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

Tony_R

It's been a busy week or so.
Finally got the new boiler installed last week, along with a Nest Thermostat, perhaps unnecessary but it really is good. The heating can be controlled via an app on the phone and it learns the heating routine to run more efficiently. While its unseasonably warm we won't see many benefits yet. The old boiler really was knackered, so its great having hot water on demand, rather than waiting a minute for it to warm up and then randomly cut out.

We've also spend the last week or so painting the back and front of house, and put up new guttering. Rather than paying someone to do it, which I guess saved a bit. We were quoted about £700 to get someone else to do the painting. It looks really nice, and I'm quite proud of it. It makes the house look dramatically smarter.

In the last week we've also been applying for the new mortgage and today got the offer through, which will take effect from the 1st July.

The interest rate will drop from 4.99% to 2.59%, saving about £200 a month in interest, obviously which will be added to any overpayment. Although this is an offset mortgage, so it'll be offset instead.

I should be making the latest OP in the next couple of days too. Last month I paid it a couple of days too early, so it didn't take into effect the regular payment on the confirmation letter.

It looks like we are moving offices later in the year, for me the distance is practically the same, but it will be in the opposite direction, down country lanes, instead of heading towards London in gridlock. I'll have one of the easiest commutes, others have quite horrendous commutes, but will be compensated financially for it.

Tony_R

April overpayment made, £755.

Luckyinlife

Wow well done nice over payment :]

well done on the new deal as well good job bet you feel much better :]

Tony_R

Latest overpayment made, which was £760. That should be my last overpayment on this mortgage, as this and next months normal payment will take it the mortgage balance below £150,000, which is what the remortgage is for, which starts on the 1st July.

That's an offset though so instead of overpayments we'll just stick in savings.

We have a bit of an ambitious plan of putting around £50k of savings straight in, which reduces it to £100,000. We then plan to put at least £1,000 a month into the Offset, which is basically the same as now as the regular monthly payment is £200 a month less.

Hopefully, if things go to plan in just under 5 years we'll have the same in the offset savings as we owe on the mortgage. Which means we'll be theoretically mortgage free. We won't pay it off, but the offset can pay for itself. A little ambitious admittedly, but it will be interesting trying.

Tony_R

The remortgage completed on Thursday. The old rate was 4.99% and now its 2.39%. Meaning the regular monthly payments are now just £792. Before when we were on the higher rate, and before we started overpaying we were paying £1173.

We have no payment this month, we have a month off, and a bigger one next month.

The mortgage balance is now £150,999. So exactly £50,000 less than when it started five years ago.

Now to start putting money in the offset (once we get the login details).

Tony_R

So the new mortgage is all set up and we've got the log in details. The old mortgage overpayments were made over the phone, but this one has internet banking which will make it far easier, and probably more addictive.

Plus the offset account actually tells you know many days the mortgage will be paid of early which should give some motivation to increase payments

We've made a few test payments (including the cheque we got back from the last mortgage company) and we've got just over £4k in there at the moment. Hoping to transfer transfer a lot more in over the next week or so.

Whilst I was happy just overpaying before and not being able to get the money back, with the offset we can chuck a lot more at it than we wouldn't have risked before.

I'd better think of new signature.

Tony_R

I've not updated this for three and a half years. I stopped as we switched to an offset mortgage and weren't doing overpayments as such, but putting money in an offset and I don't get the monthly overpayment letters anymore

Anyway, currently the Mortgage is down to around £122,000 now, and we've got £80,000 in the offset account. So really we only owe £42,000. Hopefully in three years it'll all be paid off.