Do you admit to overpaying?

Tesco_points_addict

I don't think the majority of people even realise you can overpay!

StuartGMC

Pee wrote: »

It really worries me as their is a very nice young girl at work, only earning minimum wage and her boyfriend earning a bit more than that, they are so pleased the rate has come down as they were struggling to pay a £1,000 a month... I wouldn't or couldn't pay that a month and I am earning twice what they are. I have tried to tell her that interest rates can go up again... that is the bit that worries me and so any overpayment at the very worst is a cushion for if and when times get hard.

Yes, have to agree people may be lulled into false sense of affordability if they are struggling now; we started out in 1994 with 8% mortgage rates, quotes at 10% and we also asked for 13% as that was a typical rate for preceding 20yrs or so. We checked we could afford these on the assumption of 0% pay rises. When rates dropped I recall a colleague thinking of moving up the chain who said as long as rates don't increase more than 0.5% I'll be fine - I talked her round from that.

Rates fell very rapidly, they can rise just as fast!

ironman1

I would only tell people that wouldn't judge or ask too many questions!

I've only just really heard about overpayments. In the space of 6/7 months we've gone from wanting to pay back as little as possible per month to as much as possible. I feel like we've 'wasted' the previous months by not overpaying a single penny

littlemrtinkle

shmw i think everyone feels like that, but at least you've had the eureka moment, most people haven't. :-)

linni

I have overpaid so much that I have almost paid it off. It is addictive once you start and although I will want to shout it from the rooftop, I will keep quiet because people think you are better off than them, even though we don't earn much, we don't have holidays or rarely have any luxuries, we just live within our means.

bootman

Well we had been paying the maximum overpayment every month since taking out the mortgage until December just gone.

We have got it down to one year left, so it is now running it's course with no extra overpayments. I can get a much better rate in the savings account, and with the job uncertainty I needed to build up a bit of a reserve just in case.

The people who 'get it' seem to be the ones willing to use coupons, use cashback sites save a bit by shopping around.

Most of my friends just say I am so lucky, but instead of being down the pub wasting money I am on here saving it!

MoneyQueen

I have in the past spoken to friends about OP the mortgage or MSE in general but it is such an alien concept for most people our age. So now I just don't bother and pretend that we are as "normal" as they are

DragonLady

I have mentioned it to some friends and they tend to look aghast and make comments such as 'how can you afford that?' but we live a fairly basic (but good) life.

My OH and I have good jobs, thankfully. We aren't interested in a lot of the stuff that my friends seem to spend their money on (clothes, lots of entertainment) and we don't have kids. We have also both been really sensible with money and don't have debt on credit cards etc.

I have tended to use my commission (as I have a sales job) to make overpayments on the mortgage, so since January 09 we have been able to pay off £14k. I know that is a very luxurious position to be in, but we have our house on the market at the moment as we want to move a few miles out of town and find somewhere with a few acres. That is going to cost, so whilst we are making overpayments, this is more with a view to reducing our mortgage to get somewhere with land (which doesn't appear to be affected by the credit crunch!) rather than making us mortgage free. Of course when we move, money allowing, we will continue to overpay. We are down to £112k now and fingers crossed we can get it down to 5 figures this year.

bluffer

StuartGMC wrote: »

Yes, have to agree people may be lulled into false sense of affordability if they are struggling now; we started out in 1994 with 8% mortgage rates, quotes at 10% and we also asked for 13% as that was a typical rate for preceding 20yrs or so. We checked we could afford these on the assumption of 0% pay rises. When rates dropped I recall a colleague thinking of moving up the chain who said as long as rates don't increase more than 0.5% I'll be fine - I talked her round from that.

Rates fell very rapidly, they can rise just as fast!

i remember when we were in the ERM and it was black ( monday?) and rates rose 5% in one day. i just cannot believe people want to commit 60% of their income to their mortgage. maybe i am lucky because i bought at the right time, am careful with money but i always have been conservative with money.

- i have an aberdonian jewish mother (joke) who brought me up in the proper way , i always buy in sales and/or look for a bargain

tomstickland

I worked out the other day that I could save £40K in interest if I overpayed by a reasonable amount per month. That's £40K I could use for something else.