Hypno's "no more boom or bust" diary

hypno06

I consider ours to all be joint - we have been together since I was 15, have both always worked full time, and have both benefitted from each other's income and from the spending.....

So all our debts/mortgage/income is considered "ours".

I earn twice what OH does, but he works more hours than I do - so it would be unfair to divide things by who earns what, who spends what, and who owes what.

But I know that we are in the minority!

macgirl

Maybe I didn't explain that clearly...
I'm not concerned with who earns/owes what...I'm very much a "Live and let live" type anyway...
But do you agree with concentrating all your efforts on reducing your personal debt before the mortgage debt - as you have already started over-paying - or will you attack it all together?

Seaxwyn

macgirl, I see all our debts as joint too, as we are jointly affected by them, never mind who incurred them.

And I see the mortgage as just one of the debts, albeit the biggest. So I aim to pay the debts off in interest order, so once I've paid off the higher interest debts, will look at overpaying the mortgage before overpaying the low-rate credit cards.

macgirl

Thanks seaxwyn
I know that separate vs joint finances would cause some controversy, as I know most are in one pot... But I was just interested in those with debts and also trying to pay off the mortgage too....thanks

hypno06

While we had debts on high APRs such as 24.9%, 18.9% etc, we put the mortgage on interest only as it was at 4.9% and forgot about it, just concentrating on the non mortgage debt.

Now that the non mortgage debt is on much lower APRs, it became time to think of it all as one. for example, my secured loan is on the variable mortgage rate, which is actually less APR than my fixed rate mortgage - so it makes more sense to overpay the mortgage rather than worry too much about the secured loan!

So now I consider it all "debt" - and it doesn't matter which gets paid first/most as long a it goes towards the debt in some way!

Hope that helps!

macgirl

Yes it does, as that's how I think!
None of my debts are on high APR at the moment, so the mortgage is equal in my eyes. Yet, I always feel like a silly little girl (I wish) when posting away from the DFW boards.
Thanks x

hypno06

In fact........

My 0% card is obviously costing nothing in interest. Provided of course that the balance is cleared by the end of the promo period, when it will then cost me 18% ish in interest on anything outstanding.

My barclayloan is at 8.6% but is only over 2 years or so, so the total interest charge is a few hundred pounds, max.

Whereas my mortgage/secured loan run for 19 more years, so the true cost of the borrowing is much higher as it runs into thousands not hundreds due to the length of the loan.

So, for example, £1000 paid off the barclayloan (assuming I could overpay, which I can't) would save me less than paying £1000 off the mortgage.........

So perhaps I should concentrate on paying the 0% to be sure I won't be subject to high APRs on there in the future, then concentrate on my mortgage, letting the barclayloan look after itself in its natural lifespan.

Whaddya think........

Double_Trouble

hypno06 wrote: »

In fact........

My 0% card is obviously costing nothing in interest. Provided of course that the balance is cleared by the end of the promo period, when it will then cost me 18% ish in interest on anything outstanding.

My barclayloan is at 8.6% but is only over 2 years or so, so the total interest charge is a few hundred pounds, max.

Whereas my mortgage/secured loan run for 19 more years, so the true cost of the borrowing is much higher as it runs into thousands not hundreds due to the length of the loan.

So, for example, £1000 paid off the barclayloan (assuming I could overpay, which I can't) would save me less than paying £1000 off the mortgage.........

So perhaps I should concentrate on paying the 0% to be sure I won't be subject to high APRs on there in the future, then concentrate on my mortgage, letting the barclayloan look after itself in its natural lifespan.

Whaddya think........

I think my head hurts

That sounds right but why then does everyone say you should pay off high interest rates first never any mention of the length of loan. Have you put it in a snowball to test it out?

DTxx

hypno06

OK, so having played around a bit with the snowball calculator, I have come to the conclusion that I will continue throwing all the odds and ends of money at the 0% card to get that cleared and eliminate the risk of a high APR if I wasn't able to transfer it to another 0% card......

Then when that is gone, I will concentrate on the mortgage, on the basis that the barclayloan is fixed, but mortgage rates can and probably will increase at some point......so the more I pay off, the less it will hurt me if rates increase........

And overall, the amount of debt reduces at a reasonable rate, and I can be rid of the whole lot, including the mortgage (dream house moves aside for a moment) in less than 10 years

It may therefore require a little signature tweaking........

macgirl

hypno06 wrote: »

In fact........

My 0% card is obviously costing nothing in interest. Provided of course that the balance is cleared by the end of the promo period, when it will then cost me 18% ish in interest on anything outstanding.

My barclayloan is at 8.6% but is only over 2 years or so, so the total interest charge is a few hundred pounds, max.

Whereas my mortgage/secured loan run for 19 more years, so the true cost of the borrowing is much higher as it runs into thousands not hundreds due to the length of the loan.

So, for example, £1000 paid off the barclayloan (assuming I could overpay, which I can't) would save me less than paying £1000 off the mortgage.........

So perhaps I should concentrate on paying the 0% to be sure I won't be subject to high APRs on there in the future, then concentrate on my mortgage, letting the barclayloan look after itself in its natural lifespan.

Whaddya think........

Exactly

Double_Trouble wrote: »

I think my head hurts

That sounds right but why then does everyone say you should pay off high interest rates first never any mention of the length of loan. Have you put it in a snowball to test it out?

DTxx

Mine too!
I'd trust the numerical brain of a Stockbroker more than me - I'm Arts not Sciences. But in my simple mind, it would seem that if the mortgage interest rate is similar to the debt rate, but over a longer term (ie 5-8%), then surely it's relative

Anyway, Location is on - love Kirstie and Phil (even though it is a repeat)