Its time to grow up and pay off the mortgage

slowlyfading

25% is great :j :j

OS_QS

I was wondering if anyone could help me – I’ve been thinking (could be dangerous!)

When we first began overpaying, I informed the mortgage provider that I did not want my term or my monthly repayment to reduce. I wanted the ability to drawback the funds should we need to (effectively using as an offset) nor did I want to keep changing our OP standing order each month to incorporate the difference in any previous overpayments had on the recalculated repayment figure from the mortgage provider.

However, if my repayments are as per the original term, and not updated to reflect any overpayments, surely these monthly repayments will have a form of OP contained within? Are we effectively paying more than we need to within each month’s repayment as we opted not to reduce to reflect the recalculation?

Does that make any sense? Or am I totally misunderstanding something basic?

OS_QS

Was waiting for me when I got home from work. Relieved to see the overpayments listed at the bottom of the page, ring fenced with a statement about borrowing it back should we need to Seems i must've made a few random OPs in December as my "overpayment reserve" is sitting at £5,059.12 for 2012. Which is a touch over what i had recorded on here (£5051).

Musing about if I am right about my last post, then my selection of keeping monthly repayment the same may not be the most advantageous for us, as although the overpayments are coming off the capital, they're not being kept safe in the borrow back pot, incase we need access to that money at a later date.

Might go change the OP preferences online for a few months and see what happens next month as an experiment

OS_QS

£9.20 spend in aldi including the 'Souper' 6 (stocked up on their 49p butternut squashes)

£142 so far on groceries. Must remember jan is a 5 week lunch, so don't think my spend is too bad!

Went for a browse in the shops after work and did heaps of checkins :cool:

Calfuray

OS_QS wrote: »

I was wondering if anyone could help me – I’ve been thinking (could be dangerous!)

When we first began overpaying, I informed the mortgage provider that I did not want my term or my monthly repayment to reduce. I wanted the ability to drawback the funds should we need to (effectively using as an offset) nor did I want to keep changing our OP standing order each month to incorporate the difference in any previous overpayments had on the recalculated repayment figure from the mortgage provider.

However, if my repayments are as per the original term, and not updated to reflect any overpayments, surely these monthly repayments will have a form of OP contained within? Are we effectively paying more than we need to within each month’s repayment as we opted not to reduce to reflect the recalculation?

Does that make any sense? Or am I totally misunderstanding something basic?

Hello!

Butting in to your thread as this made me ponder.

Technically, that money is not being applied onto the mortgage, but is merely sitting there ready to be taken back by you at any point. So in the meantime, your monthly payments and term are not being changed.

So, I suppose if you got towards the end of your mortgage and had 10,000 left to pay, and had a reserve of 10,000, at that point you could decide whether to take that money back and keep paying monthly, or whether to actually apply it onto the mortgage, and end it early.

Right now, with the reserve that you are building up, you are not applying it onto the mortgage. If you were, like you said, you would have the choice to end the term early, or to recalculate your monthly amount, which would decrease.

Pretend you are paying 300 a month, and you have 10,000 reserve. If you decide to apply that reserve to reduce your monthly payment, lets say it goes down to 200, but you have no more reserve.

So that big ramble was to say that if you have no intention to take back your reserve, and you were going to use the OPs to reduce the monthly amounts rather than the term, then yes, technically you are overpaying on the monthly.

Does that even make sense? Or have I grasped the wrong end of the stick and explained something in the worst way possible?
Oh dear, off to bed for me

OS_QS

Thanks Calfuray! what you said makes sense, and I'm glad you posted as it wasnt something I had considered. So going by your explanation, I think i'm doing the right thing then, as if I were to opt to reduce my monthly payments, then I would lose my reserve (as it would be paid directly off the mortgage balance).

excellent stuff as we might need that money at some point. Or if we ever move, it would make sense to draw back the reserve and port the cheap rate mortgage to a new house.

cheers again

Calfuray

Oh good

Yeah, you can't have reserve + reduce monthly unless it's an offset mortgage.

Glad my rambling helped!

OS_QS

Quidco pay out of £3.55 paid straight to mortgage this morning.:D

Had a very early start this morning to travel the length of Scotland for a client meeting. 6hrs travelling for a 2hr meeting. Luckily I wasn't driving, but at parts the weather was shocking. One lane, slow going on the motorway, I'm glad to be home but I'm absolutely shattered from concentrating on the road too!

Got a new fitness class to attend with OH tomorrow. Usually go to classes with female friends, never with OH, so heres hoping it will be fun.

Roll on payday!

OS_QS

Urgh, can't believe its still January!

I've totally plateaued with the weight loss. So clearly need to up the exercise. Speaking of.... I thoroughly enjoyed Saturdays class with OH, but my poor legs are suffering. Still.

It's blowing a gale out there, really glad to be in cosy and safe, particularly as I got drenched in a freak rain/hail shower on the walk home :eek: never seen anything like it.

OS_QS

Just used Sains brand match to my advantage by specifically paying for my toileteries separate from my groceries. Even the checkout operator did a double take. Spend £22something and got £10 brand match voucher, which I then spent on my groceries that were next in line! first time I've done that, and I'm glad too as my groceries were '£6.92 cheaper', so had I put it all through together, I'd only have saved £3.08!!!!

I'm not logging these groceries as jan, as they will mostly be eaten in February, so around £30 (will have to check cc statement as I've binned the receipts)

Also bought some stuff from boots (all on offer) with a bonus points voucher so this year have spent circa £40 bulk buying toiletries on offer, so we should be good til summer! Had to do it as I'd run down the toiletry stash to the bones! Now need to find Aussie. Volumusing on offer and i will be sorted:p

Just to find uses for the partially used fancy smellies. I have sensitive skin, so try something then find out it doesn't work with me. Feel real guilty throwing them out, but they're taking up previous space!