Sandstone VS Mortgage!

cb4fwh

The first is from buying my house. The second was for the extension that I had built. My mortgage provider sets up a second mortgage account for the additional borrowings, rather than adding to the first mortgage.

I imagine that it has something to do with the extra product / administration fees that they make by doing it this way!

Sandstone

HAPPY NEW YEAR to everyone!

And a belated thanks to cb4fwh and VoucherMan for your replies.

My summary for Year 1 of my mortgage is as follows:

Balance at start of year: £250,000
Total repayments: £54889.80
consisting of:
- Repayments: £19,889.80 (inc. £5455.38 of interest)
- Overpayments: £35,000
Balance at end of year: £200,565.58
Total 'progress': £49,434.42

I'm very excited about breaking the sub-£200K threshold next month. My target was Christmas 2012, so I was one month behind on this target.

When I get back to my spreadsheet calculator, I'll also update on how much I've saved on interest and how much earlier the mortgage term will end.

Obviously, this year was also a little skewed by my savings which went straight into overpayments at the beginning of the mortgage.
Target for 2013 is to bring the mortgage down by £25K, to £175,000.

If I can keep that up, then, tentatively, I can suggest that I might be Mortgage Free by the end of 2020!

Sandstone

I can't believe that half a year has gone by since my last post - it's now just 5 months and a bit until Christmas!

Instead of making any overpayments, I've been saving into my bank accounts this year.
The Santander 123 current account gives 3% interest for balances between £3K and 20K, which is fantastic.
It costs £2 per month, but this is more than offset by the things it gives cashback for, such as mobile phone payments, utility bills and some other stuff. There's even cashback on your mortgage payments, if the mortgage is with Santander (mine isn't).

Compared to my mortgage rate of 2.59%, this looks like a good choice, but once I take into account income tax, well...
according to MSE's calculator, as a higher rate taxpayer, my bank account would have to offer 4.3% in order to be financially expedient. Therefore, OPs are still the best!

Nonetheless, I might have some large costs looming on the horizon and it's better to be safe and have that extra buffer. Unlike some, I can't access my overpayments or enjoy any payment holidays once they're made.

Well, as of today, the balance of the mortgage stands at:
£192,460.16.

And here's a pretty cool poem; it reminds us that failure only exists when we choose to give up.

Out of the night that covers me,
Black as the pit from pole to pole,
I thank whatever gods may be
For my unconquerable soul.

In the fell clutch of circumstance
I have not winced nor cried aloud.
Under the bludgeonings of chance
My head is bloody, but unbowed.

Beyond this place of wrath and tears
Looms but the Horror of the shade,
And yet the menace of the years
Finds and shall find me unafraid.

It matters not how strait the gate,
How charged with punishments the scroll,
I am the master of my fate:
I am the captain of my soul.

(Invictus, by William Ernest Henley).

Sandstone

And yet another 6 months goes by.. time for my bi-annual update.

Well, the biggest thing that happened is that I lost my job.
I won't go into the details, but I made some poor decisions and its not a very forgiving environment. Obviously this has affected my finances, so I won't be making any overpayments until I find another job.
I guess this is a good lesson for the importance of buffer savings.

Anyway, my remaining mortgage balance currently stands at £185,229.
According to my repayment calculator, the current trajectory indicates that this will be paid off by 2024.
Obviously this depends on a number of assumptions, and hopefully things will get better next year.

Wishing everyone a fun-filled Christmas and a joyous New Year.

Sandstone

HSBC have reduced their prices on mortgages, so today I managed to switch from my old lifetime tracker mortgage (2.59%) to a new one (1.99%)!
Based on the outstanding debt of around £180K, this will save me around £80 per month in interest. Since all other terms and conditions remain the same (including unlimited OPs without penalty), there appears to be literally no downside to this.
It's remarkable.
According to my spreadsheets, this also brings my daily interest just under £10 per day (£9.92, to be exact). I didn't expect to reach this milestone for quite some time.
Under the original mortgage, I wouldn't have reached this until late 2016!

So now, the monthly payments have dropped by over £300 pcm!
At first I was confused as to why the monthly payments dropped by so much, but then I realised it's because of all the overpayments I've made since the beginning, combined with the fact that the term hasn't been changed.

I would have loved to go ahead and set those up as automatic OPs but once again I can't do anything until my job situation gets better.
For now, I'm just thankful for what I have.

Sandstone

Haha 7 years later...

I stopped making any overpayments, due to interest rates.

I found Vanguard and have been putting £20k a year into my S&S ISA with them. I also transferred over all of my workplace pensions into one big pot with Vanguard, so they're finally all in one place, and invested in index funds.

The house has under £100k left on the mortgage and on the current trajectory will be paid off within 7yrs.

I took a 3 month payment holiday with HSBC during the initial COVID lockdown last year but, while it was great for cashflow, it also increased the interest portion of my monthly repayment but around £40pcm.

I actually ended up coming back here today because M&S have announced that they're closing all their current accounts, which affects me - it's such a weird announcement because they claim that they're doing it to "focus on online banking" or something like that but how are they gonna do any online banking after they close their current accounts? Credit cards only? If so then they're not focussing on online banking, they're focusing on credit cards. And still weirder because banks use current accounts deposits to finance the lending element of credit card debt books under BASEL regulations, so what are they gonna use instead?

L9XSS

Maxing out pensions was a good thing to do, I did the same thing. Hit mortgage overpayments quite hard for 2008 to 2015 then for the last 6 years put money into my Vsnguard SIPP and employers pension! It’s definately worked as with the tax breaks I’m looking to clear my mortgage at 55.