A mother focused on saving money shared her strategy to reduce her mortgage by £1,500. Neesha Craig, residing in Swansea, Wales, along with her spouse and child, recently earned £300 by selling her Samsung Galaxy S23 Ultra. She utilized this sum to make an overpayment on her mortgage.
A study conducted by musicMagpie on 2,000 individuals unveiled that 38% of Britons possess at least one old smartphone in their possession, with an average value of £250.
Neesha, the founder of TheFunMoneyClub website, emphasized the benefits of making mortgage overpayments, stating that even a modest overpayment can yield substantial savings. By trading in her previous Samsung device for £300, Neesha directed the funds to her mortgage, reducing her mortgage term by two months and saving £1,510 in interest.
Making an overpayment on your mortgage involves paying an extra amount on top of your regular monthly installment. This approach aids in quicker mortgage repayment, leading to reduced overall interest costs and potential savings of thousands of pounds, shortening the mortgage duration.
Not all mortgage agreements permit overpayments without additional charges, so it is advisable to confirm with your lender. While most fixed-rate deals allow up to a 10% yearly overpayment, fees ranging from 1% to 5% may apply for exceeding the limit. For standard variable rate plans, overpayment limits are typically more flexible, but it is recommended to consult with the lender for clarity.
Before deciding on an overpayment, it is crucial to assess priority debts that require immediate attention and ensure the presence of an emergency fund.
In related news, musicMagpie announced a partnership with Timpson enabling customers to trade in old smartphones at its stores nationwide. The collaboration, facilitated by AO World, which acquired Music Magpie in December 2024, offers a convenient and swift method for phone trade-ins. The service, tested over four months in over 1,300 Timpson outlets, complements the existing range of services, including shoe repairs, key cutting, and dry cleaning.
Customers can visit a Timpson store, hand over their phone for assessment, and receive funds within minutes for a seamless transaction experience.