First step, in the long road to being mortgage free.

Tony_R

We bought our first house in July 2010, and being intially quite clueless about buying a house this forum was quite useful in helping me out. It was reading this forum that gave me the idea of being mortgage free, so I thought this would be a good place to keep a record.

From the even before buying the house, the idea was that we would overpay, but we didn't start straight away due to

a) Wanting to build the savings up a bit.
b) Having to buy furniture and appliances from scratch.
c) Getting new windows installed and general work on the house.

Neither of us have any debts whatsoever (apart from little thing called a £200k mortgage), and I'm personally very adverse to debt due to my parents having financial problems when I was younger and never owning their own home. While I love them to bits, that probably pushed me to being the first person to go to Uni in my family and owning a home.

Anyway the mortgage we got was for 75% off the property value, along with fees the balance as of July was £200,999.

The mortgage is with the Post Office at 4.99% fixed for 5 years, which allows overpayments of 10% per year. It doesn't reduce the term of the mortgage but reduces the payments. As we shouldn't be anywhere near 10% per year for the 5 years I'll just increase the monthly payment to make up the difference.


Anyway to summarise.

Balance as off 15/07/2010 = £200,999
Regular Monthly payment = £1173.85

First overpayment was made today of £500. I hope to do that every month, which would bring the mortgage down to 14 years. But it will probably be once every two months.

Joint income is around £65k.
I'm also starting to work one evening a week doing three overs overtime, which will give me about £120 per month towards overpayments.

I just realised that rather detailed, so sorry if it bores anyone.:eek:

RunningGirl

Welcome to MFW world Tony!
Your overpayment amounts look great.:j
Good luck with your journey - will keep watching!

MartyBoy

That's a great summary. Good luck on your journey!

Froggy-G

Good luck on your journey Tony!! :j

Tony_R

Thanks. When I get the letter confirming my overpayment and outstanding balance i'l update the signature.

As I said in my first post I started doing Thursday nights as overtime which is basically not doing a lot and being here in case anything happens, which it never does.

I think someone is thinking about cutting back on the overtime, as they do three nights, so I might do two nights a week which will be around £240 a month extra after tax.

lincoln-potter

Hello Tony and welcome to MFW boards!

you have a very similar mortgage figure to myself so it will be interesting to keep tabs on your progress

Good luck!

katsu

Great to have more 6 figure mortgages - especially when they are bigger than mine I'm down at 130 but if you make a big dent in yours you'll wizz past me in no time

Welcome to MFW

Tony_R

I didn't quite realise just how much interest would be saved by my one £500 overpayment today.

I discovered this spreadsheet, which i'm sure people already know about.

https://forums.moneysavingexpert.com/discussion/1157173

But, by paying £500 today I'll be saving £1,168 in interest alone, which is roughly a month already.

I think this overpaying lark, may become addictive.

hillcats

Addictive it certainly is... we plug away !

kiran83

well done in taking the first step Tony! Keep up the good work!:j

Tony_R

Today I received confirmation of our first overpayment, our current balance and the new monthly monthly payments.

Our payment will reduce each month, due to the term not being allowed to reduced.

To counter that instead of paying the regular of £1170.89, we'll round it up to £1200 each month + another £500.

Oh yes, i've created a signature with the details.