bungrefurbs mortgage free journey

bungrefurb

Hi all........some background first. I am a mum of two lovely girls aged nearly 4 and 4months. Currently on mat leave till September 2010.

We moved to our current property in Jan 2006 and took out a mortgage of £288k for 25years. It is currently fixed until mar 2011 at a rate of 5.63%. We can overpay by 10% per year. And interest is calculated daily.

Over the last 18months we have managed to reduce the amount we are owing to £235k. We have reduced the term to 9years by increasing the payments substantially. I would ideally like for us to be mortgage free in 5years.

Any words of wisdom, encouragement, thoughts etc would be much appreciated. I would like to have some way of recording the amount of interest saved to date......can someone point me in the right direction please.

bungrefurb x

deefadog

Hi, looks like you have had one hell of a good start

go here - http://forums.moneysavingexpert.com/showthread.html?t=1157173

This is the best spread sheet!

Good luck!

bungrefurb

thanks deefadog will take a look at the spreadsheet. Yes we have had a good start we both have good jobs and no other debts so i guess are lucky that any spare cash can be put into mortgage.

dimbo61

Well done on clearing £53,000 in under 4 years , thats some going so you must be doing something right.
Have a look at offset mortgages when your current deal ends as unlimited overpayments allowed or just save into the offset account!
Not only have you cleared the £53k but you will also save the interest you would have paid on that money over 25 years!!!
Being MF in 5 years is still a huge ask with 2 young kids and that size of mortgage but you seem to know what you are doing and well on the way.
With the kids at that age holidays in the UK can be more fun than flying half way round the world to hot countries GOOD LUCK

dimbo61

Try "whatsthecost" and put in your mortgage details then press DETAILS on the result to find out how much you should have paid over the last 4 years and how far ahead you are!
Not perfect but will give you an idea
I will be 18 months ahead of my mortgage by xmas

bungrefurb

thanks to financial bliss i have just joined the mortgage free in 3 take 2. Dimbo61....appreciate your input. I know its a big ask with a young family but will give it a go nothing to lose really. I was wondering if it was worth changing it to an ofset now....we are tied in till march 2011, need to check what the penalty is.

dimbo61

I have a fixed offset deal and no way am I paying a 2/3% ERC fee
If you can afford to overpay the mortgage by 10% until March 2011
you will have cleared another big lump of the balance.
first direct seem to have some of the best fixed offsets at the moment
I am with YBS but the rates are not that good.
Save into Regular savers Barclays were doing 6% and HSBC 8% ( need to bank with them)

financialbliss

bungrefurb wrote: »

Any words of wisdom, encouragement, thoughts etc would be much appreciated. I would like to have some way of recording the amount of interest saved to date......can someone point me in the right direction please.

Hi bungrefurb,
Our mortgage is with Nationwide. You just get one total mortgage interest for any one year. However, taking the interest on the last day of the month allows be to calculate payment and interest stats such as this, which I've just posted in my own diary for October:
http://forums.moneysavingexpert.com/showpost.html?p=26451159&postcount=1214

Quite useful IMHO, and over time, you can see the effect that the overpayments are having.

Financial Bliss.

bungrefurb

thanks financial bliss some useful info for me to wade through. I have been reading your diary prior to posting my own and it is partly what inspired me to create a diary!

Hi dimbo61 i think you may have a point re charges. I guess march 2011 is not far so will plod along as we are for now

chirpchirp

Welcome!

Regarding the ERC payment have you calculated how much it will be and how much the savings will be on a lower interest rate between now and March 2011. If the saving is substantial it may well be worth ditching the principle of not paying an ERC.

bungrefurb

thanks chirpchirp i've just calculated the ERC which is 3% of the loan, this works out at a little above 7k. I'm not sure it's a good idea. Does anyone have any thoughts re the above.