Just made a 2k overpayment..

techno12

It's a lovely feeling!

I'm still in my first flat, had it for 3 years now, and probably bordering on negative equity, as I got a 95% mortgage for £148k. Was on a 2-year fixed with Intelligent Finance but wisely moved from them when the fix ended to HSBC's lifetime tracker at 0.48% above BOE.

So as the rates have gone down, I've been doubly up on the deal. My monthly payments have gone down, and the amount I'm reducing from the balance has increased (ah the joys of amortisation!). When the base rate went to 0.5% I went online and told them to up my regular payment from £680 to £1100.

I've been a bit frugal this year (deliberate New Year's Resolution to be a skinflint for 6 months) so having been to the pub this evening, got back, logged on and seen what's in my current account, I've just clicked another 2k off the balance (now £133k) never to be seen again!

The thing is, I know I could have done better by putting that 2k into a higher-paying account (~3% or so). But I like to log onto HSBC and see that balance go down. I'm one of those who's never ever been in debt, I've never used my overdraft, always pay off CC etc, and I really hate this millstone of a mortgage!

Sorry, I'm just rambling!

dial8d

fair play to you.

Going to put a fat cheque in the post next week too, to the tune of 1500 sobs !

Im like an impatient child waiting for the postman to deliver my letter from Abbey confirming my new balance.

littlemrtinkle

well done :-) Makes my £300 pale into insignifance .

ironman1

May sound a silly question, but say I was to pay off £2k in a lump off my mortgage, how much would actually come off it if it's to be paid over 40 years at 6.2%?

I mean since we moved in last year we have not overpaid once, because we own half and have to pay enough as it is on the rent and maintenance side of it! and as we didnt even think about it (now have a standing order for £100 extra a month plus going to try to pay another 50-100 on top of that) and from the original 87,000 we owed, that is now down to er... 86,950.

Obviously all to do with the interest and so on. So back to the question, from 86,950, if we were to pay off 2 grand in one hit what would that take it down to?

Sorry for the silly question but this is our first mortgage and so on...

techno12

86,950 would become 84,950

I know this, as my remaining balance of 134509.42 became 132509.42 within 1 minute of me clicking on my Barclays account to do the transfer. I was surprised it went through that quickly..

You'll find a lot of people on here are obsessed with the remaining term on their mortgage, trying to get their provider to 'reduce the term' but that's not a good move at all, as all that does is retain the amount you're obliged to pay each month. I'm perfectly happy keeping my term at 20 years and overpaying, as if I lose my job or something the amount I'll have to find each month will have been reduced due to my overpayments.

The *only* thing that should matter is how much you owe at a given time, ie the outstanding balance. The term is irrelevant. So forget the 40 years thing, all that matters is that you'd owe 2k less...

techno12

dial8d wrote: »

fair play to you.

Going to put a fat cheque in the post next week too, to the tune of 1500 sobs !

Im like an impatient child waiting for the postman to deliver my letter from Abbey confirming my new balance.

Hehe!

Surprised that in 2009 Abbey don't let you do it online, I really can't remember the last time I wrote a cheque for anything! It's been many many years...

I wouldn't say 'fair play' as I still feel trapped. Having rented for 10+ years before buying (due to me being sick of not being able to paint the walls etc, and dodgy landlords!) - I'm kinda stuck if I need to move, hence my manic trying to chip away at the balance to get back into positive equity...

RosieTiger

Most of the building societies don't let you do it on line - me thinks they would prefer you not to look and just carry on paying for the full term !

techno12

RosieTiger wrote: »

Most of the building societies don't let you do it on line - me thinks they would prefer you not to look and just carry on paying for the full term !

Lol how primitive! I didn't know that... one reason to stick with the mainstream banks rather than the Mickey Mouse building societies then perhaps ;-)

dial8d

techno12 wrote: »

Hehe!

Surprised that in 2009 Abbey don't let you do it online, I really can't remember the last time I wrote a cheque for anything! It's been many many years...

..

Its the only reason I have a cheque book to be honest. I dont really know why they insist on capital overpayments to be made in the form of a cheque, when i could easily do it online in seconds.

My cynical side suspects they dont really want us punters paying off the mortgage early.

ironman1

Techno, thanks mate thats great. We have about 5-7k in savings and apart from spending some on a holiday and my football season ticket we're gonna use at least 2/3k for a big mortgage overpayment.

It's strange, when you go to the mortgage advisor you start panicing, 'can we afford that, we wont be able to do this'... in the end we probably talked ourselves and the MA into the 40 year term. It sounded good 'only' having to pay back 510 on top of the rent and maintenance. Now we just want to chip away at it as often as possible.

As you said it's better to keep it, for us anyway' at a long 40 year term for now as at least if we CANT afford to overpay say at Christmas, we don't have to.

I can't belive how much this site and the posters on it have helped in terms of mortgage/savings/utility bills. It's done us a big favour! Only worry is getting too carried away with this saving lark...

techno12

Yup it seems like you're locked into a '40 year term' or whatever when you sign up, but that's not the case at all. When I took out mine it was a 29.8 year term, but after 2 years I remortgaged and reduced it in a snip to a 20 year term (by saying "I want the term to go down to 20 years" and paying £200 or so more a month).

Although ideally I should have left it at 27.8 years and overpaid (to keep the amount I'm obliged to pay as low as possible).

This site is great, I only discovered it recently.

PS If you want guaranteed cash for zero risk, check out the 'Gambling Loopholes' forum - matched betting. I've just finished my first stint and made £620 clear profit in 2 months. An absolute doddle and anyone with half a brain can do it (basically you take advantage of the 'free bets' that bookies give you, so it only lasts for so long - I've run out of ones to join for now..) ;0