How to Track Mortgage Overpayments
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The biggest motivation when paydown your mortgage is to track mortgage overpayments. Knowing how much time you are gaining back and how much interest you are saving. You can do this by looking at the Mortgage Amortisation Schedule.
- What is an amortisation schedule
- How to read an amortisation schedule
- How to Track overpayments on the amortisation schedule
- Can I get my own amortisation schedule and track my mortgage overpayments
1. What is an amortisation schedule?
An amortisation schedule is your mortgage summary, showing you every monthly payment over the full term of the mortgage. Breaking the monthly payment down and showing what is being paid towards interest and what is going towards the principle loan.
2. How to read an amortisation schedule?
All schedules can vary a little but this is the one I use. If you follow my page on Instagram you will be familiar with this. Here in the first coloumn is the date. It starts with the 1st payment we made. It also shows us what the payment consisted of. The 2nd column is the interest and the 3rd is the principal. The final column is the balance outstanding on your mortgage.
To read the first line on this schedule, I can see that the 1st payment made on this mortgage was on February 2017. It also shows the monthly mortgage payment was 1,092.10, with 605.00 gone to interest and 487.10 paid to the principle of the loan. So, in english. 605.00 went to the bank, this is the interest they recieve for faciliating the loan and the 487.10 is the actual amount you have paid towards your mortgage.
Last then is 220,000 – 487.10 = 219,512.90 and this is the balance that you see in the final column. This is what is outstanding on the mortgage.
3. How to Track mortgage overpayments on the amortisation schedule?
So now that you understand the numbers on the table, we can use it as a motivational tool when making overpayments on your mortgage. 1st your can visualise the balance coming down. I use a highlighter to cross off each line as my balance reduces. This is my favourite thing to do each month. So in this picture you can see, this is the current balance. We have been making regular overpayments on the mortgage, so we are ahead. But, how much time have we saved by making these over payments.
Look across from the balance to the 1st column, where the date is. The date is January 2024, the date when this photo was taken was February 2022. This shows a difference of 1 year 11 months. At this point in time we were 23 months ahead on our mortgage. Now each payment we make puts us nearer and nearer our goal of paying down our mortgage early(by 50 years old) and reducing the interest we are also paying. Now explaining that brings up a whole new topic…….. for another day 🙂
4. Can I get my own Amortisation Schedule and track my mortgage overpayments?
Yes, of course. There are 2 ways. The 1st is from your mortgage provider. Some are great and will send it out to you others not so great. Also another thing to bare in mind is if you have already made overpayments they will have made adjustments to the schedule to include these. So you will get your schedule as of today.
2nd is, you can make one of your own. In this video I show you how I made my one which is pictured above.
Lots of you enjoy watching my updates on instagram and I now look forward to you sharing your updates with me.