Mortgage Reduction Beginner to Novice - The Show Begins

Mortgage_Reduction_Novice

ztan wrote: »

I have had a brief read of some of your posts... sounds like you are really going for it. Especially at the gym!! I am a gym freak so massive respect for hitting it so hard.

Feel free to share your relative saga...

Hi ztan, :wave:

I'm a huge fan of gym classes - for many reasons but mostly because I sleep better once I've worn myself out physically! I had a 4 month gap in membership this summer in a effort to save money and go running outside instead. I didn't enjoy it, didn't run regularly, started not sleeping properly... so I returned on 1st September with a paid upfront annual membership (which you can already see from my signature will more than pay for itself over 12 months!!!)

TallGirl

Totally justified karma on the relative and the SIL I have only got one and she lives in South Africa and is actually ok.

4 gym classes in a week that is good put my 3 to shame really.

I agree running is ok in Summer but not sure I would fancy it now.

Mortgage_Reduction_Novice

To the positives:

• Another £10 Amazon voucher from VO (going towards MrMRN's Christmas present).
• The large credit card bill has been paid and I should still have £100ish left at the end of Oct to put into savings.
• I have set up a standing order for £25 per month into my ISA (but I do top up with MS money too).
• Union is balloting for strike action - 1% payrise due in January has been rejected.
• Visiting relative finally opened wallet at the weekend and has been more careful about how he treats our house/furniture. He was also overjoyed that I changed his sheets and towels and gave the parts of the floor/surfaces I could get at a hoover and dust. Now I feel like he has appreciated his stay with us. Just 3 more sleeps (although I have a fast turn around because I have other guests at the weekend!) so lets call it 5 sleeps till me and MrMRN can have our house back to ourselves again.
• A quick clothing mystery shop at the weekend - I confess to using all the reimbursement and fee plus £4 to buy a dress. Still £4 for a nice dress is a bargain!
• Free lunch at work yesterday and pack-up of leftover fajita today!

And with positives like those the negatives are insignificant!

Tilly_MFW_in_6_YRS

Hi MRN, if you're running a B&B I can always book for a weekend break :)

Sounds like you have your house guest tamed, and hope youndnt need to break the next one in.

Fajitas for lunch sounds fab. I sadly had a jam roll :rotfl: DS finished the ham, DD finished the cheese and no-one thought to take more out of the freezer - that must be the freezer fairy's job.

Tilly x

Mortgage_Reduction_Novice

Another £15 mystery shopping money appeared in my bank account today.

And visiting relative has been dispatched to SIL's for 24 hours!

misscousinitt

Your SIL sounds like a pain...hope she stops mouthing off about you now.

MCI

Mortgage_Reduction_Novice

Tilly_MFW_in_6_YRS wrote: »

Hi MRN, if you're running a B&B I can always book for a weekend break :)

Tilly you are always welcome. Bring lodgers and their OPs too!!!

misscousinitt wrote: »

Your SIL sounds like a pain

Yep a pain in the bum. She was nice as pie to me last weekend! There's still time for me to cancel the booking for her non-surprise birthday.

edinburgher

MRN - can I ask a question re. your SL? Was it the income-dependant sort, like mine (i.e. anything over £x, they take 9%)?

I like your idea of paying it off for an increase in takehome salary, but couldn't figure out how this worked out better than just putting the money in savings (I think my current SL interest rate is 1.5%)

Mortgage_Reduction_Novice

edinburgher wrote: »

MRN - can I ask a question re. your SL? Was it the income-dependant sort, like mine (i.e. anything over £x, they take 9%)?

I like your idea of paying it off for an increase in takehome salary, but couldn't figure out how this worked out better than just putting the money in savings (I think my current SL interest rate is 1.5%)

Hi edinburgher,

I have a post 1998/pre 2012 student loan like you, which has a 1.5% interest rate this academic year. You are right the general guidance is to save rather than repay student loans (unlike mortgages!). But the following thoughts have swayed me:

I lived frugally as a student and saved manically too so that I was able to voluntarily repay half of my student loan soon after graduating. Massively cutting the interest I would have gained while doing a PhD and beyond.

A few years ago when the rate was up at 4% it was better to repay and that's when I started my spreadsheet and occasional voluntary overpayments. I also do mystery shopping which, through self-assessments, repays extra on top of my regular job to my student loan annually.

The threshold now increases each year - it used to be 9% of anything over £15,000 but is currently anything over £15,795 and in April will be anything over £16,365. This means that we're paying back less per month compared to previous years but our complete repayment will take longer and during that time we're paying more interest (yes our government are conning extra money out of us and saying it's for our benefit through increased disposable income - how would you feel if a regular loan provider did this?!). So I vowed to repay the £71.55 this year and £51.30 from April that the government would rather I have as disposable income... this stops the time I take to repay through my salary from being extended.

Partly psychological - I want the money in my bank account to do with as I please instead of taken at source.

Last point - it's still a loan so wiping earlier means I save the loan interest and can put the monthly pay rise straight into savings to gain interest.

Don't forget to switch onto direct debit student loan repayments once you have less than 2 years left (this will be my situation in a few months). This ensures that you don't overpay - even though your pay slip looks like you repay monthly... actually this is a lump sum once a year so overpaying for months has been a problem in previous years and the student loans company came under flack for not returning this overpayment quickly enough.

edinburgher

That's a very detailed answer and your reasoning works very well in your circumstances

For those of us who spent like drunken sailors as students and have £££££ loans, it wouldn't work so well. My £13.5k loan will be taking quite a long time to pay off regardless of how I tackle it! I suppose the one thing that your approach maybe doesn't address is the fact that (in theory) we get wage rises - so while the initial payment threshold creeps up, our salaries should as well. It would be interesting to track how my wage has risen vs. the threshold - time for a spreadsheet!

Never mind the difference between saving and SLs - have you compared the interest saved vs the interest you'd save OPing? As OPs are made at real rates (post-tax income), I can't bring myself to OP the SL.