RT's Mortgage Free Quest...

Sepa74

Hi Robin, You must be feeling so good seeing such quick results! I think you're absolutely right that every journey is about the small steps... that's quite a comforting thought for a day when I've just calculated my mortgage will be paid off in 2036!!

dimbo61

well done so far just keep the faith with the regular £500 overpayment its a pitty that you cant just set up a DD for the full mortgage amount and the £500 OP as you would then consider that as your Normal mortgage payment.
Reasons to overpay
1 you reduce the term ( MF before you are 35!!!)
2 you build up equity in your home and owe less in case rates do rise
3 you wont get 4.5% tax free elsewhere ( maybe but high risk)
4 you are building up an overpayment fund in case you need a mortgage holiday ( say one of you lose your job)
5 Interest !!!!! overpaying will save you thousands of pounds in interest
6 For example I also had a £120K mortgage and by overpaying about £500 a month I have saved £50,000 in interest over the term

wantabetterlife

Hi RTNI, that is great progress so far, looking forward to your updates :j

RTNI

originalmiscellany wrote: »

Well done Robin, on making inroads into your 30 year term - if you keep this up, to go from 30 year mortgage in Sept 2009 down to 26 years in February 2011 means you'll be mortgage free by the end of this year if you keep up the good work
What a great incentive to know that you've taken 3 3/4 years off your mortgage already. Well done!

Hi, thanks for that. Yes its a good feeling for me and Mrs T knowing that that amount of time has been saved, never mind the interest! I always tell her the savings in terms of the Mini Cooper that she currently wants - that is by the time we finish the mortgage we could have saved enough interest to buy several of them!

Just looking to keep OP by £500 a month (as this is the minimum that mortgage provider will recalculate the interest at due to it being annual interest (Boo!) ) so that we can clear it ASAP. Using Locoblade's spreadsheet as a rough guide we should be clear in another 10 years or so!

RTNI

Sepa74 wrote: »

Hi Robin, You must be feeling so good seeing such quick results! I think you're absolutely right that every journey is about the small steps... that's quite a comforting thought for a day when I've just calculated my mortgage will be paid off in 2036!!

So good indeed! As it's an annual interest calculation that we are on with the mortgage provider if we pay a minimum of £500 OP (up to 10% of outstanding balance each year) then they recalculate the interest immediately to give us the benefit of the OP. Anything less than £500 does count, but not until they do the sums at 31st December.

Try not to worry too much about the 2036 deadline - just put away what you can that will not see your quality/standard of living decrease by more than you want to and the maths will work itself out!

RTNI

dimbo61 wrote: »

well done so far just keep the faith with the regular £500 overpayment its a pitty that you cant just set up a DD for the full mortgage amount and the £500 OP as you would then consider that as your Normal mortgage payment.
Reasons to overpay
1 you reduce the term ( MF before you are 35!!!)
2 you build up equity in your home and owe less in case rates do rise
3 you wont get 4.5% tax free elsewhere ( maybe but high risk)
4 you are building up an overpayment fund in case you need a mortgage holiday ( say one of you lose your job)
5 Interest !!!!! overpaying will save you thousands of pounds in interest
6 For example I also had a £120K mortgage and by overpaying about £500 a month I have saved £50,000 in interest over the term

For Mrs T and I, this is possibly the biggest reason for doing the OP's. Why should we give our hard earned money to the bank when we can pay a bit more off each month and save a huge sum as you have highlighted?

Do have to say that we prop will move in the next 5 - 10 years from this current house, but as you say in 2, this will only be a good thing as any future borrowing will be less than it would have been if we had no OP's.

We are just continuing to save money and sending it to the bank each month without lowering our standards too much - still saving a bit each month into the "just in case" fund as you never know what might happen!

RTNI

wantabetterlife wrote: »

Hi RTNI, that is great progress so far, looking forward to your updates :j

Thanks for that! I look forward to providing all you avid readers with them when I can!

Right, must go back to the PhD studies; I have a paper to write for a conference and it won't write itself!!

RTNI

Morning everyone,

Sent another £500 this month and got the letter confirming that they received it. I asked them to provide me with an updated balance, but this was not included in the letter so I must contact them about that and also the last 2 letters tell me what the term has been reduced to, and this was missing too. It was a different person who signed the letter this month, so I hope that it goes back to the other guy for next month!

RTNI

Just called the building society - approx balance is £118,150 and term remaining is exactly 26 years. Look to be on track for 70% LTV for re-mortgage in June/July time.

RTNI

Well folks, another month has passed and another £500 sent to the BS for an overpayment in addition to the usual monthly DD amount that is taken out. Got a letter confirming the over payment and with a quick call to the local branch the latest figures are a balance of approximately £117,670 and a reduced term of 25 years and 9 months.

We are now under the 70% LTV amount (bought for £168,500) and hope to secure a good fix deal in the next 2 or 3 months so see us through for a good number of years. Interesting to note that when we do come to renegotiate a new deal that we will have reduced a 30 year term to a 25 year (ish) term in 2 years!