Mortgage Holiday on 153k

[Dyceast]

Hi There.

I know this is most likely a simple answer for many but I just cant get my head around this all.

Can someone please help me add up how much extra I will pay on 153k if I take the 6 month mortgage holiday?

I have not rung the bank yet as I dont want to be put on the spot and I feel like they will persuade me into taking it during that phone call.

[Learning]

What's your interest rate? There's several compounding interest calculators on the net.

[Dyceast]

What's your interest rate? There's several compounding interest calculators on the net.

Hi First time I have heard of Compound Calculator?

I am sitting on 3.55%

Its fixed for 1 1/2 - 2 more years, would that affect anything?

[Anthonyacat]

I don't have a compound calculator on me as I'm on my phone, but you can do some simple math. You're effectively borrowing 6 months worth of interest - about $2.7k at your current interest rate.

If interest rates remain the same or similar, that extra $2.7k of borrowing is going to cost you $96 per year for the life of the loan. If you've got 30 years left on your loan, that's approx $3k. If rates rise it'll be more, if they drop it'll be less.

Of course, then you'll need to consider inflation and the time value of money. $96 won't mean as much in 30 years as it does now.

[Dyceast]

I don't have a compound calculator on me as I'm on my phone, but you can do some simple math. You're effectively borrowing 6 months worth of interest - about $2.7k at your current interest rate.

If interest rates remain the same or similar, that extra $2.7k of borrowing is going to cost you $96 per year for the life of the loan. If you've got 30 years left on your loan, that's approx $3k. If rates rise it'll be more, if they drop it'll be less.

Of course, then you'll need to consider inflation and the time value of money. $96 won't mean as much in 30 years as it does now.

Thank You for explaining. Great example to give me a fair idea.