variable mortgage extra payments worth it?

strawberry1

hi all,
hoping im on the right forum...if anyone is good a sums/ mortgages....

i have a large variable mortgage,
I contacted mortgage people yesterday to check there wont be penalties to send in a postal order/ cheque to pay off more in addition to the regular monthly payment, was told there's not,
the man said the amount (say i sent in 1000 euro) would come off the amount left on house or shorten the time ... (i'd like to do both)
if i send in 1000 euro will it be subject only to the 5% (approx) interest rate im on or I'm afraid they'll will take the the amount for interest and nothing comes off my mortgage? (ive been paying for 5 years but end of year statements seem to show money is paying more interest and not much off mortgage itself yet ). am i best just keeping money for a rainy day!
any advice appreciated!

andrew

moved to the banking etc. forum, since this seems more appropriate to there.

homer911

If your interest rate is around 5% and you can afford to pay off a bit more, while still keeping cash for a rainy day, then its definitely a good idea to do so. Any payment made will come straight off the principal outstanding. saving you considerable interest in the long term and reducing the life of your mortgage. I was able to pay mine off in 12 years, but it was a pre-celtic tiger mortgage!

strawberry1

thank you all!:)