Are we in a small minority?

drewwa

sulkisu wrote: »

It's more like that he coudn't afford to overpay. He might have a well paid job now but you don't know what his finacial or personal circumstances are and have been over the past 25 years (e.g. 6 kids, stay at home wife, house remortgaged, previous debts, elderly parents to support, previous redundancy or ill health). You can afford to overpay - great - but not everyone is that fortunate. Many are struggling just to pay their mortgage, let alone overpay it.

This is definitely true, though I think some of it comes down to familiarity and not checking out the options available to you. Certainly my parents are bewildered by the sheer choice of mortgages nowadays. Back in the day it was 3x your salary and a repayment mortgage or nothing. People can be very scared of change.

Cheers,

Drew.

black_taxi_2

was never told about repayment or o/p mortgage option

told about endowment/interest only

if i knew now when i was 20ish id be rich

:beer:

:beer:

Raini

I'm embarrassed to admit that over paying didn't really occur to me before I found this site, luckily I've been here before we got our mortgage!

I think that for a lot people it just doesn't occur to them to pay the mortgage off earlier and even less people, in my experience, consider the true cost of the mortgage. I'm lucky that I have four close friends (two couples) that want to pay off their mortgages ASAP, although in those couples it's the men driving it whereas my partner is happy for me to do as I please with the over payments as long as he doesn't have to have smart price everything! It does help having people that understand. I once mentioned it to a colleague (a very well off colleague) and her reaction was "why on earth would you give the banks money back sooner?!", the fact about interest went over her head! I haven't mentioned it to anyone else since!

Also there is a lot of keeping up with the Jones's in my area anyway. A lot of people want the best of everything and aren't prepared to wait.

drewwa

Raini wrote: »

I once mentioned it to a colleague (a very well off colleague) and her reaction was "why on earth would you give the banks money back sooner?!", the fact about interest went over her head! I haven't mentioned it to anyone else since!

Wow! :eek:

Raini wrote: »

Also there is a lot of keeping up with the Jones's in my area anyway. A lot of people want the best of everything and aren't prepared to wait.

Yes, here too!

Cheers,

Drew.

Owain_Moneysaver

If lots of other people saved lots of money then things would be more expensive for the few of us who save money now!

getmore4less

Remember that overpaying has/is not always been the best thing to do.

Inflation made debt cheaper over time so for a lot of people just letting the debt run was the best option.(there was a time when I was getting 3 index linked pay rises in a year)

For many the interest rates now are lower than savings rates.

Mortgage should be part of a ballanced retirement plan

Focus on mortgage debt and neglecting savings can cause problems later for example not being able to tax shelter the investments because you have too much to save.

GreenNinja

pawlala wrote: »

I overheard someone at work the other day saying they had just finished paying the final payment towards a 25 year mortgage, this guy was in his late 50s early 60s in a well paid position so I'm guessing they either didn't know that overpaying exists or simply didn't have the motivation to pay off the mortgage earlier. I myself wasn't really aware that I was able to make extra payments until I came on here and read the diaries whilst researching about variable rates when my fixed term was expiring.

This got me thinking... what proportion of mortgage owners actually know that overpaying exists? I'm not talking about those who know but choose not to because they can't afford it.


Are we in a very small majority in here? I doubt we could ever get a definitive figure but your stories about how you first knew about overpaying may help?

Hi pawlala,

For myself I had no idea you could pay your mortgage off early until I came onto this site. Its not something the mortgage companies really wants you to do I guess so they keep quiet about it.

I am so glad that in 2006 I stumbled onto this site, it has helped me so much financially in understanding things better and also for ideas for moneysaving. I have struggled in paying bits off the mortgage but can see the benefits now. My plan is to have the mortgage paid off in another 2 years then I can start to save something for my retirement.

Must admit every time I make a payment, just sent them £1,000 last week and I get a letter back saying your mortgage is now..... and the reduced monthly payment is shown I do get a real buzz.

taka

I think we are a small minority, definitely.

When I moved here I wanted to keep my new mortgage to the same term as my 1st ever mortgage (ie finishing paying it off at the same time as my origional mortgage). Sadly I couldn't afford to do this at the time but someone at Nationwide pointed out that their mortgages allowed OPs (up to a limit) so I knew from the start of my current mortgage. My MFW target is to pay it all off on/before the end date of that 1st mortgage!

I haven't really told many people I'm trying to pay my mortgage off early. I told 1 of my collegues and a friend and they both looked at me like I had 2 heads! A good few others cannot afford to even get on the property ladder at all so it'd seem like I was rubbing their noses in it to speak about it. (I was lucky I bought at a young age in 1994 and have benefitted from property price rises or I could not have afforded to buy here on my current salary either.)

Another collegue I'm 90% sure is trying to pay it all off ASAP too though we have never really discussed it in detail - I kinda suspect she may be an MSEer too. :hello:

gerbiljo

I did realise I think but it never occurred to me to do it. When the interest rate dropped I looked into paying more due to what people were saying on the news etc and looked on here and I think then I realised the sort of saving I could achieve, I come from a line of 'early mortgage payers' so I did think I'd pay it early but I thought by lump sum rather than over paying (tho I had no idea how I'd get this lump sum!). I think if I had studied my daily interest etc before my tracker mortgage I'd of become too wound up, so good job I'v only recently realised!!

deefadog

I never knew about overpaying until a few year back from this forum!

Infact thinking about it, We have talked to 2-3 IFA's over the years and not once have they mentioned it? It's all insurance policies ect...

I have tried to educate my dad (even though he has paid his off) and he still does not get it - old school!