Mortgage Busting - Any ideas??

Wannabe-Mum

Hi Everyone,

My other half and myself have been reading these forums for a few weeks now and quite frankly, we are addicted!!

Although we don’t consider ourselves to be particularly in debt, we have a mortgage of £146k (brought about by my partner having to buy his ex out of the property) and a loan of £6k.

We are both very very keen to start a family but we have decided to wait another year before trying as we want to pay off the loan and save as much money as possible.
We already have £4k saved to put towards paying off the loan. We are in the process of getting a 0% credit card to borrow the remaining £2k. We will then be able to pay off the credit card interest free over the next 3-4 months.

Once the loan is paid off, we will then be able to save approx £1700 a month by living off one salary and saving the other. We have also adopted all the money saving tips from this website. We have switched all our utility suppliers, we lead the campaign for Smart Price food at our local Asda (!) and we have already made £40 this week by selling unwanted books, cd’s and dvd’s on Amazon. And that's the tip of the iceberg!

“We have a Baby Savings” bank account and the money we make from Amazon sales goes straight in there so it should build up over the next 18 months or so and we will put this money towards buying things for the baby.

Our aim is to save at least £20k by the time our current mortgage arrangement ends in 18n months time. We will then be able to lower the amount we will need to borrow and this in turn will reduce our monthly repayments, which is quite important as I will be going part-time after maternity leave.

So, does anyone have any more money saving ideas for us and more importantly, any advice on getting the mortgage down to a less scary amount! We have heard of the One Account, which claims it can knock years off your mortgage – does anyone have any advice/experience of them?

Sorry for the long post and good luck to everyone on the forum!

K x

skintchick

HI - there is a mortgages forum i think where this might be better off, but...

I was told that a one type account only works if you have 40 per cent of the mortgage owed in savings, and that otherwise you are better off overpyaing oyur mortgage.

Can you do this with your mortgage? Ring your provider and ask them when they calculate interest, if you can overpay, if so how much by, then go to

https://www.whatsthecost.com/snowball.aspx

and put your details in (provider will tell you term left and balance and interest rate) and see how much you can save by overpaying.

You may be better of doing this than saving it and adding it at the end, but it depends on the mortgage that you have.

HTH

Wannabe-Mum

Thanks for that - will look into mortgage agreement to see about overpaying.

Have done the snowball calculator - it seems we could pay the mortgage off in 15 years if we overpaid by £250 each month. This would be even better as my other half retires in 17 years! (that makes him sound old - he's only 31, but plans to retire from his current career at 48!) So to be mortgage free by then would be fantastic.

We will look into this further - thanks again.

K x