WWYD?? DH loan finishing soon

LilacPixie

Sorry for the new thread but I can find my diary... Maybe lack of attention from me has made it disappear... PMSL.

Anyway brief synopsis is I have a mortgage, DH has lots of debt, I dont. The big huge loan DH has is finishing soon so thats £475 a month less we will be paying out. All other debt of his is on a 4.9% life of balance card Our mortgage rate is currently higher than that and won't be lower until mid 2012 and even then it depends what BOE rate is.

So would you want to plow the £475, or a proportion of it into mortgage or would you want to more visual view of seeing the card debt disappear (over 6k).

I also have the added pressure of not knowing if i can actually overpay that amount. Currently my mortgage payment is £703 and I pay 1k, by plowing whole loan amount into mortage I would be paying £1500 a month which would have he perilously close to the 10% a year overpayments depending on how exactly it is calculated.

Oh an my brain is in shutdown mode with maternity leave so I am just confusing myself. Currently we have 101687 outstanding on mortgage

didabuf

https://forums.moneysavingexpert.com/discussion/2868164

babyb06

Not sure what the interest on your mortgage is, but looking at the figures in your post it could be around 6%. Personally, I'd split the payment, half and half between CC and mortgage. I am a worrier and hate debt so would pay off some of CC even though it is a lower interest rate, I'd then put the rest on the mortgage and as it is only half (say £1250 a month) you hopefully won't be near the 10% max of overpayments - can't imagine anything worse than incurring charges after working hard to overpay.

Just my opinion!

cha97michelle

It makes more sense to me to overpay as much as you can to the mortgage until you get to the overpayment limit, then to overpay the rest to the credit card. Then you are tackling two things.

I'm terrible at this though.

It makes more sense for me to pay into my ISA or DHs rather than overpay, but i overpay more than i save. Saving just doesn't please me as much.

sarahevie

I'd pay off the credit card cos I have a phobia of them and hate them with a passion. I can't even bring myself to get a cash back one. I've never incurred a charge in my life as I'm very good at paying the balance off in full on time, however I remember all too well the blood sweat and tears incurred trying to pay of OH's and will not go back there.

As for the mortgage, I'm finding that it is easy to get to the 10 % limit with the halifax. When I decided to pay off the full 10% last year out of our savings, it has meant I have had to wait another 12 months to make an OP. So all this years OPs are just in savings until I get the allowance back in Nov, then my allowance will be wiped out and I'll have to wait another year.

Remember as the balance goes down the amount you can overpay also goes down. Last year I OPed £14310, but this year my allowance is £12000, next year probably £11000 and going down.

quintwins

i would also pay off the creditcards first, what if something happens e.i one of you lose your job or get sick, if that does happen and you've paid that creditcard off you will then only ahev to worry about £703 (or whatever your paying then depending on the interest rate) but if you overpay your mortgage that moneys usually tied in and you could have to worry about thats £703 plus paying the minium repayments on your creditcard, i hope that makes sense thats just my way of looking at things, i'm one of those what if people

LilacPixie

the losing job thing doesn't bother me.. we could survive on 1 salary plus well insured income protection wise..

Sarah you have similar issue to me.I could only op 11k from 10th december and i will have with about £50 to spare come this 1st december. Mortagage balance will be a smidge over 100k so i will only have10k allowance to overpay. Current deal is a 5.99 fix until 1st december 2012.

Matters are complicated further by our income/SOA showing a surplus of £800 after overpayments which we have been using for savings to cover maternity leave. For my own sanity i need to get back to work

sarahevie

What we are going to do is pay Halifax £20 admin charge and cut the term of our mortgage making the payments automatically bigger, but not for another 3/4 years when I can see exactly what we can afford.

I'm acutely aware that the kids are very cheap at the mo, no uniforms, school trips etc which might not always be the case.

The large OP last year was savings accrued over a number of years largely with two full time incomes so not a good indicator of what we can 'now' afford.

OP allowance Nov 11- Nov 12. £12000 have got £9K savings waiting to go this year so will have £3000 left until Nov 12.

LilacPixie

I do other one off payments like the 2 council tax free months plus some other odds and bits would probably tip me over the edge.

Flipping annoying it is..