Mortgage Free ASAP

StuartGMC

Looking very good, well done! :T

Mortgage_Reduction_Novice

I liked your year round up and positive thoughts for 2010.

Queen-Bee_2

Thanks for your encouragement, everyone. It seems like a long journey sometimes, and appears to have become a bit of an obsession. But I am loving my new MSE lifestyle

In some ways it's strange, but I'm happier and more at ease with myself now than at any time in the last ten years, even though my professional future's more uncertain than ever... I think that part of this is due to the knowledge I'm building a new area of expertise through my studies and the fact that there's a lot less day-to-day stress.

With hindsight, I'm aghast at the way money used to slip through my fingers. Although I never took it for granted and always worked hard (like doing my own decorating instead of getting someone in to do it for me) - I also thought nothing of splurging in M&S every day or forking out for a £70 pot of moisturizer. :eek:

Now I take pleasure in simple things. I'll still treat myself to a coffee in Cafe Nero - but unless it's a freebie with my loyalty card, it'll be a simple Americano, not a bells and whistles version at twice the price...

I love shopping around to get the best value on my utilities etc, using Topcashback and rootling around for the best rates of return on my savings. I don't miss buying stuff nearly as much as I'd been expecting, and although I yearn for those expensive facials, so many people have told me I look years younger than I used to, maybe I no longer need them as much! :rotfl:

In summary, although I've a clear destination in mind, I'm discovering the journey isn't so bad either.
QB

Queen-Bee_2

Until now, my mortgage payments have come out of my account at the end of the month. Once I realized my interest charges were being calculated on a daily basis however, I started looking at them more closely. Currently, they’re in the region of £7.40 per day.

This started me thinking about the fact that because my monthly payment is made at the end of the month, I’m incurring the interest charges on this payment for the first 29 or 30 days. In my instance, entirely unnecessarily.

Nationwide has agreed to bring my payment date forward to the start of the month instead, so as of February, I’ll be paying on the 2nd, rather than the 30th. Just for this month I’ve made an early, manual payment – in fact, I did it on-line about ten minutes ago.

Of course, now I can’t rest until I’ve quantified my savings. Tentatively, I have calculated that given my annual fixed 4.59% interest rate, paying £4k earlier each month should save me about £15 in interest over the course of each month. Now maths isn’t my strong point, but could someone tell me if that’s right? If so, it means that by paying this month’s installment 15 days early, I have saved about £7.50.

I don’t think these savings have any cumulative benefits – presumably not, because they aren’t overpayments as such, I’m just making them a bit earlier than they would normally be due…?
QB

setmefree2

Queen-Bee wrote: »

or forking out for a £70 pot of moisturizer. :eek:

:eek::eek::eek:

Queen-Bee_2

setmefree2 wrote: »

:eek::eek::eek:

Ahem... yes, well... It was only the once, but it makes my hair stand on end now just thinking about it

weezl74

Queen-Bee wrote: »

Mortgage Installments: the implications of Start vs the End of the Month Payments
Until now, my mortgage payments have come out of my account at the end of the month. Once I realized my interest charges were being calculated on a daily basis however, I started looking at them more closely. Currently, they’re in the region of £7.40 per day.

This started me thinking about the fact that because my monthly payment is made at the end of the month, I’m incurring the interest charges on this payment for the first 29 or 30 days. In my instance, entirely unnecessarily.

Nationwide has agreed to bring my payment date forward to the start of the month instead, so as of February, I’ll be paying on the 2nd, rather than the 30th. Just for this month I’ve made an early, manual payment – in fact, I did it on-line about ten minutes ago.

Of course, now I can’t rest until I’ve quantified my savings. Tentatively, I have calculated that given my annual fixed 4.59% interest rate, paying £4k earlier each month should save me about £15 in interest over the course of each month. Now maths isn’t my strong point, but could someone tell me if that’s right? If so, it means that by paying this month’s installment 15 days early, I have saved about £7.50.

I don’t think these savings have any cumulative benefits – presumably not, because they aren’t overpayments as such, I’m just making them a bit earlier than they would normally be due…?
QB

Hiya QB, I've only just twigged this myself, D'oh, but better late than never.

There is a saving, but it's a little less than you're saying, cos it's the interest saved on the amount of capital you've paid off, rather than your whole daily interest for 15 days IYSWIM? £15 is the amount that your whole mortgage costs you in interest each month. By paying a little chunk earlier, you have saved, but only the interest on: original mortgage-mortgage after this months payment goes out x interest rate / 15 days

Is that any help or is it all gobbledegook?!

xxx

Queen-Bee_2

Thanks Weezl74, I thought I'd got my head round the principle of this.

Currently, my mortgage costs me between £207-210 per month in interest on the £55k remaining @ 4.59%. From that, I worked out that the daily interest on the £4k I'm due to pay off would be around 50p, which over 30 days would amount to £15. By paying it 30 days earlier, I'd be saving that £15, wouldn't I?

I'm not confident with my maths, so this really is an open question!
QB

weezl74

Queen-Bee wrote: »

Thanks Weezl74, I thought I'd got my head round the principle of this.

Currently, my mortgage costs me between £207-210 per month in interest on the £55k remaining @ 4.59%. From that, I worked out that the daily interest on the £4k I'm due to pay off would be around 50p, which over 30 days would amount to £15. By paying it 30 days earlier, I'd be saving that £15, wouldn't I?

I'm not confident with my maths, so this really is an open question!
QB

:doh:D'oh, no it's me who was wrong, I'm sorry


You have indeedy saved £15 by paying early and I shall be quiet now:
:silenced:

Weezl x

Queen-Bee_2

No, it's quite OK - I am not confident with figures so it's entirely possible I could have made a mistake!! It's nice to know people read my diary - your own is an inspiration, as well as being a jolly good read.
QB