. We rent that property out and the profit goes towards lump sum payments off the mortgage too. Usually twice yearly.
Secondly we overpay to the mortgage company by about £120 per month.
Now my question is this. We don't understand the maths of compound interest (?) and paying extra and so are wondering if we would be better saving the extra £120 per month and adding it to the rental profit and paying it yearly or should we continue as we are doing?
Firstly we own a property in Germany which, depending on when we sell it, will go a long way to clearing our interest only mortgage. We rent that property out and the profit goes towards lump sum payments off the mortgage too. Usually twice yearly.
Secondly we overpay to the mortgage company by about £120 per month.
Now my question is this. We don't understand the maths of compound interest (?) and paying extra and so are wondering if we would be better saving the extra £120 per month and adding it to the rental profit and paying it yearly or should we continue as we are doing?