Mortgage-Free Wannabe Welcome and Explanation

[Sepa74]

That interest rate is great, in fact so great you would be better off saving the money! Do you max out your ISA's each year? They can provide a very handy tax free income when you retire, and your money will definitely earn more in an ISA than paying off your mortgage.

It might be frustrating to not see the mortgage balance come down, but it would be better for your finances in the long term.

[JulieGeorgiana]

Just want to become a Mortgage Free Wannabe... My DH and I just bought our first house a few days ago and our mortgage is about to start...

We can overpay £540 2 weeks before our first overpayment (and thanks to a friend I have a spreadsheet which tracks everything and that one off payment will save me £1238 in interest)!

I am very excited and although my mortgage is due to finish in 32.5 years (apparently we can't afford a 25 year mortgage! HAH!) this one payment potentially shaves off 3 months

Not happy that each September they re-calculate my mortgage and give me lower monthly payments so I officially cannot shorten the mortgage... but in a few years maybe we'll remortgage to a 25 year, then a 20 year, then 15...

[Crossie1]

Hi all,
I decided to join after reading the complete forum and was inspired by peoples progress. After Feb 2013 I should have an extra £275 as my car loan will expire. I will then be able to make over payments of £300 pcm. Possibly £400

• Starting Balance Dec 2010 £108678

• Current Balance Nov 2012 £103986

According to the calculator if I were to pay an extra £400 per month I could complete my mortgage in 10 years and 3 months. Can't wait till Mar 2013 to get started.

[Collette50]

Would like some advice please. Do I pay off credit card/loan debts or instead pay a lump sum off my mortgage to get out of negative equity. I have been given a lump sum so am thinking carefully of which way to go.
Would love to hear your opinions please.

[RevolvingDoor]

^ I don't know Collette, I think it's mainly better to pay off the debt with the higher interest rate, hopefully someone else will advise you.

I am joining the MFW challenge. We had a mortgage around £120,000 in 2003 and it's now around £85,000. We have been overpaying by £500 a month for about a year but I am trying to look at where we are spending too much and trying to add to the overpayments.

We are thinking of getting an instant access ISA to put the extra cash rather than overpaying straight into the mortgage account as we have a very low interest rate.

We are not really sure which is the better option.

I realised I was paying around £550 a month on groceries so that needs to be slashed immediately!!!

[millkins]

Hi Collette50, I would be inclined to pay off the credit cards and loans with the lump sum as these are likely to be a higher rate of interest than your mortgage. If that pays them off in full then you can use the money you would otherwise pay into these to pay more off the mortgage.

Although it'd be great to be mortgage free (I won't be for a long while yet), there's little point if you're stuck with debts on higher interest rates instead.

[NPowerUser]

Having been mortgage free at 43, I liked the sound of being mortgage free again at 50

Having borrowed again to move house and not just due to it rhyming nicely with my age.

I must admit I sometimes wish I had perhaps socialised a bit more or taken a few holidays or bought newer clothes or furniture but I prefer the thought of doing all that in my fifties without the burden of a mortgage. Perhaps time will tell when I reflect on whether perhaps, I should of splashed a bit more cash on having fun, who knows?

Aiming to get rid of it sometime in 2013 I have joined the MFW 2013 thread. All that overpay on this thread inspire me to do my best.

I am not a big fan of Santander bumping up their SVR to 4.74% - another reason for wanting rid although I appreciate its nothing compared to the eye watering rates of yesteryear.

Good luck one and all.

[Thrifty Pixie]

i am new to mortgages, having taken out my first with my husband last year, but we are keen to try to pay it off as fast as we can. luckily we had a decent deposit (52%), are otherwise debt-free, child-free and on decent incomes. i'd really like to formalise a plan here but i need to collate all our paperwork and figures so this is just an introduction until then.

i can state that we took out an offset mortgage, as we'd come into some money and didn't want to use all of it as a deposit, but rather keep some of it in savings for all eventualities. however we wanted to get the benefit of offsetting it against our mortgage considering that savings accounts are so pants at the moment. the offset benefit beats all instant access savings, including ISAs, until they reach around 4/5% again (if ever?)

at the moment we have a substantial amount in the offset saver for emergencies, but have been using it to lower monthly payments on the mortgage instead of overpaying as we've had a lot of things we wanted to do to our new cottage. then, last week, my husband's car died, so we've had to plunder the offset somewhat for a new car. we have some 'floating' savings in another account for some current building work and bills, but then we plan to hop determinedly back onto the wagon and start overpaying in earnest - hopefully around £500 per month.

so anyway, it's nice to meet you all, and i look forward to joining you all on your MFW journeys


*meep*
TP

[Thrifty Pixie]

ok so i found out some more details today, including my interest rate - 3.49% [although i can't remember if that's fixed or what...need to check that later].

i also called them to change back to term reduction payments rather than payment reduction and they're sending me a form to fill out. this should be in place for our next payment.

so this means we can just concentrate on scooping as much excess cash into the offset and transferring lump sums into the mortgage side if/when it starts building up too much. not for any other reason other than that it keeps it tidier.

i am so chuffed to be able to join this thread. having been around £12k in debt in 2009, working hard to pay it off and longing to even have a mortgage, let alone be in a position to pay it off early...well, this is a real achievement for me.

i can't wait to see that term start coming down!

TP

[MrsX]

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!

[blushred2]

Hi guys

Newbie to mortgages here

mortgage is 41,000 with 18 yrs left
£305 per month

i have checked and can make overpayments.

am i right in thinking u can make overpayments every day of pence?
just working my way through the threads on mortgage free, and noticed that someone transferred the odd pence into her mortgage every day from her current/ savings account.

many thanks, sorry for being an idiot

[Tilly MFW in 6 YRS]

Hi Blushred, I move any pennies from my current accounts straight to my mortgage daily. I would suggest you contact your mortgage provider though to check.

Mine is all on line plus offset, so whilst I build up a cash reserve, I also do a variety of OPs each month.

Good luck

Tilly

[bathgatebuyer]

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]

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]

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]

Originally Posted by megela

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]

Originally Posted by MrsX

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]

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]

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]

Originally Posted by Rottensocks

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.