First venture into MFW...

Saver-Rob

Thanks both. We do live a cheap lifestyle. We get the best deals on food and often cook large amounts, freeze and eat at a later date. We dont 'go out' much, ie meals or pubs. We have some small expenses that arent essential (ie unlimited card for the local cinema) but this money does not total much. I think the fact we can still save a healthy amount demonstrates we arent wasting much, if anything, so I am fairly confident in that department.

That egg calculator was good. I'd love to overpay by £499/month as it would reduce our mortgage term to 10 years. I just wouldnt be comfortable paying out that much a month as it would all depend on overtime and I never rely on that.

I am going to start the process of getting an overpayment set up this week and we will review the amount as and when we are in a position.

Thanks again.

pammyj74

I upped my MPs by £100 which took off a couple of years and now I also just OP what I can afford each month, differs each time but I can do it online so its quite simple to do. But like others have said, just pay the £499 from your savings each month if that is all you are allowed OR reduce you term by a year or two knowing you can pay £200 for example extra and then you can OP the £499 as well on top of that as and when you want to.
Who is your mortgage with?

dimbo61

Hi Rob !
sorry I read your post and took it that you had put down a £50K deposit and still had £28K in savings!
Thats why I said set up the DD for £499 out of your savings and then top up savings as and when you get any overtime.
Mortgage free in 10 years would be one hell of a goal !!
GOOD LUCK

Saver-Rob

Thanks both.

You read right. We did put 50k down on the house and have built up the 28k since that time.

I think 499 is too much each month (and she isnt happy with that amount) so I am thinking more 200 - 250 a month which seems reasonable and balanced.

By the way, I'm with Britannia!

dimbo61

Is your £28k in savings earning the same amount in interest as you are paying on the mortgage ( offset ?) If not then op by the max allowed £499 and top up savings when you can over the next 4 1/2 years.

Saver-Rob

We arent getting a great deal on the savings at the moment, however I dont think we want to put everything in to the mortgage. We want a balance and thats why we are looking at the £200 figure. We want a healthy savings account for emergencies and planned work on the house (we're getting a new bathroom this year).

pammyj74

It is definitely better to use your savings for things like that and not to leave yourself short. Although you do have a very healthy savings pot there. I dont even have 1/10 of that!!
The quicker you OP the more interest you save in the long run. So while you can OP £499 a month I would seriously consider it. It wouldnt put that much of a dent in your savings say for the next 6 months?

Saver-Rob

I want to get our bathroom done before I overpay anything just so I am comfortable. I know it wont cost anything like that much but its alot to pay out all in one go.

In 18 months time my girlfriend should be working in her new occupation and we'll have a combined income of around £50,000+ before overtime. Thats when we can reassess our overpaying.

Thanks.

pammyj74

Cool, obviously you have to do what you are comfortable with at the end of the day.
Good luck

dimbo61

Well Rob you either want to be a MFW or not!
Now overpaying by £499 a month is not that much when you have £28K sat in the bank.
You should be able to get a good quality bathroom fitted for less than £5K and I would not spend any more than that on a property which you paid £160K for.
Having over £16K in savings means the nice people from the benefits agency will ask you to live off your savings should you lose your job.
Your savings wont be earning what you are paying in interest so go for it and you will have a huge part of your mortgage cleared at the end of your fix.
Plus you wont have to worry about interest rates then!