Mortgage-Free Wannabe Welcome and Explanation

Sepa74

Hi,

All other things being equal, because the interest rates are all the same, it doesn't really matter which you pay off first.

So it's up to you, really. Do you want the peace of mind that you are gradually reducing the capital part of the interest only mortgage, or would you like to simplify things and get rid of the little mortgage and then use the money you were paying into that to pay off the next largest (it's called snowballing).

lamarsi

I have just made my first overpayment ..t'was only £100 but considering the financial mess I have just clambered out of its a Wonderful feeling!!!! I used to look at the mortgage free bit of the forum and think ' who can be seriously thinking about that?' tell you who ME!!!!!

bargainbetty

I'm signing up. Damn, never thought I'd do it, but I'm signing up.

My last car payment goes out on 1st June, and I have no other debt than the mortgage. I went into the branch today and made a £500 overpayment on the mortgage, and it felt really good. According to the calculator, it's saved me £202 in interest and cut two months off the term.

So, all my car payment money will now go to the mortgage. I can pay off £500 quarterly without noticing a change and that'll bring it down some and save me money overall!

I feel terribly sensible.

FinancialFerret

One-pot style Woolwich Mortgage originally £105k (2003) with £56k savings in a linked (Barclays) current account, offset each month against the 85k of the mortgage that is interest only.

Outstanding balance £64,607

Amount saved in interest to date £16,264

Endowment policy matures this year (25 years since my first mortgage! OMG :eek:) which should give around 21k to pay off the repayment part of the mortgage.

Not worked out when I might get to be mortgage free just yet!

chikarma

Overpaying is the way forward as you get such a saving. Great board.

mortgagepain

Originally bought an apartment in Q1 of 2007 in Northern Ireland at £230000 (stupid I know) with a deposit leaving a £112000 mortgage. It's currently valued at £150000 leaving a whopping 51.3% reduction in value, anyway:

Since then:
03/07-03/09 - 5.24%
03/09-06/12 - 4.49%
06/12-present - 2.85%
Remaining mortgage is now £40,000

I've been extremely focused over the last 6 years to use any savings in mortgage rates or overpayments to increase my overpayment rates.

At this rate I should have a completed mortgage in Jan 2015

Sepa74

Wow, that is painful. However at least you have done fantastically well reducing the millstone around your neck, and I once it's paid off you can focus on building up your overall wealth and securing your future.

dave_j

House Purchase Price £365000 (Aug 2002)
starting mortgage value £272000
Remortgaged a few times since then to get better rates/deals.
Current Mortgage £172000 (May 2012)
Current House value approx £550000
i am on a BofE base rate tracker mortgage of base rate +0.17% fixed for life (best i've ever had).
Mortgage has 15years due to run if i pay the basic monthly payment of approx £1000 per month but i am currently overpaying by about £400 per month as well.

would love to be mortgage free within 10 years if possible.

still live a good lifestyle and have holidays each year so fingers crossed everything will come good in the end.

Sepa74

That interest rate is great, in fact so great you would be better off saving the money! Do you max out your ISA's each year? They can provide a very handy tax free income when you retire, and your money will definitely earn more in an ISA than paying off your mortgage.

It might be frustrating to not see the mortgage balance come down, but it would be better for your finances in the long term.

JulieGeorgiana

Just want to become a Mortgage Free Wannabe... My DH and I just bought our first house a few days ago and our mortgage is about to start...

We can overpay £540 2 weeks before our first overpayment (and thanks to a friend I have a spreadsheet which tracks everything and that one off payment will save me £1238 in interest)!

I am very excited and although my mortgage is due to finish in 32.5 years (apparently we can't afford a 25 year mortgage! HAH!) this one payment potentially shaves off 3 months

Not happy that each September they re-calculate my mortgage and give me lower monthly payments so I officially cannot shorten the mortgage... but in a few years maybe we'll remortgage to a 25 year, then a 20 year, then 15...