Overpayments - HAPPY !

967stuart

Me and my Wife worked really hard last year and managed to overpay our mortgage by £3000.
Just gone to renew our mortgage and they said that in effect the £3000 overpayment has knocked a year off !!

Only 25 more years to go lol

Will be working extra hard again this year and will overpay as much as we can, my goal is to have it paid off by the time im 45 hopefully (Im 29 at the moment).

Wish I had known about overpayments sooner! , really is the way forward, every little bit helps, even a tenner makes a difference in the long run.

Im stunned at some of my friends who refuse to see the logic in making overpayments ...... even more stunned at some of them who are financially better off than us going onto interest only mortgages! ouch !

Twiddy

Well played Stuart, we see the same going on, our friends find it "strange" to pay extra on the mortgage and I sometimes feel we're the minority. If you counted up all the people on this forum alone who overpay, I'm pretty sure we're not the minority.

Keep up the good work mate, might sound like a long way to go but that will become nearer with every overpayment you make, even them tenners!!

Cheers
T

sweetdaisy

All the best with your plan to be mortgage-free .

I have started making a monthly overpayment of £59 - it's not much but it's a start, beside we have an Offset mortgage so we offset one current account and 3 savings accounts against the mortgage.

You will find that some people often act surprised when you tell then you are going to overpay and some will be jealous, however it's great to post on here as everyone is supportive .

lizzywig

I'm going to ask a really dim question. How do you go about overpaying on your mortgage? We have a direct debit set up so I wouldn't know how to start giving them extra money. Any advice?

sweetdaisy

lizzywig wrote: »

I'm going to ask a really dim question. How do you go about overpaying on your mortgage? We have a direct debit set up so I wouldn't know how to start giving them extra money. Any advice?

You can contact your mortgage provider and ask them if you can increase your monthly payments/make a lump sum. However, some providers will only let you overpay a certain amount. We have an Offset Mortgage so we can overpay as much as we want and there are no penalties for overpaying. It all depends on the type of mortgage that you have.

lizzywig

sweetdaisy wrote: »

You can contact your mortgage provider and ask them if you can increase your monthly payments/make a lump sum. However, some providers will only let you overpay a certain amount. We have an Offset Mortgage so we can overpay as much as we want and there are no penalties for overpaying. It all depends on the type of mortgage that you have.

Ah ha, thanks, I'm definitely going to get in touch with them to find out more!!

967stuart

Thanks guys and girls, feels great to able to make a little dent in it.

Im very lucky that my wife is very strict with me (Im 29 and on 'pocket money' lol) , she is in charge of the finances and is determined that we will will get our house paid off asap.

She has one of those spread sheet calculators that you put in your monthly payments and its works out the interest etc and shows exactly just how big a difference paying as little as a tenner can make in the long run.

*Lizzywig* - as said, give them a bell and find out what you can overpay each month, mine was a limit of £499 per month. (think it normally works out at 10% or something like that)

I was paying close to £1100 a month (£850 of which was interest .... so really I was only paying £250 off the capital) so £250 x 12 months = £3000 (so basically when overpaid a further 3k we saved ourselves 1000's in interest).

So worth doing (providing your borrowing rate is higher than your savings rate)

Queen_of_the_Hive

Hello Stuart, your situation sounds the same as mine! We also overpaying by min £3k per year. Only made one overpayment so far however having experienced overpayments in a previous property its fantastic!!

CathT

Good luck. I'm also 29 and hoping to be mortgage free before my 40th. I 'think' it can be done!

headoutthesand

Over paying is a great idea and I've always done this since I first got a mortgage in 2004.

I only round it up to the nearest £100 or £50. At the moment I only pay an extra £13 a month to take me from £287 to £300 but it's better than nothing.

I have the same reaction from friends who had their mortgage drop by £200 with Northern Rock. Their house was in negative equity by a good £15000 but they didn't overpay, just used the money for luxuries

967stuart

Thanks CathT, I'm sure it can be done too, just means being smart with money (or my wife being smart for us lol).
Our long term plan is to have everything sorted by the time we are 50 so we can sell up and get a little place down by the coast and get little jobs to keep us ticking over (and hopefully have some saving too) ... not sure if that will pan out, but its nice to have something to work towards for now.