Mortgage Free Newbie!!

Button21

Hi all,

Here is a little background info about me.....

I am married with two young children, and currently have a mortgage of just under £130K made up of.......

£44K at 0.5% (colleague deal which tracks base rate)
£86K at 1.19% above base rate

My monthly payment is approx £140 interest only.

I can overpay any amount, at any time. My mortgage is interest only at present and I hope (??) I am doing the right thing by paying the difference into a 3% (less tax) savings account??

I have just looked at Martins Mortgage Calculator and is this referring to overpayments, rather than actual monthly repayments?? Should I take it back to repayment instead??

Oh it's a minefield knowing what to do for the best, but thanks to this fantastic site and all it's members, I am learning more by the day!

Thanks for taking the time to read my post!

Button

wantabetterlife

Hi Button, glad you started a diary . Oh how i would love those interest rates.....from what i hear you are doing the write thing by saving your overpayments at a better rate and then paying it off the mortgage when the interest rates go up. Do you have any idea of when you plan to be mortgage free...or are you like me...just easing yourself in gently..:rotfl::rotfl:. Ideally i would love to be Mortgage free in 10 years, but clearing £160k in that time would be near impossible!! Goodluck with everything:j:j.Ps. Still waiting patiently on Percy Pig to arrive .
WABL

Button21

Thanks for your reply WABL! I hope you enjoy your M&S meal deal!! Let me know how you get on!!

I overpaid my on my mortgage yesterday!!:D:D My balance was showing on my internet banking as £129,557.55 so I overpaid £57.55 in the hope that would bring my balance down to a nice (well, could be nicer!!) round figure of £129,500!

I logged on today only to find that the balance is now showing as £129,532...ish (can't remember the exact amount)!! The correct amount of £57.55 definately went in as I double checked the transaction.

Very disappointed!! I know it is probably correct but just can't understand why that is the case??!! I was so chuffed and looking forward to seeing it! Sad, I know!

Any ideas anyone??

wantabetterlife

Hi Button, the meal deal was absolutely gorgeous, a whole chicken, poatoes, two desserts and a bottle of wine all for a tenner, how they make a profit on it ill never know . I think i know what happened with your mortgage as this has happened to me to. Say for example your mortgage payment came out a week ago and the balance updated and then you overpaid the £57 odd pound to even it off. When the mortgage company update your balance they also include all the interest that has been accrued since your normal payment came out, because of daily interest. More will come off the capital next month though as there will be fewer days interest included. Confusing i know :rolleyes:.

Button21

Ah....that makes sense!! Thank you very much!! You wouldn't think I worked in the industry now would you??!!! :rotfl:!!

Glad to hear you enjoyed you meal deal! I usually buy them whenever M&S have them on offer - I'm not a great lover of wine, so instead I save up the bottles and give them to friends/family at Christmas instead of buying gifts! I think I accumulated around 15 bottles last year!!

I was reading on another thread that Boots are possibly starting a 70% sale on Wednesday 20th?? That would be a good time to do next years Christmas shopping!! :D

setmefree2

and Good Luck wth your MF journey.

dimbo61

" paying the difference into a 3% Less TAX saver"
What difference ?
You have an IO mortgage YES
how are you going to pay off £130k off in 25 years ?
Use "whatsthecost" to work out how much you should be paying to repay the mortgage IF repayment
Are you filling your ISA,s each year ? GOOD START
You can repay the mortgage but you need to save big style and overpay as well before rates start to climb

Button21

Hi setmefree2 and thanks for the welcome message! Fab!!:D:D

Hi dimbo 61! Thanks for taking the time to read my post! I amended my mortgage to an interest only when base rate dropped - think it was Jan last year if I remember right??

I pay £140 odd interest each month, and save approx £400 - £500 each month. I opened a Halifax Guaranteed Saver in Nov 08 and secured a fixed rate of 6% for that year, dropping to 3% in Nov 09.

I apologise for my ignorance, but can anyone tell me the benefits of an ISA - I read a small print benefit somewhere on this forum, but can't for the life of me remember what it is (apart from the obvious no tax etc...):o:o:o I do have an ISA - myself and my husband took one out last tax year and currently have £7,200 each in it.

Do you think I am doing the right thing by not having a repayment mortgage and saving the repayment element?? By the way, I will check what the amount is - I regret to say I don't know what the difference actually is so my £400 - £500 each month might be way short!:o:o

Oops....you all put me to shame! This forum is really making me re-think my finances at present!!

On a plus side - my weekly shop has reduced dramatically!! I went from £100+ per week (family of 4) to just under £40 for last week!! I shopped again today and only spent £20 and that should last me till this coming Friday!! It's alot more work peeling spuds and scraping carrots etc, but I am actually really enjoying it!!:money::money:

OMG.....its 2.25am!!

Night night all xx

setmefree2

Button21 wrote: »

Do you think I am doing the right thing by not having a repayment mortgage and saving the repayment element?? By the way, I will check what the amount is - I regret to say I don't know what the difference actually is so my £400 - £500 each month might be way short!:o:o

Oops....you all put me to shame! This forum is really making me re-think my finances at present!!

You should read this

http://www.moneysavingexpert.com/mortgages/mortgages-vs-savings

setmefree2

Button21 wrote: »

On a plus side - my weekly shop has reduced dramatically!! I went from £100+ per week (family of 4) to just under £40 for last week!! I shopped again today and only spent £20 and that should last me till this coming Friday!! It's alot more work peeling spuds and scraping carrots etc, but I am actually really enjoying it!!:money::money:

Well done on that :T:T:money:

dimbo61

Your mortgage rate is great but what would happen if the rates start to climb?
You are right to save into TAX free ISA,s and you can put another £10200 in april hopefully earning more than your mortgage rate.
If you pay £500 a month off the mortgage thats £6000 a year plus interest saved ( not much because you have such a low rate !!)
You would have the mortgage cleared over 20 years by paying off £6k each year
But the sooner paid the less interest ! GOOD LUCK