Mortgage-Free Wannabe Welcome and Explanation

anjb

dexter-boy wrote: »

Would it be more beneficial for me to overpay my mortgage to the maximum allowed without incurring fees, or to save my money so that I have a bigger cash deposit when I want to buy a bigger house in a few years time?

My own opinion is that you need a balance.
Think about cost of moving. EA fees + Stamp duty. My preference would be to cover those in cash. You know where you stand and else you'll borrow it on a mortgage.

For the rest, depends on your current mortgage product. If your savings rate can beat your mortgage rate then accumulate cash. But remember paying it off the mortgage is kinda tax free savings.
My situation is im fixed at 5.18%, its better for me to put everything on the mortgage rather than save in cash. Although I do have a cash buffer for emergencies + home improvements.

You could for example overpay maximally then any excess into isas (if you've got any left :rotfl:) and the offset those isa packets with an offset account in the future.

frugalicious_2

Well I've been reading all the MFW posts & would love to join in.

Except!

I'm not sure whether it would make financial sense to do so given my current interest rate.

I'm in Ireland and my interest rate is based on the ECB so it is variable.
My mortgage has another 26 yrs and it allows for over payments online.

Mort balance: €270k
interest rate: 1.8%
savings rate: 3.5%
current repayments minus tax relief: €1014
currently overpaying: €150 pm
potential extra manual overpayments: €400 pm

The big question is whether I should join you all & focus on getting rid of the mortgage early or should I be saving the 550 in order to pay a lump sum when the ecb rates go up above 3.5%?

Any opinions? Thanks all for reading!

UnionGirl

Hope someone can tell me if I've done this right?

I just want to register as a MFW.

I started my mortgage aged 25 in April 2001.

Today (21/3/11), I have a mortgage of £15600 and hope to be mortgage free by the time I'm 40 (October 2015) - eek!

I currently overpay by £83.01 (monthly repayments are only £116.99pcm, I pay £200pcm).

I hope to be able to increase the payments at some point, however this is not looking likely at the moment. I do however save £200pcm into an ISA and will probably do a lump sum payment of £1k-£2k within the next 3 years.

Good luck and congratulations to all the people who are lucky enough to be in the position to overpay on their mortgages.

curlygirl1971

Hi Uniongirl & welcome to fighting the good fight

I guess you can join the many MFW's in a couple of ways. You can just do it, you can record a diary of your progress (start your own thread) or you can join a challenge such as the MFW 2011 thread.....come on over It's not too late to join in for this year

curlygirl1971

frugalicious wrote: »

Well I've been reading all the MFW posts & would love to join in.

Except!

I'm not sure whether it would make financial sense to do so given my current interest rate.

I'm in Ireland and my interest rate is based on the ECB so it is variable.
My mortgage has another 26 yrs and it allows for over payments online.

Mort balance: €270k
interest rate: 1.8%
savings rate: 3.5%
current repayments minus tax relief: €1014
currently overpaying: €150 pm
potential extra manual overpayments: €400 pm

The big question is whether I should join you all & focus on getting rid of the mortgage early or should I be saving the 550 in order to pay a lump sum when the ecb rates go up above 3.5%?

Any opinions? Thanks all for reading!

Entirely up to you and your circumstances. Some people get a buzz from watching a balance go down and others from watching a balance go up. If you are currently earning more on your savings then purely taking that fact into consideration, it does look like it currently makes more sense to save rather than OP. To convince yourself you could always use a Mortgage calculator like the one Locoblade has published

Lapinette

Hi All,

I'm not sure i'm posting in the right place but i'll give it a shot anyway. I've only recently heard about MFW and decided to give it a go!

I'm looking for any advice on whether i should pay the full amount on my mortgage in one go or not.

Here's my situation:

I have a flat with a £52,000 mortgage left to pay on it. If i don't make any overpayments then it will be paid for in 2023. I am renting this flat out. I guess my tenant is paying for my mortgage and the rent fully covers these payments. I am very lucky not to pay any rent else where as my husband has free accomodation with his job.:)

I also have sufficient savings to completely clear the mortgage with a little bit of savings still left over. Is this wise to pay off the mortgage when it's a rental flat?

Thanks for any advise.;)

qwerty001

Pay off Mortgage asap and so remove that costly debt forever (or until I move again)

Accomodation costs ie Mortgage/Rent being my single most expensive outgoing

shortchanged_2

Welcome back RenovationMan. Been anywhere nice?

Hurdler

Hello all. I took a voluntary redundancy package in June, and should be getting a permanent offer in the next couple of days so will be back in gainful employment in August, first payment end August/start of September.

I was overpaying by about £300 a month and as soon as I knew I had VR, I dropped my payments down.

Can I join in October? By that time I will have had my annual mortgage statement/recalculation ( I have a tracker mortgage with no repayment limits); I will have had a couple of months of salary so I will be better placed to know how much I can overpay by, and my goal is to throw as much money at the mortgage.

I want to put aside about 6 months of salary aside, as Martin suggests, for emergencies and also my longer term view is to go contracting/freelance.

Would like to check back once I have a few things sorted.

BonandDom

Having read the overpayment article and played with the tool DH and I decided to tighten our belts and start making some overpayments to our mortgage.

I contacted Santader and asked if there were any penalties and how we could make the payments, I was advised to take the money into any branch and there would be no penalty......

Last month we managed to put £140 in (1 x £100, 1 x £40).

We received a letter from Santander saying "thanks for the payment we will only take out £520 next month instead of £660. Phoned them up and said "No this was ann additional payment".

Today letter recieved saying we cannot shorten your term as payment does not reduce your term (not enough paid in).

What am I doing wrong?

Help would be greatly appreciated