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  • FIRST POST
    • financiallyfreewanabe
    • By financiallyfreewanabe 2nd Feb 18, 2:50 PM
    • 8Posts
    • 0Thanks
    financiallyfreewanabe
    Advice needed please?
    • #1
    • 2nd Feb 18, 2:50 PM
    Advice needed please? 2nd Feb 18 at 2:50 PM
    Hi all, I'm just about to pay the 10% allowance of my mortgage but heard Martin say briefly on a recent program to always reduce the term not the monthly payments. I'm a bit confused because I've been reducing the monthly payments every year I pay my 10% so I have more disposable income each month but now I'm reconsidering. I'm working towards being mortgage free asap.

    My situation:
    Fixed 3.39% mortgage with Santander until Oct 2019
    £26,316.52 left paying £189.13 per month.
    Term: 14 years 8 months left

    I have a small income so I would be ok to pay up to £200 a month again to pay it off quicker if that's the best way otherwise if it makes no difference I'd rather pay less each month.

    What would you do?

    Cheers in advance for advice

    Ignore my signature. I can;t figure out how to edit it... :-/
    Last edited by financiallyfreewanabe; 02-02-2018 at 8:08 PM.
    Aim: to be mortgage free by end of 2016!!!
    'Being wealthy doesn't depend on what you earn, being wealthy depends on what you do with what you earn'

    I will be financially free!
Page 1
    • pennystretcher
    • By pennystretcher 3rd Feb 18, 8:40 AM
    • 352 Posts
    • 1,386 Thanks
    pennystretcher
    • #2
    • 3rd Feb 18, 8:40 AM
    • #2
    • 3rd Feb 18, 8:40 AM
    I'd pay the 10%. and I wouldn't change the term, there is usually an admin fee to do that...
    MFW Feb 2018 £90 - yes, £90!!!!! (almost there!!!)
    • beanielou
    • By beanielou 3rd Feb 18, 4:53 PM
    • 50,681 Posts
    • 194,078 Thanks
    beanielou
    • #3
    • 3rd Feb 18, 4:53 PM
    • #3
    • 3rd Feb 18, 4:53 PM
    It's really up to you.
    Do you want to pay mortgage off quicker or have more money in your pocket.
    Lou~ Debt free Wanabe No 55 DF 03/03/14.
    **Credit card debt free 30/06/10~** **Weight loss 2 stone 2 lbs **

    "A large income is the best recipe for happiness I ever heard of" Jane Austen in Mansfield Park.
    ***Fall down seven times,stand up eight*** ~~Japanese proverb.
    It starts with you, it starts from now. *** It is ok to be me.*** ***Keep plodding***
    • MM10
    • By MM10 3rd Feb 18, 7:16 PM
    • 45 Posts
    • 135 Thanks
    MM10
    • #4
    • 3rd Feb 18, 7:16 PM
    • #4
    • 3rd Feb 18, 7:16 PM
    To be mortgage free as soon as possible you have to reduce your term with the overpayments.
    Check if there is a charge to do this and if there is ask the banks if they can waive it.
    Total mortgage when started £256,809 in May of 2011; 2018 MFW #5
    Main mortgage was £214,309; now £110,716 at Feb 2016 ; £63,645 at Feb 2017 ; £29,000 at Feb 2018
    Original repayment date 2036; Mortgage free date July 2021; Dec 2020; Oct 2019;
    • Viking_mfw
    • By Viking_mfw 3rd Feb 18, 8:09 PM
    • 117 Posts
    • 499 Thanks
    Viking_mfw
    • #5
    • 3rd Feb 18, 8:09 PM
    • #5
    • 3rd Feb 18, 8:09 PM
    Although if you're in a fix til October 19, you can just keep overpaying as you have been and when you refix shorten the term. Having more money per month til then allows you to overpay each month or if you've done your maximum, to save it for the end of the fix and pay am extra sum when shortening the term.
    Save12kin2018 #100
    • Rolandtheroadie
    • By Rolandtheroadie 9th Feb 18, 8:15 AM
    • 4,834 Posts
    • 4,236 Thanks
    Rolandtheroadie
    • #6
    • 9th Feb 18, 8:15 AM
    • #6
    • 9th Feb 18, 8:15 AM
    Remortgaging just now, had been overpaying £200 per month for a while now.
    As we're used to paying it, I looked at reducing our term. With a better deal now, we've reduced the term by 5 years (down to 8 years), and will be paying £50-£60 less than we were before, including the over payment.
    Hoping to then overpay again, target to be MF by my 50th, in 6 years.

    Edit. I'd read the £200 wrong, thought that was an over payment.
    I'd still probably go down the same route though, reduce the term if affordable in October 2019, then overpay on top if able to.
    Last edited by Rolandtheroadie; 09-02-2018 at 8:20 AM. Reason: Misread OP
    • A Frayed Knot
    • By A Frayed Knot 9th Feb 18, 9:54 AM
    • 2,261 Posts
    • 10,162 Thanks
    A Frayed Knot
    • #7
    • 9th Feb 18, 9:54 AM
    • #7
    • 9th Feb 18, 9:54 AM
    Although if you're in a fix til October 19, you can just keep overpaying as you have been and when you refix shorten the term. Having more money per month til then allows you to overpay each month or if you've done your maximum, to save it for the end of the fix and pay am extra sum when shortening the term.
    Originally posted by Viking_mfw
    I agree with Viking_mfw - as above, exactly what I would do/have done.


    With an addition of asking Santander what the penalty would be if you re-mortgaged just now, then calculate what the saving would be with your new interest rate in your new deal, using your lower term years plus your new payment figure (eg £200.00).
    Always have 00.00 at the end of your mortgage balance and one day it will all be 0's
    Target 24 months 1/24
    MFMarch 30 Re/M Oct 23 Target -Dec 19
    O/P's 2014/£4000, 2015/£6294.69, 2016/£3186.80, 2017 £4068.97

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