Mortgage-Free Wannabe Welcome and Explanation

bathgatebuyer · 11 March 2013 at 8:36PM

Hi all. Thought I'd take a wee look throughthe Mortgage Free section as I rally want to focus my mind on getting rid of my mortgage. I'm in a very blessed position in that I have a job I enjoy that pays well, and while I have the chance, I want to focus on getting my mortgage down.

At the moment, I have a Natwest mortgage on 3.09% with 15 years remaining and £89,500 outstanding.

I'm in the process of moving to Virgin Money and a fee-free mortgage of 2.89%. This saves me about £70 a month, and my plan is to put this saving aside and ultimately put it towards the mortgage at the end of each year (I don't want to do it as I go along as I do want the comfort of having that money aside somewhere - I learnt the hard way that rainy days DO come along!)

As I said, I'm very lucky that through my work, one of the benefits I get are company shares, and at the moment I have over £6K worth at their current value. I can't sell them right now without being liable for tax and NI, but when I have about £1K worth of shares without deductions, I want to sell them and put that into the mortgage.

Property Value - £180K
Mortgage - £89.5k
Years left - 15

Hopefully you guys will inspire me to focus and I can learn from you as we go along :-)

Craig3001 · 12 March 2013 at 11:39PM

Hi All,

First time poster and need some advice on our mortgages.

We have two properties at the moment one with £58k and the other a £132k balance. We are in the position where we have £90k we can use to clear a large chunk off, and reduce our mortgages. However, we are not sure whether to pay off the £58k one in full and £32k of the other or all £90k against the £132k, the house we live in. Both houses have 15 & 17 years respectively and we are both mid 30's.

Both mortgages are at variable rates and are out of term running at 2% above base rate.

Appreciate if anyone can point us in the right direction or advise.

Many thanks.

megela · 13 March 2013 at 6:55PM

If you rent out the second house the interest on the mortgage would be tax deductible? So IMO best to leave that mortgage running and pay off the house you live in. Also I would like the security in nearly owning the roof over your head!

Craig3001 · 13 March 2013 at 11:07PM

megela wrote: »

If you rent out the second house the interest on the mortgage would be tax deductible? So IMO best to leave that mortgage running and pay off the house you live in. Also I would like the security in nearly owning the roof over your head!

I thought that myself but thought to check on here, just wondered whether it would save money to pay one of them off.

Oh well....when my deal expires in June I'll be paying off £93000 of that leaving me with £40k.

Barbeduk · 15 March 2013 at 5:10PM

MrsX wrote: »

Hi folks, can some one tell me where to start please?

I have two mortgage accounts, on is £30,000 interest only the other is £35,000 on repayment.

In a couple of moths I shall be in a position to start overpaying by about £200 per month.

Which account should I be overpaying? I have an endowment for the interest only account, but this is forcast to underpay, does this make any difference to the answer.

Should I pay monthly, or save the cash and pay it in a lump sum once a year? The interest on my mortgage is 2.5%.

Also, where can I find a calculator to show me what a difference my overpayment will make - would be nice to see it come down.

Any advice will be much appreciated, I'd love to see my mortgage disapear quicker!

Hi, firstly I don't think it matters which one you overpay as they are both on the same interest rate. Just check your mortgage terms with the lender to see if you can make small regular ops, or if you're limited to one offs. Some set a maximum annual overpayment too. If your interest is calculated on a daily basis, you'll be best off making monthly ops.

There's a mortgage calculator on the main site, but I think there are links in some of the diaries too for more in depth spread sheets.

Good luck

pawprint78 · 23 March 2013 at 12:30PM

Hi All!

I have just become DEBT FREE thanks to the advice and guidance and spreadsheets on these forums. (Debt free 18 months earlier than anticipated)

I'm more of a lurker than a poster, having only posted on one forum message before.

My next goal is to over pay my mortgage. I plan on only paying £100 per month at the moment, because i'm on a quest to pay my council tax early - And put money into a savings account to address next years "big" bills (Road tax, Council tax, all insurances etc) in one go, therefore reducing my monthly outgoings, which I will use to pay larger over payments to my mortgage, and still allow for building up savings.

Using the MFW spreadsheet, I edited this for my car loan, and secured loan, its fantastic to see that by paying a little extra each month, how much quicker these "debts" would be gone. So a great big thank you to the poster who made these sheets, a great big hello and good luck to all aiming to pay off their mortgages early, and one quick question from me...

Does overpaying your mortgage / any other credit help boost your credit score? It's not a big deal as I fully understand my past terrible financal management will clear 6 years from the end date, but I wondered as it shows on your credit file that payments are set as £X per month, Any underpayment "goes against" you so to speak, so would overpaying help?

I have Emailed Experian customer services as there is no answer in the FAQ's but wondered if any financial whizz on here knows the answer / has noticed a difference to their own score?

Rottensocks · 9 April 2013 at 6:55PM

Inspired!

I am motivating myself to do two things: all the money I don't spend on smoking is going to mortgage overpayment...... If I stick to it, I should repay my mortgage 5 years and 3 months earlier!

One month done!

JCL · 20 May 2013 at 8:40PM

Rottensocks wrote: »

Inspired!

I am motivating myself to do two things: all the money I don't spend on smoking is going to mortgage overpayment...... If I stick to it, I should repay my mortgage 5 years and 3 months earlier!

One month done!

Well done on giving up the fags and using the money wisely! Healthy lungs and healthy finances coming your way.

scottishlass · 1 June 2013 at 6:49PM

Well after much reading - I'm taking the plunge and declaring that I want to be a MFW but need to decide if it is the best decision. The story so far:

Mortgage Nov 2011 : £69,300
Mortgage May 2013 : £48,000 ish

So little bit OP over the last year and a bit - its currently at 3.4% and fixed until Dec 2013 with unlimited OP allowed. The dilema is I no longer live in that flat and so am looking at renting it out...I know the interest is tax deductable and I'm planning on switching to a By To Let - but do I still want to aim to be MF?

it05jb · 5 June 2013 at 7:13AM

Hello,

I looked at your post above mine and so i thought id give you my opinion on this, but im sure you have a lot more experience than me!

I suppose its completely your choice. If the choice is between leaving it empty and renting it out then i would rent it out, your in effect allowing someone else to pay your mortgage for you. This way you can continue to put in as much as you are as well as the income from the rent. Youd become MF in no time!

Jack

Mortgage-Free Wannabe Welcome and Explanation

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free