Another newbie MFW!

Lady_Tara

Hi, I'm another MFW newbie, been lurking on this forum for a couple of years!

We have £136,000 mortgage over 22 years, which started in May this year after we moved house (last time for a while!) and reduced the mortgage from £170k. We are on a BoE tracker of base + 0.99 so at the moment we're paying 1.49% (better than the 4.64 we were on for the last 3 years!).

I'd like to try and be mortgage free by 50 which gives me 10 years to chip away! So far we have made 2 capital repayments, each time £500 and we are planning to do that every month while the mortgage rate stays low.

I just wondered if anyone knows how I can work out the impact of these overpayments? I have looked at some of the calculators but its a bit beyond my level of understanding! I can see that if we overpaid the same amount every month and the mortgage rate stayed the same (!) we would get the mortgage paid in around 10 years. But I'd really like to see the approximate figures month by month and I've not been able to find how to do that?

We've hopefully not got any major spends coming up, we've got enough "emergency" cash for job losses, house/car repairs, etc, and no major life changes planned (family is complete!) so we are expecting to be able to continue with the overpayments for the forseeable future.

Thank you

alfiesmum

Try this calculator, and press the second button to show amortization. It's a fab site!
http://www.bankrate.com/calculators/mortgages/mortgage-calculator.aspx

It will show you each month what your balance is after payment.

It's in dollars, but that makes no difference at all - ciould be carrots, the figures are still the same!

dimbo61

Hi lady Tara
If you are only paying 1.49% on the mortgage make sure you are also filling a cash ISA each as most paying 3%plus TAX free.

Lady_Tara

Thanks for your replies - no we're not filling any ISAs at the moment - I'm not very organised and at the moment all our additional savings are sitting in a post office account (something like 2%) and a savings account linked to the current account with is paying next to nothing. I use those accounts to pay for car insurance, road tax, house insurance, holidays so I do need to be able to access it quite frequently...

dimbo61

I have an offset mortgage so every spare penny is kept in the offset savings accounts until I need to pay the bills.
Just an Idea for the future.
Do try and build up an emergency savings pot in ISA,s of 3/6/9 months of income just in case ( and earn more interest than you pay on the same amount of mortgage !)

Lady_Tara

Thanks, my emergency savings are in an ISA, its just the rest of the savings that are spread around accounts paying rubbish amounts! Yes we'd like to go for an offset mortgage but for now we'll stay on the repayment one we've got. Thanks

Lady_Tara

Managed another overpayment yesterday of £700! I've just read the complete tightwad gazette and its really inspired me!:j

Jonbvn

Tara,

I would advise that given your low mortgage rate, it is much better to save your money, rather than overpay your mortgage.

You can easily get 3%+ in a cash ISA. Furthermore, the amount you can save in an ISA will increase to GBP5.1k from April 2010.

setmefree2

Lady_Tara wrote: »

Managed another overpayment yesterday of £700!

well done on that :T:T:T:T

MoneyQueen

Hi Lady Tara,

Welcome to MFW Board and good luck with OPs.

Since you are only paying 1.49% on your mortgage, Have you thought of savings in Regular Saving accounts when you have exhausted Cash ISAs

They generally pay upto 6% atm

MQ

Lady_Tara

Thanks for your replies, we weren't sure if it was better to overpay or save. At the moment we've got £250 a month going into a fixed 6% reg saver, that finishes next month as you could only do it for a year, so we have got around £750 we can overpay every month + any overtime. We've got enough in our emergency funds for all eventualities, so really want to overpay/save rather than "fritter" the spare cash.... I will have a look at what savings rates I can find. Thank you :beer: