Mortgage FREE by 2018

setmefree2

an Good Luck

dimbo61

well done on changing from IO to repayment and I hope you have no problems making the new monthly payment.
What you need to ask now is can you make any overpayments on top without the 2% charge ! Good Luck

justinj

Hello everyone just had a letter from the mortgage company today informing me :
My account is operating on product RSI- 6.99% fixed until October 2011.

I will incur a 2.00% Early repayment charge for any overpayments made until October 2011.

They have amended my account so that they have charged me 2.00% of Early Repayment charges of £10.00 for the Capital Repayment made of £500.00 on the 13th January 2010.

What should I do shall I keep overpaying or save until october 2011? Your help very much needed.

setmefree2

Have a look at the savings board and see what the highest interest rate you can get is....

blueberrypie

justinj wrote: »

Hello everyone just had a letter from the mortgage company today informing me :
My account is operating on product RSI- 6.99% fixed until October 2011.

I will incur a 2.00% Early repayment charge for any overpayments made until October 2011.

They have amended my account so that they have charged me 2.00% of Early Repayment charges of £10.00 for the Capital Repayment made of £500.00 on the 13th January 2010.

What should I do shall I keep overpaying or save until october 2011? Your help very much needed.

You could look into reducing the term of your mortgage - some lenders allow you to do this with no charge. That would effectively commit you to paying more each month though, so if you aren't sure you can overpay by that amount, don't do it.

Otherwise, look for the best savings rate you can get. Savings rates aren't great at the minute, but don't dismiss current accounts like the Lloyds Vantage, which pays up to 4%, depending on balance. (That's equivalent to about 3.2% after income tax is deducted, assuming you're a basic rate taxpayer, but it's better than a lot of savings accounts are offering right now.)

DJ_Mike

Hey! Just spotted your thread! You and I have a similar end target - I'm hoping to have my mortgage fully paid off by 2018 as well! (Although right now I'm focussing on reducing it to 50% LTV by 2013)

It's a good goal to have, and I really wish you all the best in getting there - here's hoping interest rates will be friendly to us in years to come, eh?

Since you're on a rate of 6.99% right now, there is NO savings account that is going to beat that. Short of risking your money on stocks (not something I'd advise), the best thing you could possibly do is maximise on that £500 a month you're allowed to overpay by.

What you overpay now is far more important than what you overpay later. Every month that your debt sits there is another month the bank can charge you for it, so get rid of as much as possible now and you'll reap the benefit later.

The best way to think of your mortgage is as a tax-free savings account - ignore, for a moment, that the bank is taking money off you, and think of what would happen if you invested £500 in a 6.99% savings account right now, leaving it there till July 2011 - 18 months away if I'm not mistaken.

In 18 months that £500 will have matured to £544.17 - that extra £44.17 is almost exactly what you'll save in mortgage interest if you overpay £500 this month.

If you keep overpaying £500 a month for the next 18 months, not only will you have paid off £9,000 of your mortgage, but you'll have saved yourself around £390 in interest too!

justinj

Thanking you all for your help, I will keep you all updated with my progress

justinj

Managed to overpay £325 today with the 2% taken off £318.15 will be coming off the mortgage:T

setmefree2

well done:D

justinj

Found just over £500 in an account, that wasn't doing anything so i've paid it off the mortgage today. Going to la tasca with my better half tonight to celebrate (armed with my 50% off voucher of course)!