Are we in a small minority?

Optimisticpair

In my line of work in the seventies, and I was in my teens, there was the option of staying in a job in a shared tied cottage or a caravan on site regardless of how I was treated or change jobs and risk going from a frying pan to a fire. Couldn't buy then because I never knew if I'd get another job locally. I think that permanently set the idea in my head that even if there were two of us I would never buy a house that couldn't be paid for on one wage.

When we looked for a mortgage offset wasn't mentioned but I knew from here that it was an option. It was only really from being here that I learned of overpaying. I suspect I'm in a minority group.

Personally we don't have this single goal of overpaying as soon as possible, we have other financial commitments, we have been here two years and are renovating at the same time, but we think any little overpayment when we can manage it is better than none.

cake21

I knew about overpayments when I took out my mortgage, but I didn't appreciate how much of an interest-saving it could be until I discovered this site :T

Seems I'm in the minority - most of my close friends / family / work colleagues have been overpaying since interest rates fell.

drewwa

I'm happy to say I'd figured it out before discovering this site. (I actually had an idea to create a site like this as a business idea, but my research quickly led me to discovering this one! Ho hum! )

However this site has helped in a number of ways.

Lots more detail on mortgage calculators, queries on deeds, endowments, overpaying pros/cons etc
Biggest of all though - encouragement to keep going - especially when your target is years away!

Cheers,

Drew.

JoeyGrey

I have an ex-council house that I bought for under £30 k. However, I’m single and on a relatively low wage, and had previously added to my mortgage to buy a nice car, so owed £40k, and this to me was an awful lot of money. I had never heard of paying a mortgage off early that I can remember and just thought of a mortgage as something “normal” people had.

I was advised about 3 years ago by my mortgage advisor friend to start overpaying – she told me that they just put any spare cash they had left at the end of the month onto their mortgage and it was sometimes only £20 but other times was much more. That got me thinking as my interest rate was quite low and I could easily keep my payments at the same as they had been on higher rates. I didn’t really have paying my mortgage off in mind at that time, rather I was thinking that if redundancy ever raised its ugly head, I would perhaps be looked upon kindly if I had overpaid for some time beforehand.

It was only at the beginning of this year that I started to wonder how long the small overpayment I had made over the two years had knocked off my end date. That was a nice surprise. I had been told that I was getting a small payrise, so then worked out how much more that would knock off if I just put it straight on my mortgage. Before I knew it I had a full plan in place to get my mortgage paid off or at least offset (with the money in an ISA) in 2018, 10 years early. This has now been revised to 2016 and I’m working on getting it revised even more if possible.

This has become almost like a game to me now. Any spare money, including my virtual pot at the end of each week, goes into my mortgage free fund. It has led me to meal planning in order to take control of my food spend each month, ebaying and my first carboot sale to make a bit of cash out of the junk in my loft. I don’t know if I will want to live this frugally long term, but while it is fun, I’m going with it. And I keep thinking that I’d rather do this now while I have a choice and no stress than risk waiting till I have no choice and am panicking.

I think we are definitely in the minority, otherwise, surely someone would have told me about it before

Joey
x

pawlala

JoeyGrey wrote: »

I was advised about 3 years ago by my mortgage advisor friend to start overpaying.

finally a story about a mortgage advisor who properly advises!!

coldstreamalways

I'm 28 and really want rid of it all as soon as possible (looking like 40 ATM) but as soon as the (interest free) cc is paid off (November), we're going to start throwing everything at the mortgage. We've been used to our frugal ways for ages now so it will be a real treat to have an entertainments budget of more than £20 a month and we'll hopefully pay the mortgage off in 10years.

It doesn't help when you'r relatively young though that you haven't really settled into a job yet (my parents have been in their jobs 20+years), I don't especially enjoy my job but am a bit scared to leave it and possibly take a pay cut.

I don't think any of my friends know about OPs, they just want as much disposable income per month as they can possibly get and think nothing of 2/3 holidays a year, buying a personalised number plate etc etc....:eek:

Cazzdevil

Overpaying just didn't occur to me before and I started out on the other team; borrowing extra on the mortgage because "well it's a mortgage, it's the one debt you're ALLOWED to have". But then I came to the realisation that it's my single biggest monthly expense and by the time I'd paid it off under the original term I'd have nearly paid the purchase amount twice over and that was just absurd.

My parents never thought about overpaying and they've borrowed extra over the years etc and while their mortgage finishes in about 4 years I only have 7 left on mine. So I'll be mortgage free at 37, but my folks have to wait until they're in their 60's. If anything, their "mistakes" have highlighted to me how easy it is to have the noose wrapped round your neck for more years than you ever intended.

I'm so looking forward to stepping back, looking at my house and thinking "that's mine, I own every brick, no one can take it off me and I've always got a safe roof over my head".

Aah.

mintedmatty

coldstreamalways wrote: »

I'm 28 and really want rid of it all as soon as possible (looking like 40 ATM) but as soon as the (interest free) cc is paid off (November), we're going to start throwing everything at the mortgage. We've been used to our frugal ways for ages now so it will be a real treat to have an entertainments budget of more than £20 a month and we'll hopefully pay the mortgage off in 10years.

It doesn't help when you'r relatively young though that you haven't really settled into a job yet (my parents have been in their jobs 20+years), I don't especially enjoy my job but am a bit scared to leave it and possibly take a pay cut.

I don't think any of my friends know about OPs, they just want as much disposable income per month as they can possibly get and think nothing of 2/3 holidays a year, buying a personalised number plate etc etc....:eek:

Spot on, although my core group of best friends are all sensible with money, but none of them over pay on mortgages, though we all are lucky enough to be in decent jobs where we can all holiday once twice a year! Luckily only one of my good friends has the daft personalised number plate?

RenovationMan

We have been overpaying our mortgages for the past 5 years and we're now in our third house. Had we stayed in the first home we would have been completely mortgage free, had we stayed in the second we would have been mortgage free in about 5 more years and now in our new house I'd be happy to be mortgage free by the end of the mortgage term (but I'm not banking on it). I'll always be making overpayments, but the mortgage is so vast that they're a drop in the ocean.

Perhaps the OPs boss was the same, he kept buying larger and larger houses and his last one before retirement went full term on the mortgage? If he's anything like me, he'll then sell it and downsize to release the equity tax free. Overpayments are not only about becoming mortgage free, they're also about increasing equity so that you can either move to a larger home that you would not have afforded had you kept the original mortgage term & payments or to build up equity for when the time comes to retire and downsize from a family home.

mintedmatty

RenovationMan wrote: »

We have been overpaying our mortgages for the past 5 years and we're now in our third house. Had we stayed in the first home we would have been completely mortgage free, had we stayed in the second we would have been mortgage free in about 5 more years and now in our new house I'd be happy to be mortgage free by the end of the mortgage term (but I'm not banking on it). I'll always be making overpayments, but the mortgage is so vast that they're a drop in the ocean.

Perhaps the OPs boss was the same, he kept buying larger and larger houses and his last one before retirement went full term on the mortgage? If he's anything like me, he'll then sell it and downsize to release the equity tax free. Overpayments are not only about becoming mortgage free, they're also about increasing equity so that you can either move to a larger home that you would not have afforded had you kept the original mortgage term & payments or to build up equity for when the time comes to retire and downsize from a family home.

Agree 100%, who knows what the future may hold, all i know is that the less i owe on my mortgage the better off il be, with rates the way they are it just makes total sense to me to overpay as much as possible? I may get to a point where say i have £20,000 to go and I could either sell and use as a great deposit somewhere else or i maybe lucky enough to have a lump sum to pay off the whole mortgage! and be a true MFW! saying that tho, Mrs MM is already looking on rightmove and i spat my weetabix out when i looked what price bracket she was looking in! I will never be rich with Mrs MM's tastes!