new MFW wanabee

13

Replies

  • JonbvnJonbvn Forumite
    5.6K Posts
    Part of the Furniture 1,000 Posts
    ✭✭✭✭
    we took out a mortgage for £160,000 in june 2007 (house was £200,000 but had healthyish deposit) and were on a tracker that tracked 0.5% below the base rate initally this went up but we benefited hugely when it came down this deal ended last week and now have transfer onto SVR which is 3.5% (big jump from the 0.2% we were paying!!). We have been making huge overpayments (the max 10% we were allowed on the 2yr deal) and now are chucking every penny we have at it before taking on a new fixed rate or tracker deal.

    You would have been better off saving the overpayments, given that savings rates are much higher than your previous extremely low mtg rate. When you mortgage changes you could have than made a lump sum overpayment!
    In case you hadn't already worked it out - the entire global financial system is predicated on the assumption that you're an idiot:cool:
  • freebiequenniefreebiequennie Forumite
    1.6K Posts
    1,000 Posts Combo Breaker
    ✭✭✭
    Jonbvn wrote: »
    You would have been better off saving the overpayments, given that savings rates are much higher than your previous extremely low mtg rate. When you mortgage changes you could have than made a lump sum overpayment!


    we already had the max amount in our isas and our other savings accounts only had low interest rates and as our interest was applied daily on mortgage we paid off as we went also makes us feel better when making an overpayment seeing total cost coming down.
  • JonbvnJonbvn Forumite
    5.6K Posts
    Part of the Furniture 1,000 Posts
    ✭✭✭✭
    we already had the max amount in our isas and our other savings accounts only had low interest rates and as our interest was applied daily on mortgage we paid off as we went also makes us feel better when making an overpayment seeing total cost coming down.

    Interest on all mortgages is calculated daily and applied monthly, like a lot of savings accounts.:confused:

    You should have shopped around for better savings accounts, which is the whole raison d'etre for MSE.:money:

    BTW, I am not having a go at you personally. I just want to outline the basic fact that from a purely financial persepective overpaying your mortgage when you have an extremely low interest rate generally does not make economic sense.:rolleyes:
    In case you hadn't already worked it out - the entire global financial system is predicated on the assumption that you're an idiot:cool:
  • techno12techno12 Forumite
    670 Posts
    Part of the Furniture 500 Posts Combo Breaker
    ✭✭
    we already had the max amount in our isas and our other savings accounts only had low interest rates and as our interest was applied daily on mortgage we paid off as we went also makes us feel better when making an overpayment seeing total cost coming down.

    I'm similar - on a HSBC lifetime tracker at 0.98% at the moment, in fact I am stuck there due to being 95% LTV or thereabouts, but I still overpay willy nilly (just a simple online banking transaction and the mtg balance reduces instantly which is very gratifying). I know it's better to put that money in a bank account paying 3% but I'm hooked on seeing that balance reduce!
  • freebiequenniefreebiequennie Forumite
    1.6K Posts
    1,000 Posts Combo Breaker
    ✭✭✭
    well we have got ours down to under 75% LTV ratio in the 2 and bit years by over paying.

    initially our interest rate was way above anything on savings account and we only had a very very low rate for last 2mths and we used extra money to pay off a car finance plan we had taken out 2mths before (we only took out finance as saved so much on car by doing so)

    techno12 I am def with you on the good feeling you get seeing mortgage go down much better than any money sitting in a saving account and think this emotional high is worth that.
  • freebiequenniefreebiequennie Forumite
    1.6K Posts
    1,000 Posts Combo Breaker
    ✭✭✭
    well just waiting on approval from hsbc for the new mortgage the amount we want to set our payments at is a little high for their liking but we have proved we can consistently pay that and more with our mortgage statements from halifax so hopefully will be approved as they only allow 20% extra on your monthly payment rather than 10% on overall mortgage which halifax allowed.

    so higher it is more %wise we can overpay as well.

    if they approve it we will have a term of 10yrs which is fab considering we started just over 2yrs ago on a 35yr mortgage!!!!!

    £122,000 left to pay!!!
  • freebiequenniefreebiequennie Forumite
    1.6K Posts
    1,000 Posts Combo Breaker
    ✭✭✭
    added bonus is that if we have the premier account on our joint account we can both take advantage of the benefits which not only inc car breakdown cover, annual hol insurance but also inc 8% in a regular saver (max £250 a month can be saved). husband going to check they still only charge £12 a month for this and not double cox on joint account - bank manager suggested it to him so heres hoping
  • freebiequenniefreebiequennie Forumite
    1.6K Posts
    1,000 Posts Combo Breaker
    ✭✭✭
    Thought I would update this thread 8 months on - yes I got really rubbish at coming on.

    Anyhow we didnt set up a new mortgage and went with our current mortgage on a variable rate as the deal ended and couldnt have worked better for us as can over pay as much as we wanted with no penalties. (reason we didnt go with new mortgage was HSBC wanted to charge us to have house valued as the free valuation service they use made the LTV ratio 72% and needed to be 70% which was all a little too convienent and made us not trust them!!)

    I have done some extra work so we had our luxury holiday in November to the Maldives.

    Since then we have put every penny left over at end of the month to the mortgage plus any extras we have earnt

    and our mortgage now stands at £102,000!!!! we are very very pleased

    we aim to get this under £100,000 in the next 2 months

    we are expecting first baby due end of august so overpayments will be cut back whilst I am on maternity leave as I am the main earner so we are very very pleased with ourselves to have achieved what we have.

    we are keeping an eye on mortgage market and for deals available but once we are under £100,000 are LTV ratio will be 60% so more deals will be available to us.
  • greentgreent Forumite
    10.1K Posts
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    ✭✭✭✭✭
    wow - well done - and congrats on the baby news! :D
    I am the master of my fate; I am the captain of my soul
    Repaid mtge early (orig 11/25) 01/09 £124616 01/11 £89873 01/13 £52546 01/15 £12133 07/15 £NIL
    Net sales 2022: £12.16
  • gallygirlgallygirl Forumite
    17.2K Posts
    Part of the Furniture 10,000 Posts Name Dropper Mortgage-free Glee!
    ✭✭✭✭✭
    Well done, and congrats on bubba :T
    A positive attitude may not solve all your problems, but it will annoy enough people to make it worth the effort
    :) Mortgage Balance = £0 :)
    "Do what others won't early in life so you can do what others can't later in life"
This discussion has been closed.
Latest News and Guides

£10-£50 London theatre tickets

For over 45 shows in January and February

MSE Deal

Join the 1p Savings Challenge 2022!

It should help you save £667.95

MSE Forum