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  • FIRST POST
    • Ms-Bristol
    • By Ms-Bristol 8th Mar 16, 7:26 PM
    • 20Posts
    • 69Thanks
    Ms-Bristol
    Project 2018
    • #1
    • 8th Mar 16, 7:26 PM
    Project 2018 8th Mar 16 at 7:26 PM
    I've been lurking a while so I thought I'd post my thoughts!

    We bought our house in 2007, with a mortgage of £235,000. The mortgage was ported from the previous property with part 4.5% and part 6.2% fixed (as this was pre credit crunch!) Repayments were a whopping £1500+ per month (ouch!)

    Nine years later the balance is £91,000 and I've repaid the ported amount and switched the fix to 2.99%. The repayments are now just over £600 per month.

    The fix only allows 10% repayment per year so I do that every year and put the rest in an ISA. The aim is to have enough in savings to pay the remaining balance when the fixed rate and associated restriction comes to an end in July 2018. This requires an 'overpayment' that actually goes into a savings account of £1500 per month. Currently saving £1600 per month so I am on target to do this. Every month I use the mortgage overpayment calculator on MSE to check I am on track.

    If it goes well the savings will meet the mortgage balance before the end date dictated by the fix. Due to the interest I earn on the savings and the penalty on the mortgage, ditching the fix is not worth it.

    I'd be interested if anyone else is taking a similar approach?
Page 2
    • Ms-Bristol
    • By Ms-Bristol 6th May 16, 12:54 AM
    • 20 Posts
    • 69 Thanks
    Ms-Bristol
    I had a statement the other day and the balance is now c. £90,300.

    I have £6200 in the pot for July by which time the balance will be around £89,600 so I need to put away about £1400 a month for the next two months in order to be able to pay off 10% in July.

    I have other funds earmarked for the mortgage but they are locked away and will be used in 2018 when the fixed rate ends to help clear the remaining balance.
    • EatingTheElephant
    • By EatingTheElephant 7th May 16, 12:20 PM
    • 1,152 Posts
    • 6,176 Thanks
    EatingTheElephant
    Impressive work so far with a solid plan in place
    • LadyGnome
    • By LadyGnome 7th May 16, 5:24 PM
    • 420 Posts
    • 1,550 Thanks
    LadyGnome
    I admire your determination and organisation. Roll on 2018!
    Mortgage
    Start Nov 2012 £310,000
    June 2017 £248,590.81 Reduction £61,409.19
    MFW 2017 #42 £2386.30/£3100
    End Oct Sept 2034 but I have a cunning plan...
    • Ms-Bristol
    • By Ms-Bristol 2nd Jul 16, 12:21 AM
    • 20 Posts
    • 69 Thanks
    Ms-Bristol
    On 1st July I checked the balance and it was just over £89K, so I'll be able to pay just over £8900 now. I have this amount so on Monday, I'll be calling them and asking for the exact figure so I can make that payment.
    • Ms-Bristol
    • By Ms-Bristol 11th Sep 16, 11:17 AM
    • 20 Posts
    • 69 Thanks
    Ms-Bristol
    July's 10% overpayment was received by the bank and for the first time, they did not levy overpayment penalties. The balance was reduced to just over 80K and the monthly payment was reduced. Now saving for next July but as the amount diminishes, more funds will need to be put aside into savings.

    Currently looking at switching energy supplier and internet provider as these have crept up.
    • Kittenkirst
    • By Kittenkirst 11th Sep 16, 12:12 PM
    • 1,608 Posts
    • 8,375 Thanks
    Kittenkirst
    Fab stuff Ms Bristol! Well done on such a massive Overpayment
    2017 MFW #20 - OP £2151.52: £2150 100%
    Last 3 months- Sep £206.32 Oct: £179.60 Nov: £12.58

    Emergency fund £3945/ £6k
    Mortgage Oct '16 £170.995 LTV 90% end: Nov 2041
    2016 OPs £255.50/£150
    • A Frayed Knot
    • By A Frayed Knot 13th Sep 16, 6:51 PM
    • 2,128 Posts
    • 9,575 Thanks
    A Frayed Knot
    Hello, Your doing just great reducing your mortgage balance in such a short time. Well done

    However, I am slightly confused, you mention you overpay each month, then make your 10% allowance o/p in July, but surely your o/p each month actually count towards your 10%, so when you o/p your lump sum in July it takes you over your allowance?

    Re- the o/p's reducing your payments and not your term, if the above was the case, then would it not be better to reduce your term - thus upping your normal monthly payments which in effect would be o/ping without penalty, then still have your 10% allowance?

    Hi Ms B - Man v Mortgage here,
    I've just started and also have a 10% rule - are you absolutely certain when your 10% year-ends are? I thought mine would be the anniversary of the product but it's actually Dec 31st - although you got me questioning that now! I'm with the H@lif@x.
    I will be offsetting in future, but yes, until I hit the 10% rate I will be plugging it into the mortgage pure and simple. Bon chance! MvM
    Originally posted by rasputin_thorpedo
    It is Dec 31st, for H@lifax, so the next 10% allowance starts 1st Jan each year. However if your fixed rate ends, say in Sept (like mine did, last year) you can obviously pay as much as you like (as out of deal) then take on new fixed deal, you would have a 10% allowance from Oct to 31st Dec (like I did) then another 10% from 1st Jan.

    But to compensate for all o/p's previously made and with a raise in income, I added extra income figure (which was raise, interest saved in new deal and no internet to pay for 1 year) to my normal payments and reduced my years (took 6 and a half years off) so still had a 10% allowance allowed every year.

    I was having a chat with my dad yesterday and he was asking about my 10% cap as well. For me it runs from January to December rather than the anniversary of the loan, which I find simpler.
    *He asked if I could pay 10% in October and then 10% again in January which got me thinking.
    I'm also limited by only being able to make a minimum repayment of £500 at a time and my aim is to save up £500 and then make a payment. So, what I might do is find out how much I've got of my 10% left in the middle of **December and then make a lump sum from some of my savings. It might not be up to the full amount but maybe knock another 2/3K off it.
    Originally posted by mrsp1987
    *See my above answer to your dad's question, bearing in mind I'm with the H@lifax.
    **That's exactly what I done in Dec 31st last year as, as they say "once it's gone - it's gone" meaning the 10% allowance for that year - you can never get last year's allowance back - it's gone. Have to tell you - I was so happy I done that - right decision for me and saves you interest in the meantime

    I have been told by my mortgage company that I can actually reduce my term even more, without penalty even though I'm only 11 months into my 2 year fixed deal. Thought this may be my solution to o/p more as I have reached my 10% only 8 months into this year.
    Always have 00.00 at the end of your mortgage balance and one day it will all be 0's
    MFMarch 30 Re/M Oct 23 Target -Dec 19
    O/P's 2014/£4000, 2015/£6294.69,2016/£3186.80
    2017 £2422.71 + Phantom o/ps 2017 -£1367.81 so far
    • Ms-Bristol
    • By Ms-Bristol 26th Sep 16, 11:09 PM
    • 20 Posts
    • 69 Thanks
    Ms-Bristol
    Just to clear up those questions:

    I am not with the Halifax and my year runs from 1st July. On 1st July this year I phoned the bank and they told me the amount I could pay (10% of outstanding balance) which I did shortly after. This reduced my balance and my monthly amount.

    Then all the other amounts I save each month get put away in savings accounts because I cannot pay any more into the mortgage until the next year.

    These savings will accumulate until July 2018 when the fixed rate ends - which is also when the 10% limit on overpayments is lifted. The aim is to have the balance (or thereabouts) by then so that the mortgage can be paid off.

    But it is correct that if you don't pay off the whole 10% within the year, you cannot roll forward the amount into the next year as it is recalculated again on day one of the next year (whenever that may be).
    • A Frayed Knot
    • By A Frayed Knot 26th Sep 16, 11:30 PM
    • 2,128 Posts
    • 9,575 Thanks
    A Frayed Knot
    Your doing fantastic, so far.

    Just 2 points, I wondering about,

    are you not allowed o/p's of 10% each year?, which would then let you o/p 10% next July 2017 instead of when your fixed rate ends in July 2018, and

    Do they explain why you cannot keep paying the same amount each month, with or without o/p's? Worth asking.
    Always have 00.00 at the end of your mortgage balance and one day it will all be 0's
    MFMarch 30 Re/M Oct 23 Target -Dec 19
    O/P's 2014/£4000, 2015/£6294.69,2016/£3186.80
    2017 £2422.71 + Phantom o/ps 2017 -£1367.81 so far
    • Ms-Bristol
    • By Ms-Bristol 26th Sep 16, 11:42 PM
    • 20 Posts
    • 69 Thanks
    Ms-Bristol
    Yes, I will pay 10% overpayment next year as well on 1st July 2017. That amount will be about £7500 by then.

    When I make an overpayment of over three times the monthly instalment, the bank recalculate the monthly repayment amount. I presume you can make a load of smaller payments up to the 10% but which are each individually under three times the monthly amount.

    But that would be fiddly and make very little difference to the ultimate goal. As I pay less per month, I can save more.
    Last edited by Ms-Bristol; 27-09-2016 at 12:09 AM.
    • Ms-Bristol
    • By Ms-Bristol 1st May 17, 10:58 AM
    • 20 Posts
    • 69 Thanks
    Ms-Bristol
    April statement
    At the end of April, the statement from the bank arrived showing a balance of £77K. This means that by 1st July (my overpayment date) the balance will be about £76K and I'll be able to overpay around £7,600 and the new balance will be around £69K.

    This is quite good but my pot for overpaying the remaining sum in the summer of 2018 has not grown as much as it should. I reckon I'll be about £20K short of having enough when my fixed rate ends.
    • Ms-Bristol
    • By Ms-Bristol 6th Jul 17, 11:52 AM
    • 20 Posts
    • 69 Thanks
    Ms-Bristol
    Well, the 1st July has passed and because it was a Saturday I wasn't able to call the bank. I have a day off today (6th July) so I decided to call them to get my balance for the 10% payment.

    Barclays don't display a number on their website for existing customers. So I called a number on the back of the card I have. This was obviously not the right number but after answering loads of security questions, they tried to put me through to the mortgage team.

    Then they said that they were having technical difficulties so couldn't get my balance. They suggested a call-back in 2 hours so I asked what number they were going to call me on. But oh no! What they meant is that I have to call them back. So I am no further on.

    I can see my balance on my online account but because they add interest daily that will be slightly more than my balance on 1st July so if I pay 10% of that it will be too much and I would incur a penalty.

    Anyone would think that they don't want me to make an overpayment!
    • Ms-Bristol
    • By Ms-Bristol 7th Jul 17, 6:14 PM
    • 20 Posts
    • 69 Thanks
    Ms-Bristol
    July Overpayment Time
    I have just managed to get my 1st July balance from Barclays and the resultant 10% overpayment amount which I can pay without incurring penalties. The amount was £7595.

    I have just made this payment but it will take a couple of days to show up. It is interesting to see how the repayments clear so little of the balance compared to the overpayment:

    July 2016 - £89K balance
    July 2016 - overpaid £8.9K
    Aug 2016 - £80K balance
    July 2017 - £75K balance

    So the overpayment cleared nearly twice as much as the repayments.

    I should now have a balance of about £68K and I have roughly £40K in savings accounts. This is money I have saved but not been able to overpay yet because of the 10% limit. This will be lifted next June when my fixed term ends. At my current rate of saving, I think I will be about £6000 short of being able to pay the amount off by next July.
    • EatingTheElephant
    • By EatingTheElephant 8th Jul 17, 8:21 AM
    • 1,152 Posts
    • 6,176 Thanks
    EatingTheElephant
    Well done on making the OP, they don't make it easy do they?
    • Ms-Bristol
    • By Ms-Bristol 18th Jul 17, 11:33 PM
    • 20 Posts
    • 69 Thanks
    Ms-Bristol
    Well done on making the OP, they don't make it easy do they?
    Originally posted by EatingTheElephant
    Indeed not!
    I have had the follow-up letter from the bank now. This confirms the new balance is £68.4K and the new repayment amount is £490 per month.
    All I have to do now is save £2000 a month for a year! That won't be easy either as we have car trouble and the boiler has just broken!
    Last edited by Ms-Bristol; 18-07-2017 at 11:36 PM.
    • shangaijimmy
    • By shangaijimmy 19th Jul 17, 7:23 AM
    • 2,231 Posts
    • 10,256 Thanks
    shangaijimmy
    Fantastic progress. Are you now less than 12 months away from the finish line?
    MFW: Turning June 2036 into March 2023... 32//120 Payments Challenge, Diary Reduction £34,271.00
    Aug 2009: £163,051 // Current: £101,729.00 // Avg Daily Interest £4.57
    MFiT-T4 #8 - 56.74% of £41,000
    • Ms-Bristol
    • By Ms-Bristol 10th Oct 17, 10:29 PM
    • 20 Posts
    • 69 Thanks
    Ms-Bristol
    Fantastic progress. Are you now less than 12 months away from the finish line?
    Originally posted by shangaijimmy
    My fixed rate ends in June 2018, I think. Not sure if I'll have enough money to repay the full balance by then but 2018 still seems possible.

    The boiler has now been fixed and I have bought a new car (albeit second-hard) so those were a couple of bumps in the road.
    • Silence101
    • By Silence101 11th Oct 17, 5:05 AM
    • 292 Posts
    • 444 Thanks
    Silence101
    You've done so well hitting the 10% target every year! We've just got our first mortgage, but I don't think we'll manage the 10% yet, maybe 5% at a push, although it's easy to see that it gets easier every time the balance drops.
    09/17 Shared Ownership 50% share - Mortgage £77500 Original MFW 2052
    10/17 OP £108.01 /£100 11/17 £312.22/£100
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