Mortgage Overpaying Rises at the banks

setmefree2

http://news.bbc.co.uk/1/hi/business/7843221.stm

Seems that everyone wants to be mortgage free . Any mortgage-free-wannabes should come and join us the MFW board....

WTF?_2

setmefree2 wrote: »

http://news.bbc.co.uk/1/hi/business/7843221.stm

Seems that everyone wants to be mortgage free . Any mortgage-free-wannabes should come and join us the MFW board....

Excellent news - paying off debt and reducing borrowing is exactly what people need to be doing.

Glad to see that mindless credit-fuelled consumption seems to be going out of the window, what a pity that it took a train-wreck in the economy to make it happen though.

cogito

27000 isn't all that many though and G*rd*n Br*wn wants us to spend our way out of recession.

A friend of mine whose mortgage is over £300 a month less than it was 6 months ago hasn't a thought of overpaying and views it as more to spend on holidays. He just doesn't understand that he could be in negative equity before long.

BlondeHeadOn

setmefree2 wrote: »

http://news.bbc.co.uk/1/hi/business/7843221.stm

Seems that everyone wants to be mortgage free . Any mortgage-free-wannabes should come and join us the MFW board....

I've just paid off £17,000 on ours - does that qualify?

It feel really good by the way - and we were nowhere near negative equity to start with, so it wasn't a forced move.

Our mortgage is now under £40,000 - boy, does that feel good!!

:j

funkyfreddy9k

cogito wrote: »

27000 isn't all that many though and G*rd*n Br*wn wants us to spend our way out of recession.

A friend of mine whose mortgage is over £300 a month less than it was 6 months ago hasn't a thought of overpaying and views it as more to spend on holidays. He just doesn't understand that he could be in negative equity before long.

followed by high interest rates and mortgage payments they can no longer afford to make!

tomstickland

Since savings rates are so low and my mortgage is fixed I've been moving money into the mortgage.

I've updated my general spreadsheet so it includes mortage debt now. I've got some targets. I could just about survive on a 5 year term, but I'm probably going to go for 10 years, though recession fears might mean I wait on that one.

setmefree2

BlondeHeadOn wrote: »

I've just paid off £17,000 on ours - does that qualify?

It feel really good by the way - and we were nowhere near negative equity to start with, so it wasn't a forced move.

Our mortgage is now under £40,000 - boy, does that feel good!!

:j

Well done on that . You should come and join us the MFW board for the rest of your journey......There is a Mortgage Free Roll of Honour also - for when you are completed.

lana22

It's been a pretty easy decision for anyone on a tracker; just keep repayments the same as they were before the cuts!
Does anyone know when you get a sort of mortgage statement? We have never had one, so don't know how much we still owe etc. Obviously the original statement thing was based on interest rates at the time and we have overpaid since then.
Also, someone told me it wasn't worth overpaying when you have a fairly new mortgage? I can't see this being true, but maybe I'm missing something? We are overpaying about £300 a month, is this too small an amount to make an impact?

Thanks if anyone can answer these questions.

Radiantsoul

Mortgage statements are normally yearly, but internet banking gives you a nonprinted one whenever you want!

Conrad

I've got to say almost everyone I talk to is focused on paying down the mortgage right now, as I myself am.

I like this part of the forum however, as the subject matter is essentialy the fabric of our times. I can't engage nor find stimulation in a discussion about how I paid £10k off me mortgage! Who cares?

WestonDave

Lana - there are a few things you need to watch out for when overpaying. Firstly that on a new mortgage there are often limits on overpaying and if you exceed them you get penalties which outweigh the savings. Alternatively some lenders still calculate balances annually so again making overpayments doesn't have any immediate effect. The remedy for both is to put the money in a savings account ready to use when you can overpay, but obviously at the moment savings rates aren't that great.

As for £300 a month - if you come on over to the Mortgage Free part of the forum - go back to the main screen and its about the 6th from the top, you'll find links to various calculators (often referred to as snowball calculators) that will show the benefits of any overpayment. In short however anything you overpay (especially early on) will have an impact on the interest you pay. The earlier you make the overpayment, the bigger the impact as that's potentially 25 years interest on your £300 you've saved.