Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • Tropically
    • By Tropically 12th Sep 16, 9:56 PM
    • 95Posts
    • 262Thanks
    Tropically
    Getting rid of a London-sized Mortgage
    • #1
    • 12th Sep 16, 9:56 PM
    Getting rid of a London-sized Mortgage 12th Sep 16 at 9:56 PM
    Hello,

    I tried to look for other situations which were like mine but you all seem to have everything so under control. You are all very inspiring so I thought I would put up my story too.

    I bought a house in June with my partner for £425,000 (London) and our mortgage is £318,000. Our mortgage payments are about the same as we were paying in rent but we have over 3 times the space now. Yes this a huge mortgage, no, we don't make a lot but the time came for us to buy instead of rent.

    Plan:
    1. Call bank tomorrow and see if I can 'round up' our mortgage which will cut off 2 years from the term.
    2. Get £10,000 in savings again as an emergency fund before over paying mortgage - I don't have any money at all any more.
    3. Get in a tenant from November 1st and rent the second bedroom for hopefully £700/month and apply that as over payments.

    It would be amazing if we could pay off the mortgage 10 years early. I would be just over 40. I have a lovely spreadsheet which calculates all of this for me. If we were to only apply the extra rental money to the mortgage, we would be able to pay off 10 years early.
Page 4
    • Tropically
    • By Tropically 30th Mar 17, 1:52 PM
    • 95 Posts
    • 262 Thanks
    Tropically
    I knew you were going to say Cayman! Having lived there myself and then also had family there, I understand the lure of the cheap holiday. Sadly our free board and lodgings are no more
    Originally posted by mfmaybe
    It's such a gorgeous place and the lifestyle is so good! The free board is key to having a cheap holiday there!! My sister is a fancy-pants corporate lawyer so I don't mind eating her food and driving her car, given that she wouldn't move back here as the salaries are "too low."

    On the mortgage overpayment vs term, I had a similar issue. We have been overpaying by about £300/month for a few years. When I was remortgaging this time, I noticed my term hadn't gone down which confused me immensely. Essentially though, it's due to a mix of customer fairness and risk in lending. On the fairness point, basically any mortgage application assumes you will keep the mortgage for the whole life of the balance (even though in reality most people take out a new product after the cheap rate ends). So, you agree with your bank to have say 25 years to pay it off. You overpay for a few years and they reduce your term by (for example) 5 years as a result. Then you have children. Your income goes down and you have childcare costs. Suddenly meeting even the minimum payment is tough; and that's higher than it might have been because you now have 5 years less to get the balance paid off. In those circumstances a customer might say "well that's not fair, we had a contract for a 25 year repayment term, why do I suddenly have to pay it off 5 years early"? On the risk part, it's the flip side of the same coin. The bank has decided you can afford the repayment at the current rate. They haven't scored you on whether you could afford more each month, so their risk would be greater - in other words more people will default with a higher payment. So - overall, that's why reducing the term has to be a new application. Even though I can overpay as much as I want, when I want (currently on SVR), it still doesn't change the term. So that means at the end of a fixed interest period, when the new payment is produced,it would be lower than if you had never overpaid. It does of course reduce the interest you pay and still has the same benefit; but you do need to keep an eye on the level of overpayment.

    That said, it doesn't explain why your bank make it so complicated regarding overpayments. Do they calculate daily interest? That's pretty important; if not then you must find out when they calculate interest and time your payments to be just before that point.

    Will follow with interest, am hoping to start a MFW diary of my own soon as plans are afoot!
    Originally posted by mfmaybe
    That's a really really good way of looking at it. And it does make sense - I agreed one thing with them and the right away want to change the terms of our agreement. In my head, we only have a two year agreement until the fixed term runs out, but in reality both of us (the bank and me) need to treat it like the 25 year partnership that it could be! I really must look into when they charge interest.

    I look forward to reading your diary!

    My boyfriend started his new job, which has caused some cash flow issues because they got the sort code wrong on his pay! It will be sorted in a few days, but because of that plus his celebrating his new job (a bit too much), we're a bit disjointed. I'm not sure when we can get the monthly overpayment in but it won't be until we've got his salary in the bank.

    I have been selling some bits and bobs on ebay. I have net £56.33 and put that into the overpayment account, to build up to £500. I also completed some "retail intelligence" price checks, which has net me £15.55. Plus I have also been selling used makeup (go figure) and when people pay up, it should be £50 or so. I have a lot of branded makeup - urban decay pallets etc. and apparently some people don't mind if it's gently used.

    We have the 'budgeted' £500 OP sitting in the joint account to be applied when my boyfriend's cash flow issues are resolved. The skimmed mortgage overpayment is sitting at £268. I hope we can apply it soon. After that, I might change our joint account to someone else. We only got £0.02 interest last month on a balance of £3,000 after you take the £5 Santander fee into account.

    I am still being very well behaved on the entertainment front, using cash! If I get a chance, I'll post much budget vs actuals when I calculate it.
    • mfmaybe
    • By mfmaybe 30th Mar 17, 7:43 PM
    • 901 Posts
    • 2,795 Thanks
    mfmaybe
    Haha yes Cayman salaries are something else. That said, living expenses are through the roof, my sister spent £1k/month on electricity alone and their food bill was eye watering! But their disposable income was really quite impressive. The no tax helps

    I'm glad the mortgage overpayment blurb helped as it was quite long, sorry about that

    That's annoying about the cashflow, hope it gets sorted soon. And wowee to people buying used make up. I have to say it's not something I would consider, but there you go. I once stumbled upon a market on fleabay for used tights. At an insane price, so let's just say I don't think it was for professional women looking for a bargain on their Wolfords Bleurghhhh...
    Owe to savings £2674/£1199.08 44.8% paid. Pay by Christmas 17

    Other debts paid since 1/1/14: £14,331
    • Runders
    • By Runders 1st Apr 17, 8:24 PM
    • 155 Posts
    • 445 Thanks
    Runders
    Hey Tropically,

    I've just caught up on your diary after I've been AWOL for a bit. It seems like you are doing really well on the over payment front!

    Thank for the comment you made about the Fourex machines. I was in London a few weeks ago and I got over £40 for all my random foreign coins.

    I've been awful on my entertainment budget recently, I have bought a few theatre tickets for this month, all are in London so I will need train fairs too. I will endeavour to not eat out to make up for this.....I may be kidding myself!
    MFW: Start: September 2014 - £110844
    Target: £95K Sep17
    Sep15: £105329.87 Sep16: £99192.71 Nov16: £100701.39
    Offset Target: £15K Sep17
    Offset £9126.70
    • Tropically
    • By Tropically 7th Apr 17, 12:46 PM
    • 95 Posts
    • 262 Thanks
    Tropically
    Hello again, mid-month update.

    My boyfriend has finally been paid! He had to take money out of the joint account for the cash flow. It has hopefully shown him the value of having an emergency fund. I hope that it results in lasting change. I know that partner support is a running theme in many people's diaries. I have one who wants to save money, but can't seem to. It realllllly makes sense for people in debt to have an emergency fund. I have one, but it's not that big. We will have to do some analysis later. We've been overpaying all of the extras in our savings account, but maybe we need to re-examine our approach.

    I've been selling quite a bit on ebay. It is so hard to get the postage thing right! I have put almost everything at 'Buy It Now' as it will mean less stress for me, and I'm more likely to get the price I want. If after 30 days of Buy It Now, it doesn't sell then I will donate it. I'm curious to

    I've been diligently recording my garden harvest. I have saved £4.50 so far this year... Really not a lot but it's only April. I'm have measured and then compared to the cheapest organic price to get my values. Most of it has come from purple sprouting broccoli and mitsuna.

    I shall return with graphs on Sunday perhaps, when I get a moment to relax.
    Mortgage, as of 30 March - £309,991. Original MF - 2041
    • FacelessNumber
    • By FacelessNumber 7th Apr 17, 3:44 PM
    • 365 Posts
    • 1,968 Thanks
    FacelessNumber
    Hi!


    I've had a read through your diary today, definitely sounds like you've got the right attitude! I'm going to subscribe to see how you get on!


    Well done to your OH for the payrise, I guess the trick is to save the difference and spend the same as before?

    • CouponClipper
    • By CouponClipper 10th Apr 17, 3:51 PM
    • 10 Posts
    • 36 Thanks
    CouponClipper
    Read your thread over the weekend Tropically. I also have a London sized mortgage of just over £211,000 - so smaller than yours at the moment.

    Currently not overpaying as me and my partner are trying to save £10,000 each first but hopefully next year with a payrise and some emergency funds we'll be able to start chipping away at it like you are.

    Good luck - I am subscribed on your journey!

    CC
    • Tropically
    • By Tropically 13th Apr 17, 12:22 PM
    • 95 Posts
    • 262 Thanks
    Tropically
    So, I thought I would try to get a part time job. I do various gig things like mystery dining, surveys, market research, and random-tasks, ebay etc. I thought that Deliver-eee would be a good place to sign up. I like cycling and there aren't that many delivery people around here (as I have noticed from when I try to order).

    So, I signed up. Then I received so. many. calls. I received one or two calls everyday plus follow-up emails. The emails would say, "book an appointment for training online." I thought that was great and was going to sign up online as soon as it was a little lighter in the evenings because I don't really like cycling at night. I wanted to test drive my bike around as well as I hadn't had it out over winter. Eventually I booked online and the calls stopped.

    For some reason, they texted me and said that my appointment was cancelled and I needed to reschedule. The calling every day started again. They called at least twice every day until I finally told them I was not interested. If they are so desperate for drivers, they should pay more than a pittance. But if they were going to harass me all the time to sign up, what would they be like to work with? So that isn't going to happen. I wonder if uber eats is so annoying.

    On the road this week I saw a Just Eat robot self-driving to deliver takeaway! I thought someone was playing a trick on me when I saw this robot cruising down the payment. It didn't look like anyone was driving it. I looked it up later and it was a genuine robot. So these delivery jobs might not last that long before robots take over!

    I made those graphs that I mentioned before and it is pretty sad. In the epitome of 'first world problems' we are still spending too much on entertainment. My boyfriend isn't too worried. We spent £776.72 on entertainment in January, £652.96 on entertainment in February, £574.29 on entertainment in March. That is just insaneeeeeeee. I don't feel like we are out too much. I spent £672 of that, and he spent £1,333 of that. So we're not uneven - we are both guilty.

    So let's see. What was sooo good that it was worth £2k??

    Cash - £32.50
    Cash - £50
    Cash - £30
    Pub - £12.60
    Cash - £30
    Nandos - £29.9 (and I don't even like Nandos, we were just too lazy to cook at home on a Saturday afternoon...)
    Cinema - £13.65
    Restaurant soft launch so 50% off food - £63.19
    Pub - £17.68
    Same pub - £4.99
    Same pub - £14.67
    Same pub - £9.67
    different pub - £9.60
    Cash - £30
    Pub - £11.20
    Same pub - £19.80
    Cash - £20
    Work team night out - £30.75
    Tickets to Hamilton bought on the day they were released on presale - £199.10
    Lottery - £10 (why???)
    Mystery package game - £100
    Pub - £15.10
    Meeting old friends for din - £16
    Pub - £7.50
    Fancy meal out - £64.60
    Pub - £20
    Pub - £9.3
    Cash - £30
    Pub - £7
    Meal out for lads night - £36.02
    Cash - £30
    Pub - £7.85
    Pre-play drinks - £8.60
    Pub - £8.40
    Pub - £12.40
    Cash - £20
    British Museum Exhibit - £26
    Meal out with friends - £50
    Chocolate pre-cinema - £3.85
    Pub - £9.3
    Cash - £30
    Drinks - £11.49
    Cash - £30
    Pub - £12.15
    Cash - £30
    Work drinks - £5
    Cash for the month of March to cover all entertainment (supposedly) - £100
    Meal out because of laziness - £36.50
    Learning to climb - £20
    Going climbing - £13
    Leaving drinks for boyf - £23
    Not really sure... - £200
    Cash - £30
    Cash - £30
    Pub - £14.40
    Cash - £30
    Meal out - £54
    Drinks - £10
    Cash - £30
    Meal out - £4
    Not even sure... £56.33
    Meal out - £9.56


    Cash... Cash... Pub... Pub... Cash... Cash...

    What do other people do for fun that doesn't cost so much?? I would love some ideas. There are so many fun things to do in London for free but then we tend to go to the pub or buy food out once we are out.

    I think I've done a good job but sometimes I have externalised the cost to my boyfriend as he paid for two of the fancy meals out. I can see there were a lot of times that I wasted money because I was too lazy to cook.

    We also spend an average of £100/month on naughty food - i.e. bad planning meant we had fast food/grab and go food.

    I hope summer will mean we do more BBQs and parks rather than pubs.
    Mortgage, as of 30 March - £309,991. Original MF - 2041
    • mfmaybe
    • By mfmaybe 13th Apr 17, 3:09 PM
    • 901 Posts
    • 2,795 Thanks
    mfmaybe
    Well we don't live in London, we're likely much older than you, and we have a small child! But long before we had him, we'd moved on to meals being at people's houses not in restaurants. And just drinking at home, lol. The museums here are free so that's often a wet weather activity. Dry weather will usually just be anything outside. A walk. A park. A cycle.

    I think you don't have debt outwith your mortgage, and you are living within your means so it is hard to find the impetus to cut back.

    Could you work out something like - every £20 you spend in a pub could save you £30 (or whatever) if you paid it off the mortgage now? Set yourself rules about how often you eat out, or how many hours you spend in a pub during a month.
    Owe to savings £2674/£1199.08 44.8% paid. Pay by Christmas 17

    Other debts paid since 1/1/14: £14,331
    • Yaz_2016
    • By Yaz_2016 14th Apr 17, 8:11 AM
    • 17 Posts
    • 56 Thanks
    Yaz_2016
    Its crazy how much you can spend isnt it? I had unexpected costs arise this month! My cat need dental treatment £400, my plasma tv had screen burn which my insurance does not cover for so £700 for a new 55" samsung, hubby wanted re-map to our X5 £350, random shopping perfume etc £300, private reg for a birthday present £300. So thats over £2000 spending. That is not even including the 3 takeaways we ordered this week! Its CRAZY
    • michelle09
    • By michelle09 14th Apr 17, 1:27 PM
    • 148 Posts
    • 249 Thanks
    michelle09
    Hmm... what is it about the pub that appeals to you? The atmosphere or the drinking? Can you replicate it anywhere else?

    We started making our own cider at home (obviously it requires planning in advance) but we can produce 40 pints for about £30 ingredients. Then we invite friends over where we provide the cider and games, and everyone brings a pot of food.
    • Jessy103
    • By Jessy103 15th Apr 17, 10:05 AM
    • 201 Posts
    • 679 Thanks
    Jessy103
    Hi tropically! I might sound a bit of a bore (I'm 30) but I love reading so to save money I swap a lot of books with friends, my MIL likes doing jigsaws so I borrow them when she's completed them, I also like to do a bit of crosstitch and I grow some vegetable in pots on the windowsills and in my little garden. It would be good if you could find a hobby that doesn't cost much that would keep you entertained at home instead of going to the pub. x
    Original Mortgage Amount 2007 - £87,310.50
    Mortgage Amount April 2017 - £64,990.00
    Overpayment Target for 2017 - £5,000 /£1,521.37
    Jan - £873.26 Feb - £185.38 March - £269.07 April - £193.66
    • Tropically
    • By Tropically 19th Apr 17, 4:54 PM
    • 95 Posts
    • 262 Thanks
    Tropically
    I think you don't have debt outwith your mortgage, and you are living within your means so it is hard to find the impetus to cut back.

    Could you work out something like - every £20 you spend in a pub could save you £30 (or whatever) if you paid it off the mortgage now? Set yourself rules about how often you eat out, or how many hours you spend in a pub during a month.
    Originally posted by mfmaybe
    You are right on the money. Every £20 saved from the pub would mean £11 of interest saved, so £31 later. My rate of discounting is probably such that I would rather have £20 now instead of £31 in 25 years time... We are 27 and 29, and are spending about 18% of our salaries on entertainment at the worst. We are saving 18% of our salaries as well, plus 5% going into a 'house float' fund, outside of mortgage overpayments If I look at it that way, then it makes me not want to cut back at all... I guess the point is to not feel bad, but to plan so that the food I eat out is food I want to eat and the drinks I have out are drinks I WANT to have, rather than just because I am out of the house.

    Hmm... what is it about the pub that appeals to you? The atmosphere or the drinking? Can you replicate it anywhere else?

    We started making our own cider at home (obviously it requires planning in advance) but we can produce 40 pints for about £30 ingredients. Then we invite friends over where we provide the cider and games, and everyone brings a pot of food.
    Originally posted by michelle09
    Without being rude, is the cider good? I have seen there are some good things at Lakeland which appeal to me. I love making new things. Games is a good shout. I should organise a games night.

    Hi tropically! I might sound a bit of a bore (I'm 30) but I love reading so to save money I swap a lot of books with friends, my MIL likes doing jigsaws so I borrow them when she's completed them, I also like to do a bit of crosstitch and I grow some vegetable in pots on the windowsills and in my little garden. It would be good if you could find a hobby that doesn't cost much that would keep you entertained at home instead of going to the pub. x
    Originally posted by Jessy103
    I should read more books, definitely. It's a lot of fun. When it gets nice again I could sit outside and read books in the garden!! I have many solo-hobbies but it's the social part that I need to get better at. Maybe I should really really try for board games and beer at home. I get a little bit of anxiety at inviting people to my house, and when hosting I want to go all out with 10 course fancy meals. I could just relax about it. My mum is always stressy about having people over, for example at Christmas we usually have at least 15 dishes for 6 people attending... My boyfriend on the other hand doesn't want to even tidy before guests arrive. A balance is in the middle of course.

    So in other news, I was a BrewDog Equity Punk and should be getting a payout on some of my shares! I will be getting about £200 from their recent buy out so that'll be a nice bonus. I have to research the tax implications but I hope it's alll mineeee.

    I am also going to diligently record my garden produce and transfer savings into my OP fund. So far, I have saved.... £5.00......... so not the greatest yet but I hardly have anything in yet.
    Mortgage, as of 30 March - £309,991. Original MF - 2041
    • mfmaybe
    • By mfmaybe 19th Apr 17, 8:16 PM
    • 901 Posts
    • 2,795 Thanks
    mfmaybe
    Ah, DH was also a punk and he's a bit annoyed about it at the moment. Something to do with the number of shares you are allowed to cash in, but they've just done a share split which means he can only reap 10% of what he thought. There's quite a lot of noise about it apparently. Still, it's a nice return on investment!

    So on your entertainment budget; you sound in an incredibly good place financially for the age you are. If you don't actually want to cut back your entertainment budget, then don't. Within reason (Such as not getting into debt) then do whatever makes you happy. You are only young once
    Owe to savings £2674/£1199.08 44.8% paid. Pay by Christmas 17

    Other debts paid since 1/1/14: £14,331
    • michelle09
    • By michelle09 22nd Apr 17, 12:01 PM
    • 148 Posts
    • 249 Thanks
    michelle09
    It's not rude - it's a reasonable question! I quite like it, although it's a little drier than my normal preference. My OH loves it. No we're getting the garden redone he's checking apple trees so we can start from scratch (rather than the puree).

    The first time we did it, we had a party and I bought a few bottles of wine just in case people had preferences/didn't like it etc. Only one bottle of wine got opened between the seven of us.

    My main tip is - leave it after bottling as long as possible. It's drinkable after two weeks, but much better after six months.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

62Posts Today

3,080Users online

Martin's Twitter
  • As I've said before - energy price cap sounds good, and will likely be popular, but there's a big risk of making th? https://t.co/ubeV9vnmU7

  • Just seen @IvoGraham doing stand up in a comedy club. Superb, witty, self depricating, clever stuff. Go see him if you get the chance

  • RT @ChrissyNunn: New one from @Tesco today.. "The sale of Goods Act is just legislation, it's like a guideline, it's not law" @MartinSLewis?

  • Follow Martin