Mortgage free? It's still a dream but I'm getting there

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  • ArcticUK
    ArcticUK Posts: 15 Forumite
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    Just moved some ISA funds (lower rate than the new mortgage rate) and savings to the tune of £14000 straight into the mortgage (now that, as of a couple of days ago the crippling 5 year fix ended and with it its £500 maximum overpayment rule).

    Now, we can overpay at will. Let the fun commence! :beer:
  • ArcticUK
    ArcticUK Posts: 15 Forumite
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    Update time:

    Still aiming for a June 2016 final payment on mortgage that was taken out in 2005 for 25 years. That would mean saving on 14 years of interest payments!

    Just started doing a bit of jiggery pokery regarding finances and have been using a 0% interest credit card for a few months and overpaying the mortgage by more than we would be able to otherwise.

    The challenge is to start paying it off towards the end of the 0% period, when overpayments on the mortgage will have to be cut back or stopped.

    I'm presuming it is better to overpay by x amount when you have more of a balance, than to overpay later by the same amount when the balance and therefore interest owed is less. Anyone know if this is the case?

    For example, if the mortgage was for 12 months and I overpaid in month 2 only by £500, does that mean less interest paid overall than if I have overpaid by £500 in month 11?

    Anyway, we're still moving in the right direction and now owe £85,168 of our original £171k mortgage. :)

    Really enjoying this SVR of 2.5% rather than the 5.83% fix we had for five painful years!
  • edinburgher
    edinburgher Posts: 13,463 Forumite
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    I'm presuming it is better to overpay by x amount when you have more of a balance, than to overpay later by the same amount when the balance and therefore interest owed is less. Anyone know if this is the case?

    Technically speaking, I think the saving in itself is the same (i.e. you overpay £500 @ 2.5%, that's £500 you're not paying interest on). The additional saving comes from the time factor (interest payments are compounded, so the sooner the capital reduces, the longer you feel the benefit of the OP).
  • ArcticUK
    ArcticUK Posts: 15 Forumite
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    Update time: Not done one of these for a while!

    £42,167.42 now remains and the end is in sight.

    However, my original hoped-for mortgage free date of June 2016 looks a little too optimistic and is now looking like May 2017.

    Overpayments have continued every single month, not dropping below £500 (yet!) and so to continue to see the interest saved amount increase, is still a massive relief.
  • ArcticUK
    ArcticUK Posts: 15 Forumite
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    Update time: Not done one of these for a while!

    £31,142.56 now remains and the end is very much in sight.

    Overpayments haven't gone below £500 per month, even if I have had to dip into savings some months to pay.

    Hard to believe that if all goes to plan, this time next year, we will only have three more mortgage payments to make!
  • ArcticUK
    ArcticUK Posts: 15 Forumite
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    Another rare update...

    Now below the 20k mark and on course for final payment to be in May 17.

    It's fantastic to see that in June 2013 even after many overpayments (but always limited to £500 as per mortgage terms), the monthly interest was up around the £230 mark and now, just over three years later it's less than £40 and falling.

    Scaling back the overpayments this month from £1600 to £1000 as OH and me really need a holiday but living is part of life as well as overpaying!

    Less than a year to go until freedom! So excited!
  • ArcticUK
    ArcticUK Posts: 15 Forumite
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    And so...the mortgage amount owed keeps tumbling and now sits at £12,465. That means that I'm still on course for a May 2017 final payment. That'll be exactly 12 years (144 months) instead of 25 years and 300 months to pay it all off.

    I'm immensely proud of what we have achieved. My spreadsheets charting the MFW progress are a shining light in the darkness of the world (sometimes!). I might laminate them and create an art piece when all this is over!
  • NorthernMonkey1
    NorthernMonkey1 Posts: 350 Forumite
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    Wow, that's some going. It makes my 100k in 10 years seem simple in comparison. That's some amazing overpaying
  • confused_kid
    confused_kid Posts: 47 Forumite
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    Hi, thread resurrection - still on track I hope?! love reading these, posts, think I remember commenting on this back in 2013 so just about to embark on a similar journey myself (target 190k in 10 years) so I am back here for inspiration! :)
  • ArcticUK
    ArcticUK Posts: 15 Forumite
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    Hey confused_kid! Yes, I am delighted to say that things are still on track. Last mortgage payment (and overpayment of course!) is due on 7 May :)

    I will write a more substantial update soon but just wanted to quickly respond to say that if I have provided any inspiration to you (and others!) I am thrilled.

    There is no doubt that the overpaying has been a challenge but to know we are on the very final strait is so satisfying. There are a number of things that have worn out and not been replaced, broken and not been replaced, that are tired and need of some love because of the overpaying but come 8 May we can finally attend to those things! They include cars, carpets, sofas and even re-pointing a wall.

    However, having said that, we haven't been ridiculously strict and have still managed to live and have some great holidays too. So it has been far from doom and gloom!

    But, the shackles coming off is going to be amazing!

    Good luck on your own journey, thank you for remembering this little thread!
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