Managing Debt - Cost of credit
Cost of credit
The following example, estimates the impact an arrangement may have on the total cost of credit on your mortgage.
This illustration is based on a mortgage of £275,000 over a 30 year term. The overall cost for comparison is 4.00% APR. The total cost of credit** for this mortgage is £197,641.14. This example shows a mortgage that was drawn down two years prior to an arrangement being put in place.
| Arrangement | Term | Monthly payment prior to the deal | *Monthly repayment during the period of the deal | Monthly payment when the deal ends | As a result of this temporary arrangement, the total cost of the credit may increase by |
|---|---|---|---|---|---|
| Interest only | 12 months | £1,312.89 | £883.72 | £1,341.70 | £3,696.61 |
| Payment reduced by £340 | 6 months | £1,312.89 | £972.89 | £1,323.18 | £1,344.65 |
| Moratorium | 6 months | £1,312.89 | £0.00 | £1,352.62 | £5,192.25 |
| Term extension | 5 years | £1,312.89 | £1,206.81 | £1,206.81 | £36,872.90 |
* Flexible payment options may appear cheaper in the short term but could be more expensive over the life of the mortgage and are subject to approval.
** The total cost of credit is the total amount repayable less the amount of the original mortgage value. For illustration purposes it is calculated using a variable interest rate and is therefore subject to change. Rates and repayments are correct as of the 16th March 2011.
If debt is becoming a problem call us today on 0845 3016910 in relation to mortgage debt or 0845 602 3112 for non mortgage debt. Alternatively, you can arrange an appointment at your local branch.
