Mortgage free in 30 months by the age 30!

edited 29 August 2009 at 3:55PM in Mortgage-Free Wannabe
13 replies 1.8K views
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  • thepearcethepearce Forumite
    2.3K Posts
    Part of the Furniture 1,000 Posts Combo Breaker
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    Nice_guy wrote: »
    Many thanks for the tip thepearce! After a bit of searching I see the basic rate of tax is at 20% on savings. Therefore at 4% the net payable would be 3.2%.

    For example if I put 50k into the above accounts (assuming I could get away with opening this many) I should net £1600 p.a. If I left this 50K offsetting it would have saved me £1495. Meaning I would be £105 in profit.

    For some reason I seem to think it would be better for me to leave the cash offsetting as the gain is not 'that' much. By keeping all the finances in one place I think will help in achieving our goal. This is purely a Psychological reason. But do I need to change my way of thinking as £105 is still £105 more than what I would have had!?!?

    One thing to bear in mind is that you need to have £1,000 a month coming into the Classic with Vantage. An easy way to do this is to set up some payments to & from other accounts. If you both opened a Halifax Reward Current account you could get £5 each every month you pay in £1,000 to that. You don't need to leave the money in for any length of time either.

    You can see where I'm going with this.....

    £7k in your Classic with vantage, pay out £1,000 to each of the two Halifax accounts and then do the reverse shortly after. £105 is now £105+£60+£60 (less the day or so interest perhaps for transfers?)

    Not too sure about the tax treatment of the £5 reward - it's paid in as £5... perhaps higher rate payers should technically pay some (further) tax on this.

    Certainly more "hassle" though of course you could equally just do the Halifax accounts.

    p.s. It is possible to have multiple CwV accounts - and if you can apply/upgrade on the internet it's much easier.
  • UPDATE 1

    Hi everyone,

    This is our first update on how we are getting on in our journey of being MF. I shall try to post at the start of every month with an update of our figures.

    So at the start of Oct our figures read as:-

    Outstanding mortgage: £112,973
    Total offsetting: £78,652 (of which CC money stoozed = £16,953)
    Interest charged on: £34,321
    Total yearly interest: £1,026
    Total monthly interest: £86
    Daily interest: £2.81

    So we have reduced the interest we pay on a daily basis by exactly £1 from our first posted figures. Things are going well enough.

    Nice_guy
  • setmefree2setmefree2 Forumite
    9.1K Posts
    Mortgage-free Glee!
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    _yay__by_Toxic_Fox_Girl.gif well done nice-guy :T
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