pammyj74's MFW diary (or possible wishful thinking!!)

pammyj74

Not sure if I am looking at things correctly but have just done the halifax mortgage calculator as mine will be due for renewal end of Jan
Anyway I was trying to work out how many years I could knock off when i remortgage if i went with them still and working it out that i will have approx £83K left. On there current apr of 4% to pay just over £630 a month I could take my term down to 15 years, possibly even 14!!
I cant see that being right? am i doing something wrong. At the moment i will have 20 years left

If I could do this, that would be amazing! How early can I apply, i think i read it could be 3 months before its due?

wantabetterlife

Hi Pammy, well done on the o/p. Cars are such a pain:mad: . I am with the halifax also. If you want to get a new deal with them you can apply 3 months before to secure one. If im reading your post correctly you want to go onto the SVR - this will happen automatically when your deal expires. They must have put their SVR up, as it was 3.5% for a long time. I decided to go for a three year fix at 4.99 because i didnt want to take the risk with interest rates going up. If your shortening your term just make sure you can afford any increase in payments if the interest rates start going up as this will affect the halifax's SVR. Hope that helps and goodluck.

WABL

pammyj74

pammyj74 wrote: »

Have set up an OP of £300 to come off on the 1st, would have been more but my car MOT failed £600 down the drain

so expected total should now be £83,732.33
total OP to date £3100
total interest saved over £4000
EMFD December 2029 (one extra month off totalling 15 months deducted)

Didnt expect to be able to pay that much off this month with everything else that been going on (xmas etc) so pleased I still could.
Might be nothing next month tho lol

online total today is £83,677.75 so £54.58 difference so the £60 odd that was different last month is catching up

So if i do nothing with the halifax it will just carry on with their SVR but I want to reduce the term and carry on paying the same amount I am paying now.

wantabetterlife

Hi pammy, dont know if you do internet banking but it would be useful for you if you wanted to keep your payments the same as they are now. I phoned the halifax and asked for the account details to make overpayments online and then set this up with my bank (bank of ireland). This would mean that when your mortgage changes to the svr you could make an online overpayment to keep it at the same amount, effectively reducing your mortgae term. Alternatively you could phone them up and reduce your mortgage term so that the amount you are paying remains the same. I have done this once before with the halifax and got charged £10. Sorry if thats a bit confusing.

WABL

pammyj74

Yes I do overpayments online, and have rang the halifax last week. They say there is no charge to reduce he term? I would rather reduce the term then pay extra overpayments but this is purely for the mentality of it all. I can physically say that I have 15 years left.
It might mean that if the rates go up I might have to put the terms back up.

Although I have just had a thought, would I pay less in interest if I reduced the term,
ie if i left the term at 20 years and my payments were £481 (not sure how much the interest would be in that amount) and overpay £110 to mke it up to £600
my thinking is the £110 does not have the interest including in that so I am paying more off the capital

BUT I have thought if the term in reduced to 15 years and the payments are £593 then the overall interest saved would be over the whole mortgage but this payment has more interest included.
Looking on the guardian mortgage calculator it says the interest over

20 years would be 32,528.80
15 years would be 23,803.00

a saving of £8725.80 over the 15 years which divided by 180 months is £48 a month

Obviously the rate wont stay the same for the 15 years and other OPs will change aswell but this is just a comparison.

What do people think? should i leave the term the same and OP or reduce the term?

pammyj74

Am wondering about what to do with my mortgage payments.
On the understanding that I can OP £600 over the next 3 months my balance will be £82500
On looking at mort calc if the rate is 3.5%
over 15 years term my payments will be £589.78 interest paid 23,660.40
over 14 years term my payments will be £621.87 interest paid 21,974.16
over 13 years term my payments will be £659.01 interest paid 20,305.56

I currently pay £600 a month with on average £200 OP total £800 a month

now I know that the OPs are flexible and I can pay what I want as and when I can afford it but seeing the term go down drastically like that makes me more determined to do it.

I have also looked at if the rate goes up to 5% over 13 years payment would be £720.27
I really want to put the term down to 13 years but not sure whether it is wise or not? Obviously if I leave it at 15 then I can OP as much as I have been and the term will still get reduced that way so I have that to cushion on should I not be able to OP that month. BUT putting the term down will MAKE me pay that amount each month.
If i stay at 20 years the interest paid would be 32,332.80 so reducing it to 13 would save 12027.24 :eek:

what are your thoughts you clever people?

SmlSave

what are your thoughts you clever people?

I'm afraid I'm not of these :rolleyes: but I'd go for the 14 year term as you've saved yourself a considerable amount of interest and it gives you that little extra to be flexible with

pammyj74

thanks smlsave, a colleague of mine has actually said to leave it at 20 in case the rate rises too much for me to afford
I keep changing my mind all the time. I really dont kow what to do for the best!

pammyj74

also does anyone know if you ask to reduce the term do you have to pay a fee to do this with the halifax?

Ladyshopper

Hi Pammy. Yes its me from PTS!! I'm with Halifax, and after making a big overpayment at the beginning of the year when I cashed in my endowment, I reduced the term on their advice, and there was no fee to pay.

My product has now come to an end as of 1st Dec, so payments will be going up as I was a minute interest rate thanks to a fab tracker. I'm going to ride out the SVR for a while and see what happens.

I can make another overpayment from 1st December, as was only allowed to do 10% before I got charged, but once the product finishes you can overpay as much as you like on the SVR.

I would like to reduce my term again, but am like you in that there is the worry of affording the payments when interest rates go up again. Will get some quotes like you have I think, and decide what to do.

Anyway, just thought I'd say hello and let you know I've been reading your diary, very inspirational, as are all of them on here. Really ought to do one of my own I suppose!