New lone MFW

Ferrety_2

Hello

I've just moved into my new little house, my first payment is due on 6 June and I already fancy being rid of it. Or at least putting a decent dent into it by the time I can remortgage in 2 years.

My new mortgage is £110000, I'm on my own with it and I earn around £27000-£30000 a year, depending on how much extra work I can swing.

It's a Natwest tracker currently at 4.69% and I was planning to pay off the eqivalent of a couple of extra percent (about £130/month) to insulate me from rate rises. Thanks to recent talk, this may all be blown out the water if rates shoot up by 3.5% - eek!

One question: does anyone know how I can actually make overpayments to Natwest? My main account is First Direct; do I just do 'pay bill' type thing online using the mortgage ac details for recipient?

I'd be interested to hear from others paying off a mortgage alone and how they cut back to manage it.

SmlSave

Welcome to MFW Ferrety!

I've just got my remortgage with NatWest and they said the best way to OP was by calling them up so that they can identify the money straight away. I'm thinking of just upping my payings to OP very months though....I really must call them!

Is your tracker one of those that allows you to switch to a fix in three months?

SmileyG_2

Hello Ferrety and welcome.....

I do't know if you have savings, but the first thing I did when I moved to my current property was to do a budget and seriously commit to a fixed amount each month for the mortgage.

I had a two year tracker initially, which went the right way and eventually I was able to build up a contingency in a Cash Isa which was designed to offer me protection against rising rates.

If rates do rise, you then have a buffer to supplement the monthly mortgage if rates go against you.

If rates go in your favour, you can seriously think about using the growing contingency to pay down the mortgage at some future date.

Once you have enough of a contingency to offer some protection against rising rates, then you can consider pay extra off the mortgage.

It's working for me .....

SmileyG

Ferrety_2

Hiya,

Thanks for the advice.

I don't exactly have any serious savings - it all went on the deposit! But thanks to the stamp duty for ftbs being dropped, I ended up about £1000 in the black rather than the same amount in the red after buying furniture etc (thank god for ebay/gumtree!).

I was planning to split this: £500 in my ISA and save £100/month; £500 straight away as an overpayment!

I do have the option to switch to a fix, but the fee is very high so I think that fairly extreme things will have to happen with interest for me to consider that.

With my mortgage at 4.69%, it just seems better to concentrate on ops than on savings for the next 2 years. I hope that doen't sound naive and foolhardy!

Queen-Bee_2

Hello Ferrety

I'm paying off my mortgage on my own, so you've company on your journey!

Unlike you, I do have savings, and I'm using them to pay off large chunks on a monthly basis, having drastically reduced the term. However, this is at the moment - if my circumstances change, I'll have to stretch the term again and make lower payments.

What I've also done alongside is drastically change my lifestyle. Costs have been shaved absolutely everywhere so I can continue repaying at my current level for as long as possible. Telephone, internet, insurance... its all come under scrutiny!!

Sign up with Topcashback, never simply renew arrangements with existing providers but shop around, hang out on the MFW board and read lots of other people's diaries (I have found this really helps). Maybe also check out the Old Style board as well, to reduce your cooking and general household costs.

My current [fixed] interest rate is 4.59% so at the moment, it's paying me to pay down the mortgage. Doubtless my ISAs might come into their own again if interest rates rise, but my ultimate objective is to Own The House. Once I'm freed of a mortgage, I'll have far more choices in life!

Best wishes
QB

Primrose

Ferrety - as you're paying your mortgage alone, you might want to think about building up a contingency fund of a minimum of 3 - 6 months expenditure first before you think about overpaying your mortgage, even though I can understand why you are anxious to do so.
The economy and job security is in a very volatile state at the moment, and with nobody else to help with mortgage payments, it will give you peace of mind to have these savings behind you if you were to become unemployed and it takes you a little while to find another job. These savings can be in any kind of account, ISA or otherwise, depending on where you can get the best rate, as long as they're easily accessible in an emergency.

Ditto

It would also be advantageous to have a contingency fund in case you have unexpected repairs to be done i.e boiler breaks, leaking roof etc

Ferrety_2

Yay! Made my first overpayment today.

Natwest don't make ad hoc payments easy though! Rather than just transfer money to my mortgage ac using ac no and sort code as I would with any other account, the process is thus:

1. Transfer money to a special secret holding account that Natwest grudgingly gave me the ac number and sort code for.
2. Remember to put my own mortgage account number as the reference.
3. Natwest will pass the money onwards into my mortgage account.

Anyone know why they do this? Is it just a money spinner so they can get interest by leaving the money sitting in this intermediatry ac for a few days?!

Leigh-Anne_60

I would say its probably due to system restraints knowing Natwest! Some of there processes are really in the dark ages !

I can make OP's easy enough with C&G but am frustrated with not being able to see my balance online.... Again assume its just due to system capability

Ferrety_2

Woo! Massive pay check for a load of overdue overtime I'm owed has meant a bumper £700 op!

I've had my mortgage for 15 days and overpaid £1200 - if only I could carry on at this rate

It still makes me nervous using the weird online 'suspense account' transfer system I have to with Natwest - it's annoying not actually seeing the money hitting my mortgage.

Ferrety_2

Welll after scraping through last month with no OP thanks to a load of my pay being delayed, today is payday again and I've managed a great wodge of £700 in the mortgage ac.

I've now had my Natwest mortgage for 3 months, which means I can shortly take advantage of the 'fix' bit of the track and fix function. I've searched and searched on the forum for someone who's done this, to no avail, so I'll update with the results.

It SHOULD mean being able to pay a £200 fee and exchange my 4.69% tracker for a 4.29% two-year fix. Sounds great in theory; anyone spot any pitfalls? It means I'll pay approx £585/pm instead of £625 while knocking my mortgage down from 24.75yrs to 24.

Have a lovely day everyone
Ferrety