how much does anyone overpay on there mortgage? 15 September 2010 at 9:47AM edited 15 September 2010 at 11:27AM in Mortgage-free wannabe 69 replies 6.4K views

murphy306

And there was me thinking that paying £200 to £300 a month extra was good - you guys paying up to £1000 are great, i wish I could do that maybe one day lol

coldstreamalways

It still is brilliant!! I think the point is, if you earn £12,000 a year (I'm no good at maths but you'll get the point I hope) and pay off an extra £1200 a year, that's a big proportion of your pay. If you earn (say) £120,000 and pay off £1200, well, that's abit poor because you must be wasting money somewhere. It's not the actual quantity I think is important, it's the percentage of your income you OP or the extra income you make just for OPs that is important.

IMHO anyway!

uzubairu

coldstreamalways wrote: »

It still is brilliant!! I think the point is, if you earn £12,000 a year (I'm no good at maths but you'll get the point I hope) and pay off an extra £1200 a year, that's a big proportion of your pay. If you earn (say) £120,000 and pay off £1200, well, that's abit poor because you must be wasting money somewhere. It's not the actual quantity I think is important, it's the percentage of your income you OP or the extra income you make just for OPs that is important.

IMHO anyway!

I agree.

The mortgage payment and the £1200 overpayment accounts for 50% of our monthly income.
Living a moderate MSE lifestyle ensures that we have a comfortable existence on the other 50% (and we only have 2 mouths to feed).
If we did have to more mouths to feed, we would have still tried to maximise the overpayments and the % would definitely be less.

Every little helps and those with kids/pets have to make the income feed a lot more, and those with lower incomes have less spare after essentials have been paid for, so whatever you can do, given your specific circumstances is great if it is optimised.

curlygirl1971

Am single, with no kids, on an average wage and thankfully - no other debts.

I currently OP an average of £254 per month and have now taken 2 years off my mortgage term.

Am on SVR of 3.5% and only have a £40k so my standard repayment is very low compared to most. So an extra £254 per month isn't that spectacular and am in awe of anyone who pays larger amounts - especially those with families - but I guess I have to keep reminding myself that circumstances are probably not the same and how much I OP is also a lifestyle choice.

If I changed the way I live and handle my finances I could OP more. No clothes allowance, no holiday savings, no social life, no fall-back savings to feel secure with.......A few years ago I couldn't afford those things, I couldn't save or OP......so I really appreciate the current ability to do all of those things carefully and thoughtfully.

My OP's increased when I joined a couple of the MFW challenges on this forum - they really do help motivate you, give you ideas and get you to squeeze out that few pounds extra. Well actually probably about £100 more a month in my case.

I think anyone who OP's by any amount - no matter how small - is doing a great thing for themselves.

mirry

We are on a fixed rate , so can only pay 10% a year ,
Today we paid £2000 off our mortgage. Only another year left on fixed rate and then we can throw our savings at it , it will be paid off in 2 - 3 years time, I am really happy that we started overpaying 8 years ago, its well worth it.

gerbiljo

We overpay alot a month and and have chosen to make significant sacrifices to do so, stimulated by the drop in interest rate, in combination with inflexibility at my job not allowing me to work part time (couldn't afford to not work at all). I am fortunate in that my parents provide free child care. If I could have a job that allowed me to have any sort of a life right now I would work part time and gladly drop our overpayment amount however my hours are 9am-7pm monday to friday with a lunchbreak (sometimes) and the main window to see our little daughter is the weekends (thankfully I now get them).

We won't be having any holidays until the mortgage is paid now and spend minimal on food etc and I'm always trying to do extras to go towards xmas etc. So despite us over paying alot (try to do at least £2200 a month) I can only justify that because it is doable short term, If I would have to do this longterm I could not justify the sacrifice ie) making myself miserable! Plus I would love to have another baby and be a stay at home mum or at least work part time so I feel getting shot of the mortgage will allow me to leave my job if thats what I need to do to then put my family time first. We are really careful with what we spend, we are lucky to earn what we do but it certainly doesn't come easy (not that anyones money does).

I think even if you are making small overpayments that is still important and hugely significant. We all have different motivations and different size mortgages and personally I really admire the people who struggle on with the small over payments as I find it frustrating enough with our situation and its amazing to see everyone coming together on here and reducing our debts, no matter how big or small.

Niv

I dont over pay at all. When it comes to the end of my fixed term I renegoiate based on how much I can afford each month and this basically lowers the term. My mortgage is about 50% of my take home pay. I could probably overpay some but it would mean cut backs whaich I dont feel are needed, at the current rate I should be MF by the time I am 38 which I think is not to bad.

Thrugelmir

Interest rates reducing incentivised us into making a real effort to reduce our mortgage term. So we maintained our monthly payment at the level when we took our mortgage out in July 2007. Currently overpaying by around £470 per month.

Also have benefit of the mortgage having an offset facility which we save into. Aided by a couple of lump sums. We've managed to reduce our mortgage by £31k in 39 months.

We are taking the view that interest rates are only going to rise in the future. Also pay freezes and tax rises will reduce our disposable income.

Recently we learnt that my partner (she's 53) has the early stages of arthritis. So this will greatly restrict her ability to work in the years to come as her condition detoriates. Giving us even more impetus to clear the mortgage asap.

Thrugelmir

gerbiljo wrote: »

I think even if you are making small overpayments that is still important and hugely significant. We all have different motivations and different size mortgages and personally I really admire the people who struggle on with the small over payments as I find it frustrating enough with our situation and its amazing to see everyone coming together on here and reducing our debts, no matter how big or small.

Agree with your thoughts.

Making a change however small to ones spending habits. Could make a significant improvement to ones life in later years. Even if its just to have a once in a life time trip abroad.

blueberrypie

shortchanged wrote: »

That's it. I seriously need to get a better paid job or get rid of the kids. I'm doing something seriously wrong here. I don't even have a particularly big mortgage but could never overpay the amounts some of you guys are stating.

The only thing I can think of is that a lot of you guys have come out of fixed mortgage deals and are currently reaping the rewards of a low SVR.
Am I right?

We are currently reaping the rewards of a decent tracker, but we're not overpaying. Well, we are, sort of, because we reduced our term and that increased our payments, but I'm not making any ad hoc overpayments. No point when our mortgage interest rate is so low.

But that doesn't mean I'm spending it all. Oh no...I'm stashing it. I can easily make more interest on it than I'd be saving if it went towards the mortgage, so that's what I'm doing. When the base rate goes up and my tracker rate overtakes what I can earn in savings, that's when I'll drop a load on my mortgage :-)