Newbie MFW

senwar

Hi everyone. Read this board with great interest and finally find myself in a (hopefully) good position, said with a big hope I'm not tempting fate!

Anyway, my journey will start on 1st May when I move my mortgage to FD - I've taken a new 5yr fixed rate deal of 3.89% (wanted the piece of mind of a fixed deal, which I've always had) but reduced the overall term to 7yrs - my current deal will have 10yrs left at the end of April. I bought my current property in 2001, with a mortgage of £103,000 for 25yrs. As you can see, in that 10yrs, I will have knocked 8yrs off by reducing the terms - I've previously taken out new deals on 2 occasions at end of fixed periods. During the years, we've had a couple of home improvement loans, and frustratingly, my new balance as at 1st May will be £97,500 approx. However, I now have a firm goal to pay this off within 5yrs, so by the end of my current fixed rate.

I've decided to overpay approximately £250-£300 per month, and based on £270 a month (so giving me a round monthly payment of £1600), this will pay my mortgage off roughly 1y 4m early. I also have some rainy day savings on one side which I will use to pay the remaining 8 months off IF I manage to keep this up at the end of 5yrs, if not slightly earlier. I've decided to take this course of action as opposed to investing £250 a month in funds - as I feel this will benefit me more.

Over this time, I expect/hope to be able to overpay more at some periods too - so see the five years as definitely achievable. Just hope the climate doesn't cause any issues over this period, but I'm confident it won't.

So - here I am. I'll post an update as soon as my mortgage kicks into life and I know the exact balance etc.

Onwards and upwards - and thanks for some great info on here!

wynnvegas

Best of luck Senwar.

Cheers,

Billy

originalmiscellany

Welcome aboard
All of us start with a lightbulb moment, and when i started, I just read a lot on how to save money. It's amazing how quickly ( a few months) your habits can change, and how lots of small savings really do add up.
If you're brave, post an SOA, and people will highlight potential oversights in terms of savings you could make in your budget, and keep posting here, and you'll be well on your way.
Every time you overpay, post on here, and in your signature to build up and record how you're being aggressive in clearing your debt.

But once again welcome and enjoy yourself!

senwar

Thanks for the welcome!

originalmiscellany wrote: »

Welcome aboard
All of us start with a lightbulb moment, and when i started, I just read a lot on how to save money. It's amazing how quickly ( a few months) your habits can change, and how lots of small savings really do add up.
If you're brave, post an SOA, and people will highlight potential oversights in terms of savings you could make in your budget, and keep posting here, and you'll be well on your way.
Every time you overpay, post on here, and in your signature to build up and record how you're being aggressive in clearing your debt.

But once again welcome and enjoy yourself!

What's an SOA (please excuse my ignorance).

My lightbulb moment really came last year when I took voluntary redundancy. Things really worked out well and I'm now back in permanent employment with a great employer (actually went straight into a contract from redundancy then at the end of that secured a permanent job so been VERY lucky!). Decided to work hard and get this paid off then don't need to worry about work then onwards (possibly!). Would also see me paying it off by the time I'm 44, and given the house has more than doubled in value, that will be a nice feeling.

I'm also currently saving a bit on the side too on top of my ISA and stocks - pay £50 a month into a 30 day notice account although this is just for xmas time really and currently paying £100 a month into FD's 8% savings account.

Can't believe how much I've changed my outlook on things though. I've always been a buy now pay later kind of person - not anymore!

museumworker

Hello and welcome senwar! I was also one of the lucky ones getting the 5 year fixed mortgage for fd from 3.89%, they pulled it a day after I spoke to their adviser on the phone so was really happy I managed to get in there!

With this deal there is a penalty however for paying off the mortgage in full within the 5 year period, so be careful you don't take too much off the term!

senwar

museumworker wrote: »

Hello and welcome senwar! I was also one of the lucky ones getting the 5 year fixed mortgage for fd from 3.89%, they pulled it a day after I spoke to their adviser on the phone so was really happy I managed to get in there!

With this deal there is a penalty however for paying off the mortgage in full within the 5 year period, so be careful you don't take too much off the term!

Its a great product isn't it. I actually applied for mine in November, as you could apply 6 months in advance. Well happy I did.

I'm happy with the closure penalty to be honest (2%) but doubt i'd pay it before the end of the 5yrs anyway. Will hopefully be the month after the end of the fixed term.