saving £100,000 ten years to utopia !!

gecko

First mortgage for me but got a fixed rate at 4.39% over 5 years as I thought the rates could be volatile but have lost out compared to trackers over the past few years

Looks like we are keeping low rates for the forseeable future unless inflation starts to get out of control.

somethingcorporate

I've enjoyed reading your thread (as I posted on the first page over a year ago!).

Still going really well, I think although you don't really feel the benefit of overpaying your mortgage in the same way as you see your savings climb you will notice the benefit in the end.

What we do is every time we log in to online banking is round all the accounts down to even numbers and dump the surplus into the mortgage. It adds up, it'll be a good few hundred quid a year extra over-payments and is also cultivating a nice OCD for my wife!

You'll find yourself aiming for mortgage values (rather than savings values) and we rejoice every time the mortgage ticks down another £1k.

Good luck and keep up with the good work!

Catslovelycats

I've enjoyed reading this thread and also struggle with the save/OP dilemma. I do a bit of both. I will have managed to reach the £5640 limit on my ISA this year by end of March but won't manage that again, so I have decided I will still save a little each month (as I want to have money to hand if I need it) but put most of my spare cash into OPing.
Good luck with your journey!

streethack

I think you are correct somethingcoporate I guess im in moarning for the security that having £50,000s in the bank gives. My wife never understood why I wanted to save rather than O/P saying we will find the money should the worst happen. She is happy now seeing the capital come down. Either that or she thought I was squirrelling it all away to do a runner one day?

Cant bear to give the banks my money and them giving me 2% back. Dont see much changing for along time in that respect. Can you give me an example of your even number scheme I like the idea of it.

Thanks all for the words of support.

streethack

I’m a little bit bamboozled by this over payment stuff as my maths isn’t great. Plugging the figures into excel spread sheet found here I couldn’t work out why my figures were always so far out, My mortgage amount is £158,513 fixed for five years at 3.89% which going by all the calculator’s I have used comes out at a figure of £827.09, yet my monthly charge was £835.98. After a lot of faffing around with different people on the phone it seems that my monthly payments are based on a estimated mortgage amount of £160,000 and that any extra would be over paying the capital. Going by the figures they have told me I have been overpaying by £7.46 per month since the start of the term.

Here’s the thing on £160,000 over 25 years fixed at 3.89% for the first five years I get a figure of £834.85 I know we are only talking a difference of £1.13 but it’s the way it was explained the me that I’m not happy with. Basically they are saying it’s because the for the first two months I only made one payment due to the timing of the transfer but how would they have known that before even the mortgage was drawn down. Also they said that calculator don’t take into the account days of the months so this may explain it???

So when I asked for a figure of how much I overpaid since the start of the mortgage they were unable to give me that amount but said it would need a specialist to look at it and sending out breakdown of overpayments information would be charged at £10.

Am I just going a little to crazy here, what has money saving expert done to me.

Matt_The_Chippy

Its an interesting read here, the balance is dropping nicely.

Thought I would offer my tuppence worth on the mortgage side of things. I wonder why there aren't more overpaying people with Offset mortgages? The lady in the bank said it was very rare for people to take one out with them. To me, it does everything needed to OP and service the mortgage as you need. Some say about building up an emergency fund before starting the OP's. No need with the Offset as you can withdraw money from the savings with a days notice. So more of your money is working to cancel out the bank interest. Speaking of interest, you get paid interest on your savings at the same rate as the mortgage. Mine is 3.49%, I would struggle to get that in a savings account. As my mortgage is a tracker, any increases will help the savings pot. In the future I want to have enough savings to match the outstanding mortgage, thus pay no interest but to be paid to have my money there.

Is this a product that could help you out?

streethack

Hi MTC

Yes thinking back now an offset would have worked perfectly for me, I guess im just confused as to how the offset works, currently I have a sole account, joint account, bonus saver and a E saver. I have these so I can sort through my money. For instance I will put money into my bonus saver for decorating my little girls room not really interested in the interest but opened this account to store money away from my current account. Is it easy to do this with an offset? can you create virtual pots for you wages, savings, insurances ect?

If so I think I will have to look into an offset once my fixed term ends as I have lots of monies in different account just so I can keep track of various things. Having it all lumped into account im not sure how I would do this?

Matt_The_Chippy

I'm able to transfer money across in branch very easily or canbe done over the phone. I'm not too sure about the virtual pots side of things. I just lump all the money into the one savings account that sits side by side with the mortgage. You could keep a spreadsheet at home to allocate money for different causes.

gallygirl

There are some mortgages which do have multiple pots - I'm sure the Woolwich used to have one? But assuming you are fairly organised, a spreadsheet can do the same. I have a savings account with 12 virtual pots, having between £8.50 and £243 allocated to them each month.

streethack

It would appear that I have inadvertently been overpaying my mortgage by £7.46 since the beginning as my payments were based on borrowing of £160,000 instead of £158,513. Have sent First Direct a message to see what my total overpayments are since the mortgage began.

Anyway have just overpaid another £500 bringing the total to £144,840. So by my reckoning I've overpaid £6514