Will £500 a Month Make a Difference?

dimbo61

Well done on the first of many ! overpayments.
Good luck on the marry a millionaire !
Girl power now there is the answer
We dont know what savings you have in the bank but having 6/9 months worth of income in a savings account ( cash ISA ) would be a good start.
Then overpay and get that mortgage smaller every day.
its interest only mortgage so you need to overpay or it will still be hanging over your head in 20 years. GOOD LUCK

amazamum

champers2008,I'd just like to say good luck in paying off your mortgage,I'm sure if you are focused enough you will do it.
I have an offset mortgage set up dec last year and I have to say I think they are great and are working perfect for our family(both work part time),I wish I had found them earlier,I'd have the mortgage paid off by now with hindsight.
Ours tracks at 0.49% above the bank of england base rate so in the time we have had ours,our interest rate has gone from 6.75% to 4.99%,hopefully to go down again in the coming months.
Good luck amazamum

champers2008

I wish I'd found this forum earlier too . . . been filling my life with buying 'fillers' . . . until my new partner, who I haven't met yet, appears on the horizon (:j ) I'll focus on paying off my mortgage instead. This forum definitely focussing the spending . . . I think it's excellent.

Only spent £50 today on groceries and a bottle of bubbly! Wot|? I needed it! :A

xx

Kavanne

champers2008 wrote: »

Evening all, :rolleyes:

I'm not quite sure how an 'off-set' works, but is this a better / quicker option than say investing in an ISA each year.

Or would the ISA plus perhaps a savings account be a better / quicker option?

Does 10 years sound a reasonable period to clear the mortgage?

I'm no expert but I do have an offset mortgage.

I have a total outstanding on my mortgage of approx. 68000. I also have 18000 of my savings in an offset account. This means I only pay interest on 68000-18000 of my mortgage (so 50000) but I don't EARN any physical interest on the money in the offset account.

Using the mortgage calculator someone on here made I have calculated this will reduce my mortgage term from 25 yrs to 17yrs and that's if I don't make any further deposits.

The thing I like about offset is that if I want to do some home improvements I can get to the money at any time, just takes 3 working days to transfer back to my current account.

Also I could potentially reduce my monthly payments if times got hard (so I would put my mortgage term back to 25 yrs but pay less each month), so yeah, very flexible but I understand not suitable for everyone. Good to be aware of for when your deal ends in Aug 09.

The rest o my savings (about 5000) I have in an ISA which is at 6%. Currently my mortgage is tracking and only at 5.25% so my ISA is making me a profit So again, ISAs are worth thinking about if at a rate higher than your mortgage.