Quickest Way

dubaiscot

Hi Everyone,

We have a mortgage at the moment with C&G, fixed until May 2010 at 5.29%. We are returning to the UK in 4 weeks after having lived abroad for 3 years - during this time we have been overpaying our mortgage by 350GBP per month and there is 138,000 left.

We are in the really fortunate position that we dont have any other finance or debt, and should be able to overpay by approximately 500GBP per month. Our house is worth approx 280-300K based on the current market.

My question is, given the above, what is the quickest way to pay this mortgage off? Once we come to the end of our fixed period, should we remortgage onto another fixed deal, or is offset better (i know nothing about these)? I am 31 at the moment and would love to have this gone by the time I am 40!:beer:

Your help and advice would really be appreciated.

DubaiScot

Welshlassie

Plug yor figures into a mortgage calculator, I like this one, it can show you what difference your OPs will make. You can also use it to offset your savings and see what that will do.

Offsets are great if you have a large amount of income going through your account each month (if you use credit cards (cashback card the best) to buy all your monthly purchases and then pay of the card just before it is due from your curent account, you can make the money work even harder) or if you have a far bit of savings, the slight disadvantage to them is they interest rates tend to be slightly higher that other types of mortgage.

You still have 18 months or so to run on your fixed deal so don't worry too much amount what your going to transfer onto at the moment the market is in such as state of flux it's difficult to predict what is going to happen next month, never mind in 18 months.

Good luck, I want to get ours mortgage paid off by the time I'm 40 in just over 10 years so know where you're coming from.

Jonbvn

Welshlassie wrote: »

You still have 18 months or so to run on your fixed deal so don't worry too much amount what your going to transfer onto at the moment the market is in such as state of flux it's difficult to predict what is going to happen next month, never mind in 18 months.

Spot on. I've got more chance of predicting the lottery numbers than predicting what the financial landscape will be like in 2010!

dubaiscot

Thanks Guys - you are right - it is too soon to speculate on what to do in 18 months.

Iyaask

Hi friend, I was also in need for such kind of information, thanks for sharing.

dimbo61

Hi Scot
If you carry on overpaying by £500 a month for the next 18 months and make
your normal payments you will be looking at a £120,000/125,000 mortgage in may 2010.
If you can get a 5% fixed rate deal of 8 years ! it should cost you approx
£1300/1350 a month to clear your mortgage before you are 40.
GOOD LUCK

dimbo61

Sorry got my maths wrong
£125,000 repaid over 8 years would cost £1582 a month at 5%
I have offset some of my mortgage !!

dubaiscot

Thanks dimbo61!

So if i were to get an offset mortgage in 2010 (assuming that is possible then!) and make payments of 1582 per month, this would be better than making the same payment to a "regular" mortgage?

As I say, I want to know the quickest way to pay it off and it sounds like this might be an option.

Thanks again.

dimbo61

Who in gods name knows what will be going on with the mortgage market in 2010 !
I have a fixed rate offset mortgage with a building society and hope to be mortgage free in a few years.
I got ( I think ) at the time the best deal I could and I have been lucky
that my fixed rate is still cheaper than most deals on offer today !
I like the offset as we have been able to offset a large portion of our mortgage with help from friends !! and our own savings ( tax free )
We can overpay with no limits and have flexibility to take payment holidays
BECAUSE we have overpaid .
If you come back from dubai with a good savings pot then you can pay this into the offset account or cash ISA,s to get the best rate of return.
My wife and I have been very careful with our money and chose to have a cheap MPV and not a BMW 330 diesel or saab convertable.
We use this website to save money on everything from insurance, shopping,
to which company we have the gas and electric from.
I still enjoy life I just chose budget airlines and spend my money when I get there ( Italy,sicily,france,holland, spain,eire,scotland etc) GOOD LUCK