Countdown to Freedom

Tilly_MFW_in_6_YRS

Afternoon all, taken dinner out of the freezer as Wednesday evening is a busy night. Billy, you are planting too many ideas in my head, build a house, B2L. I so thought I wanted a simple life, clear the mortgage and then relax, but my inner voice is definitely muttering to me.........I so love a plan.

Now to business - I am struggling with understanding something:-

If in March 2012 we remortgaged for 10 years still over paying and clearing in the 6 year window we would save £xk on interest.

OR

If we remortgaged over 15 years and continued the overpayments to clear over 6 years are we any better off?

Our plan is not changing it's just that neither I, nor my DH can get our heads round whether it makes a financial difference or not. Our aim is to stop the banks getting more of our cash.

If someone can explain this in simple terms I would really appreciate it. Thanks

lulabelle1

Interesting question Tilly, I have wonders about this myself so will be looking out for posts/feedback........

Thanks for the tip about the COD MW game, unfortunately my DH pre orders and queues outside of the blue and red place at midnight so he can be one of the first to pay the game!

Apparently he got some sort of good deal as they had a special offer on with the live points or something or other......

dimbo61

If you take a 10 year term then you "HAVE " to make that mortgage payment every single month no matter what happens in your life !!!
If you take a 15 year term you have a smaller monthly mortgage payment and can then chose to overpay ( if allowed!!) as much as you can afford
Thats the joy of an offset mortgage !
When we reduced out mortgage term we had a Few £K sat in the offset account so could cover the extra mortgage payment even when I did no overtime/xmas/holidays.
Dipped into offset pot when needed and paid extra in when I had a good month.

unhappy_shopper

Tilly_MFW_in_6_YRS wrote: »

Now to business - I am struggling with understanding something:-

If in March 2012 ..............
OR

If we remortgaged over 15 years .................

If someone can explain this in simple terms I would really appreciate it. Thanks

If you adapt Locoblade's mortgage calculator to your mortgage choices, you will get a much better idea. It is quite easy. All you have to do is play around with the figures in the first page and the spreadsheet will tell you the projected mortgage payment, interest and a million other things. HTH.

https://forums.moneysavingexpert.com/discussion/1157173

Tilly_MFW_in_6_YRS

That's an excellent idea, I will do that in a while. As my brain was struggling with the logic of this, seeing it in black and white is a much better approach.

Good luck to all on their journeys on armistice day.

Tilly_MFW_in_6_YRS

Received FD financial incentive for switching bank account so that's going into the savings pot. I have been looking hunting to identify the best instant access account so will head off to Nationwide tomorrow to open an account. Only 3.12% for the year but a least it's heading in the right direction. I need to take the same approach with my financials as I do to my food planning, strange that one is easy to do and the other so challenging.

Have to jump off now and get back to work but will be thinking of you all when wrestling with the 10 vs 15 year challenge. I have a very positive feeling though and look forward to letting you know the money we will save clearing it I'm 6 years.

lulabelle1

I've crunched a few numbers and according to my calculations it makes no difference whether you make overpayments to reduce the term or just start out with the term you had in mind in the first place. In other words, if you plan to make overpayments that will reduce your term to say 5 years or just take the mortgage over the 5 years with no o/payments - the amount paid works out to be pretty much identical.

So, I will just overpay I think, then at least this way I can have access to the money just in case.....

Tilly_MFW_in_6_YRS

That's our decision made. We are going to remortgage In March '12 over 15 years but put £4,500 into offset for just the mortgage with a further £1200 per month into offset for bills so that it can sit offsetting for as long as possible etc. I need to understand whether FD operate a sweep system so i will check that out today. We will start to look at transfer of ISAs next year and then see how we can build up the tax free safety net.

It will be a huge relief to move but it has changed the way we live already. I am so grateful to all of you on this site, the inspiration, determination you have shown has kicked me up the rear, and thus enabled me to get DH on board. Thank you.:)

Tilly_MFW_in_6_YRS

Missed out the rest of salary: this will sit in the current account, offsetting rather than the above which will sit in savings accounts but being offset. I need to see how this will work in reality but we are now in the 4 month window so not long to go now.

By end November we will have no outstanding credit card balances either.

Tilly_MFW_in_6_YRS

One last thought we currently have mortgage protection insurance which costs us £85 each, per month, once the mortgage has gone thats money back in the kitty.

Billy's BTL plan is pretty tempting......