Tips on becoming mortgage free please?

tiredredhead

Hello I have decided i want to be mortgage free asap realistically it is going to take a few years of hard work i know. We Owe £255500k on a £310K house. Have no debts at present and are in a good position to overpay. We are just in the process of moving mortage (waiting on paperwork) we are going for a 2 year tracker deal at 6.14. Can change our minds on this.

However after reading the stories of people with large mortgages that have been massively reduced or paid off in a short time we are thinking about stoozing and going for an offset mortgage instead, one with an option to fix if neccessary.

Can anyone offer any advise on stoozing against an offset mortgage and has it really helped alot. At one point when in small amount of debt but had balance transfered quite a few times we had around £80k credit available on credit cards. These are now all cancelled as advised by mortgage advisor to improve credit score. But we are assuming we are still credit worthy of a large pot of stooze money.

We have already reduced our outgoings as much as possible, to allow overpayments so this would probably be a good way to bring down the interest costs off mortgage.

Thanks for any advice

spandles

I have just stumbled onto your question...... now I may be wrong here but i dont think there are any cash credit cards around at the moment to stooze with! That is just my opinion but good luck !!

tiredredhead

Maybe i have misunderstood stoozing but arent the necessary credit cards just ones that will balance transfer on a 0% interest rate (most charge a fee).
Last time i balance transfered they offered to put money straight into bank account.

angelavdavis

Have a look over on the stoozing thread, this is likely to be deemed a fund transfer - or cash advance and will incur charges accordingly. You usually need a mule credit card, such as an Egg card that allows you to move positive balances into bank accounts.

I stoozed to the tune of £25k last year for my offset. It did work, but you do have to be on the ball to move the money in good time back to the cards and once you get a few going, its easy to get confused.

http://forums.moneysavingexpert.com/showthread.html?t=533499

StuartGMC

Offsets and CAMs (Current account mortgages) usually work well with the right approach and with a sufficient savings pot to put against the capital, as the interest rates aren't usually the best. However, don't just look at the headline figure, as your effective interest rate will be less due to the offset.

I think previously 30% of your capital was thought to be a good position for offset, but things may have improved now.

Run the Egg calculator to look at your situation.

In my own household budgeting spreadsheet, the effective interest rate is derived and everything is summed to give a "total" position, which allows use of offset accounts and ISA etc. CAMs do this for you. Other difference I think is former have a decreasing facility over the mortgage term (repayment) but latter need not?

I guess you have your own spreadsheet for all your costs, but PM me if you want a blank version of the one I use. My thread has background on our approach.

Good luck and do maintain this thread now you're here!

tiredredhead

Great thanks.
I think with the balance transfer fees that are charged its just too much hassle to worry about stoozing at the moment, i will just make overpayments by working extra. Will then reconsider stoozing after deal ends in 2 years. Looks likely that interest rates are going to come down so am glad i went for the tracker.
I have also seen how motivational a diary on here is so will try to keep one as well.

StuartGMC

Offset may still be worth it. You are probably on a good monthly joint income, plus you have savings for the emergency fund. Using credit card for all spend then paying off in full a day or so before deadline can mean a reasonable amount sits offsetting.

If you have cash ISAs then some offsets allow you to set against the capital (they won't grow, but once mortgage is paid off, they are still in the tax-free wrapper). I'd recommend looking round now, get a feel for the products and comparisons so you can review in future even if not now.

Yes rates are very volatile, so fixed may not be best at the moment.