Goat's diary

DisgruntledGoat · 4 January 2010 at 11:14AM

Hello folks. I made a New Year's resolution to start to deal with the mortgage seriously, and spent a few hours at the weekend getting all the figures together in a spreadsheet.

It's pretty depressing.

We're three-and-a-bit years into a 25-year repayment, 4.49% fixed until 2016 (seemed a good idea at the time - early repayment would be a killer), initial £229k, currently at £207,840. Interest stacks up at just under £30/day, almost £40k since the start! which is pretty frightening. We're limited to £499/pm overpayments, best case looks like we can bring it down to £196k by the end of 2010, taking overpayments into account. So it's going to be a long, long road.

The goal is to bring it below £100k by 2016 - a hefty goal that requires close to maximum overpayments and £20k savings on top of that, but should be something to aim at. After that we should be able to repay the rest by 2020, ten years early. So I guess i'm a "mortgage free in ten" wannabe. Wish me luck

cake21 · 4 January 2010 at 11:28AM

Welcome to MFW, good luck and keep us posted! :beer:

weezl74 · 4 January 2010 at 11:36AM

hiya goat

Although like you, we are constrained to the amount of Overpayments we can make, we are allowed to reduce our term without penalty or admin fee. We're with the halifax. It would be worth checking if your lender will allow this, since it will achieve the same aim

Good luck with your challenge

setmefree2 · 4 January 2010 at 4:46PM

and Good Luck with your MF journey

dimbo61 · 4 January 2010 at 7:19PM

Most lenders allow you to reduce the term
Use "whatsthecost" .com to play with the figures and see what you can afford by reducing your mortgage term one year at a time
I did this 4 years ago taking my term from 22 to 10 ( costs me a extra £500 a month )
4.49% fixed until 2016 is a very good deal and gives you long term security.
If someone had offered me a 10 year fix at that rate I would bite there hand off ! GOOD LUCK

uzubairu · 5 January 2010 at 1:54AM

DisgruntledGoat wrote: »

It's pretty depressing.

We're three-and-a-bit years into a 25-year repayment, 4.49% fixed until 2016 (seemed a good idea at the time - early repayment would be a killer)

Like dimbo61 says that's a good rate.
We opted for security and peace of mind.

We also fixed for 10 years at 4.79% in 2006 with limits on our overpayments (£500), but the lender isn't strict about enforcing ERCs if we go over the limits by a few hundred each month.

Our ERC decreases by 0.5% each year.
Is your's constant throughout the 10 year period?

DisgruntledGoat · 5 January 2010 at 1:33PM

Most lenders allow you to reduce the term

Mine will for a £50 fee, which is relatively small in the overall scheme of things. I'm going to have a think about this, we could manage £600-700 fairly comfortably (that's what we're going to be paying as ad hoc overpayments and saving towards a lump-sum payment at the end of the current term) and it would become easier over time.

We opted for security and peace of mind.

So did we, and it was the right choice really - although sitting next to people in the office who lucked out with tracker mortgages (dropping to zero in one case) is somewhat galling

Early repayment charges decrease over time, but from a very high initial level (11% I think) so switching the mortgage was never going to be possible and i'd guess much of the benefit of trackers has been had anyway, as far as I can tell the forecasts look to be towards an increase in rates

Thanks all

uzubairu · 5 January 2010 at 3:50PM

DisgruntledGoat wrote: »

Early repayment charges decrease over time, but from a very high initial level (11% I think)

:eek::eek::eek:

Our started at 5% and decreases.

Best of luck with your journey.

dimbo61 · 5 January 2010 at 5:50PM

Changing my term cost me £50 as well and I have now cleared half the mortgage in 4 years !!!

Norman_Bean · 5 January 2010 at 7:53PM

Good luck Goat !
We have been working on our spreadsheets since 1st Jan too - it is scary when you look at all those huge numbers but I'm sure all the effort will be worth it in the end.
I look forward to reading your diary
Norman x

abouttimetoo · 5 January 2010 at 8:07PM

Hello and welcome to the MFW'ers :hello:

Best of luck with your plans, you'll get lots of encouragement and tips on here

Look forward to reading your diary

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