10 year plan

marc5180

Decided to become mortgage free before i bought our new house back in September last year, i owe 200k over 30 years which equals £1100 a month.. I also put down 20% deposit

I'm 31 and have worked out this can be done by the time i'm 40 :eek: which people say isn't possible which spurs me on even more.

At the minute i am overpaying by £500 a month and am currently on a 2year fixed deal.
My aim is to remortgage every 2 years until i get down to 60% equity which i recon should take 3/4 years and therefore get the best APR possible.
I haven't seen many (if any) deals under 60% LTV.

Each time my mortgage rates do down (hopefully) then the extra mothly savings will also go as overpayments.

It's going to be a challenge for sure but wish me luck and i'll report back in 10 years:D

Catslovelycats

Good luck marc5180!:cool:

*Jellie*

Good luck- please don't wait 10 years to report back!

getmore4less

marc5180 wrote: »

i owe 200k over 30 years which equals £1100 a monthyear,.. I also put down 20% deposit

At the minute i am overpaying by £500 a month

OK simple calculations.

If rates were Zero you need £1667pm. which is more than you are paying

Your plan to increase overpayments by falling rates will not work you need more money from somewhere else.

£200k over 10y

2% £1840
3% £1931
4% £2025



£200k over 30y £1100pm is about 5.2145%
with £500pm overpayment in 2 years you owe

£181,552.80 that over 8 years at say 2.5% is £2089pm

I think you need to be looking at around £900 overpayment to make this work.
after 2 years @ 5.2145%
£171,457.43 then 1972 @2.5% for 8 years.

originalmiscellany

So then, again a decent answer as ever from getmore4less!

If it's not rude, what's your salary? If you're on a whopping amount, it's doable, otherwise as gm4l said it could be a bit of a killer in terms of amount you pay.

What is your current mortgage deal - length and rate?

Do you rent any of your rooms out?

It sounds like a very tall order, but I wish you well

You should aim to update this every month to see how you're progressing.

All the best!

marc5180

getmore4less wrote: »

OK simple calculations.

If rates were Zero you need £1667pm. which is more than you are paying

Your plan to increase overpayments by falling rates will not work you need more money from somewhere else.

£200k over 10y

2% £1840
3% £1931
4% £2025



£200k over 30y £1100pm is about 5.2145%
with £500pm overpayment in 2 years you owe

£181,552.80 that over 8 years at say 2.5% is £2089pm

I think you need to be looking at around £900 overpayment to make this work.
after 2 years @ 5.2145%
£171,457.43 then 1972 @2.5% for 8 years.

Yes my rate is around 5.2%.
After 2 years of just paying £500 a month overpayments i hope to be down to 181,512.00.

With this i hope to be able to remortgage in 2 years time and at the minute with a 75% LTV should be able to get a better interest rate, which at the min after a quick look is around 3.2%.

I would then get a mortgage of 181,512 for 30 years @ £784 a month. As i would now only be paying £316 a month less than my previous mortgage (£1100 - £784) i hope to be able to add this as overpayments so i would be paying £816 in overpayments.

This would then bring my total after 2 years to 153,803 then i'd hope to get a remortgage at 60-70% LTV and a better interest rate and i would keep going like this.

Also both my girlfriend and i will be getting pay increases and when this happens this will also go on overpayments which we will keep increasing yer by year.

We have a car at the minute that we pay £400 a month to and are thinking of downgrading which will save us at least another £150 a month that we can put towards the mortgage.

I realise that i am presuming many things i.e interest rates won't rise drastically, we wont lose our jobs, one of us won't die etc etc and i know this could all change.

We are in a very lucky position where we have spare money to pay towards the mortgage and it may not be like that forever which is why we will work very hard to reduce the mortgage as much as we can.

marc5180

originalmiscellany wrote: »

So then, again a decent answer as ever from getmore4less!

If it's not rude, what's your salary? If you're on a whopping amount, it's doable, otherwise as gm4l said it could be a bit of a killer in terms of amount you pay.

What is your current mortgage deal - length and rate?

Do you rent any of your rooms out?

It sounds like a very tall order, but I wish you well

You should aim to update this every month to see how you're progressing.

All the best!

Hi my salary ranges with overtime from between 40 -50k ( 50k this year) plus my partner earns 30k with no children at the minute but withing a few years they will come along hopefully.

We're on a 2yr fixed rate at 5.2% with Natwest, we don't rent any rooms out or plan to.

I agree it is a very tall order something which i personally think/hope we can achieve but i'm also aware that i have to have a life as well.

somethingcorporate

Good luck on your plan OP.

The slight issue you are basing your future fixed deals on the current fixed deals whereas in reality you should probably base them around the long term average mortgage rate (considerably higher), especially since the base rate has only one direction in which to travel.

You need to factor in that the harder you work now the easier it will be later due to compound interest so any extra you can pay early on will pay dividends in future.

Jonbvn

I'm not convinced remortgaging every 2 years is a good idea. The fees will not be insignificant, and I think rates are likely to rise in the medium term (they can hardly go lower). Given this, it may be a better idea to consider a longer term fix when you remortgage next.

dimbo61

In 2 years look at offset mortgages and build up your ISA savings while both of you are working full time I think a good plan would be to overpay by £500 a month and fill your cash ISA allowance each year if you really hope to be MF by 40

marc5180

somethingcorporate wrote: »

Good luck on your plan OP.

The slight issue you are basing your future fixed deals on the current fixed deals whereas in reality you should probably base them around the long term average mortgage rate (considerably higher), especially since the base rate has only one direction in which to travel.

You need to factor in that the harder you work now the easier it will be later due to compound interest so any extra you can pay early on will pay dividends in future.

I know i need to pay as much as i can afford whilst the interest rates are low and as you say they are only going to go up but hopefully not for a while yet (fingers crossed).