Mortgage free vs lifestyle for kids???

Decadent_Fool

Sorry I'm a bit late to this thread, but just wanted to say that we (me, g/f + 2 kids 13 and 6) had a great weekend in Worthing this year, in addition to South Africa last year.

Both rocked, and made me remember about quality time can come very cheaply...hence my sig

Good luck !

Luke

Joe_Bloggs wrote:

@Luke
Where did you get those figures from ?

Mortgage £150,000
Total interest £113,065.52
Total £263,065.52
Monthly payment £876.89

Assuming you paid £1000 of at the start would be as follows.

Mortgage £149,000
Total interest £112,311.75 (£773.77 less)
Total £261,311.75
Monthly payment £871.04 (this also falls but if you kept it at £880 you stand to save even more.

Joe_Bloggs

The difference in the totals is just down to the imaginary lender reducing the monthly repayment in response to an overpayment. I asked my lender to keep the the monthly rate the same in response to overpayments and interest rate reductions. Sadly there was only one rate reduction and this has now been reversed.
It is preferable to be in a position to choose what to do with your spare money rather than have no choice in the matter. Those with flexible mortgages may well get a better tax free savings rate by offsetting money for a holiday in their mortgage account until needed. The alternative is to pay tax on the interest rather than benefit from reduced interest on the mortgage. Strangely my lender notifies a credit reference agency each time I make an overpayment.
J_B.

Thefunkygibbons

This is personal choice and everyone will have a view on whether they need to be strict with themselves

One can always use the excuse that the kids deserve it (especially if trying to keep up with the Jones) but if one is strong then, a one off will not break the bank

In our case, we do tell the kids what we are doing and the importance of good money management

cupid_s

My parents didn't take me abroad until I was 5. I am glad. I remember nothing about that holiday (apart from being sick because I drank pepsi) or the one when I was 6 ,7 ,8. I have snippets of memories from disneyworld when I was 9. And my parents saved £100 every week for a whole year to take me and my sister there.
In my opinion most of the holidays abroad that I went on until I was 11 were a waste of time, I enjoyed them at the time but I am sure I enjoyed our UK holidays just as much.
It really upsets me that my parents saved so hard to take me to these nice places and I can't remember anything.
If you paid the money off your mortgage now, you'd save so much more in interest and when they get to an age when life experiences will really alter them and they will be able to appreciate and remember these nice holidays more, you'll be in a better financial position to be able to do whatever you want then.

looneyleo

Well Hello everyone again...

So gald to see my thread has generated so much interest from you all. I'm a newbie and it's so nice to have all the positive feedback from you. THANKYOU...

As I have said...the general gist of my thread was how do you set a standard of living for your children against paying the mortgage off early? I know my children are very young and probably won't remember the holiday but those moments recorded on the digi cam corder are priceless and will last forever, and as said before it's OH Cash not Ash money that has been saved - so I think we are going!

The holiday was just an example though, there are lots of things I would like for my family/me/the house e.g. new bedroom furniture, new TV system (currently have a TV that cost £25.00 from a friend)... ohhh and the list goes on! We have a large house that needs a lot of renovation. I would say we are 70% there now, but there is no more money and I won't be extending the mortgage any further...so we have to save. It's when I have saved...that it then becomes hard knowing if to buy the new TV or pay off the mortgage?

We have done well with the house...we bought for £85,000, added £65,000 to the mortgage for renovation and it is now worth £300,000 (or more) in 5 years...and we still have a whole floor to renovate which would add significant value again...(The house is also now in a very good living condition for a family)

We have seriously considered selling and buying somewhere cheaper but perfectly adequate (£150,000 would buy a new 3 bed detached in my area)to be completely mortgage free, but the house is fantastic, totally unique and will fit our families growing needs for many years to come - and we are managing to afford it...but it is such a lot of money that I would like to be rid of a.s.a.p.

There are no right and wrong answers I know. Believe me, I know how to have cheap holidays (we own a tourer caravan -old but adequate - and regularly go away for £10.00 per day to the seaside) or visit friends for free, and if there is an MSE way to do something, then I'm there doing it!

It's just knowing where to draw the line to get rid of this huge mortgage figure luming over us. Waffling a bit now....but thanks again. Looneyleo

Spendless

looneyleo wrote:

The holiday was just an example though, there are lots of things I would like for my family/me/the house e.g. new bedroom furniture, new TV system (currently have a TV that cost £25.00 from a friend)... ohhh and the list goes on! We have a large house that needs a lot of renovation. I would say we are 70% there now, but there is no more money and I won't be extending the mortgage any further...so we have to save. It's when I have saved...that it then becomes hard knowing if to buy the new TV or pay off the mortgage?

We have done well with the house...we bought for £85,000, added £65,000 to the mortgage for renovation and it is now worth £300,000 (or more) in 5 years...and we still have a whole floor to renovate which would add significant value again...(The house is also now in a very good living condition for a family)

snap:D though ours is borrowed from a friend. This is where diversity comes in cos if you'd asked about a tv instead of a hol I'd have answered nah overpay the mortgage instead:D . That's cos dora the explorer, spongebob and football look the same on any tv to me and I rarely get a look in with programmes:rolleyes: .

we also bought a year before house prices boomed round here and we are currently having a similar dilemma put up with house as it is and overpay-reducing length in half or borrow the money to make it at a standard which we would like, in which case the money we could spend on overpaying would be spent on paying off the loan instead.

Good luck whatever you chose :beer:

looneyleo

Hi Spendless...Have to agree...the TV is definately on the back burner and the bedroom funiture will also have to wait until it really does fall to pieces!

Anyway, as an update...done a couple of things today with the mortgage...

I've increased my monthly payment to a round £900.00 which makes an overpayment of £12.00, not much I know but a start. I'll see how we go and I may move it up to to £925.00 in a couple of months. I've got myself logged on to the internet banking to keep a regular eye on the account...and I've got myself a mortgage pig to be popping the odd penny and pound into as we go...

i know it's not the £1000.00 I've got in savings, but it's a start!

md_14uk

looneyleo wrote:

...or just rounding up my payment from £880.00 to £900.00

Do it! You won't miss £20 a month and it'll make a bigger difference than you might think! It could drop as much as 9 months off you're mortgage term and (depending on your interest rate, and if I've calculated it correctly!). It all adds up and I reckon this is a good start... :rotfl:

Good Luck :T


Edit: Just saw you're last post, which I'd read all the way to the end, how daft do I look now!!!! :embarasse

looneyleo

Well, I thought I might as well ask you all for an opinion on my endowment.

My OH took it out whilst in the navy advised by finance officer of the NAAFI. He didn't actually have a house at the time but was advised to have one to start the saving going. (October 1994).

When we bought our first house in 1996 we had a classic interest only mortgage and used the endowment with it to cover a £40,000 mortgage. When all the hysteria went off about endowments, we changed provider and went for a repayment mortgage...but was advised by an IFA to keep the endowment going as a savings plan... We still have a repayment mortgage for £150,000 but said we would pay the £40,000 off the mortgage when the endowment matures in 2019 - or whatever amount it makes in the end

Well 10 years further down the line...the £69.40 is still being paid per month. On Friday I sent the standard complaints letter from the Endowmentaction site to see if we can get any compensation for mis-selling (if successful it will go on the mortage) - I couldn't stand Martin's nagging any longer!

But do you think I should continue with this policy or pay the £70.00 off the mortgage directly per month? NB the policy was with Scottish Amicable - now Prudential. If I do get rid of the policy...how do I do this? If the policies are so bad...why do other companies by them??? Interested in your views...