Another MFW - bit of advice needed please!
Marksy
Forumite 53 Posts
We have a current mortgage of ~£x, which we took out at the start of last September (so we're in our 2nd mortgage year now).
We can make overpayments each year up to 10% of the original mortgage value without being penalised. This figure is £4,475.
For this mortgage year, and last mortgage year we've paid the above amount off the mortgage. Which has shaved 22 years off the term (We'd also increased the monthly payments to bring it down to a more respectable term (18years) - effectivly going from 5.49% to 7.8% if I've worked that out correctly).
We've ~£21k saved in Premium Bonds, ISAs, and Bank accounts
We'd planned on each mortgage year to pay off the 10%, and would like it paid off within 10 years.
I since have spoken to my mortgage provider and found out how the penalty is calculated.. which to be fair isn't that much in cosideration to the amounts paid off. So now I'm wondering if it'd be worth paying off a large chunk of it now, or sticking to our original plan? We're planning on staying in this house for the foreseeable future (at least 10-15 years anyway).
We don't have any other debts, and pay our credit card off in full at the end of each month (in order to get club card points so that we can put them towards a 'free' holiday).
Reason for my change of heart is I've been thinking recently - is it worth us saving whilst we have a mortgage? Playing around with the mortgage calculator it looks like I could further reduce my term by 8 years if we took 10k off the mortgage balance... or 20k off the balance would take the term to 5 years (but leave us with nothing left in the bank).
I'd like to get the mortgage gone ASAP, so we can start saving and have holidays/save for our child(ren), etc.
Any advice would be great. Thanks
We can make overpayments each year up to 10% of the original mortgage value without being penalised. This figure is £4,475.
For this mortgage year, and last mortgage year we've paid the above amount off the mortgage. Which has shaved 22 years off the term (We'd also increased the monthly payments to bring it down to a more respectable term (18years) - effectivly going from 5.49% to 7.8% if I've worked that out correctly).
We've ~£21k saved in Premium Bonds, ISAs, and Bank accounts
We'd planned on each mortgage year to pay off the 10%, and would like it paid off within 10 years.
I since have spoken to my mortgage provider and found out how the penalty is calculated.. which to be fair isn't that much in cosideration to the amounts paid off. So now I'm wondering if it'd be worth paying off a large chunk of it now, or sticking to our original plan? We're planning on staying in this house for the foreseeable future (at least 10-15 years anyway).
We don't have any other debts, and pay our credit card off in full at the end of each month (in order to get club card points so that we can put them towards a 'free' holiday).
Reason for my change of heart is I've been thinking recently - is it worth us saving whilst we have a mortgage? Playing around with the mortgage calculator it looks like I could further reduce my term by 8 years if we took 10k off the mortgage balance... or 20k off the balance would take the term to 5 years (but leave us with nothing left in the bank).
I'd like to get the mortgage gone ASAP, so we can start saving and have holidays/save for our child(ren), etc.
Any advice would be great. Thanks
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