Is POYM the best strategy for everyone?

nrsql

That does look quite good.
Doesn't show the t's and c's on the site though.
You should maybe think about comparing with shorter term fixed rates and think about taking the risk as to the rate when the fix expires.

Dithering_Dad

But the mortgage will be gone by the time the rate changes after the 10 Yr fixed period expires

nrsql

And even if it isn't £140,000 might not be considered much of a mortgage and easily affordable.

comping_cat

However, I reckon that it was good advice to build up a little nest egg or 'emergency money' as Sloppy calls it. What I don't want to do is spend the best part of a year saving it away and not touching the mortgage. I'd really like to offset it against the mortage but I've heard that these are quite expensive - though my rate isn't so great at the moment anyway. I think Catowen mentioned in the DPOYM thread that she had northern rock pension that she could pay into and get her money back without strings attached if she needed it. Does anyone know if this the case? (the strings attached, not if Catowen said it)

Hi DD, havnt read all your thread yet, but thought i would explain what i have, and my plans to be mortgage free.

I have a pension with the Scottish Widows, and also a small work pension that i paid into for 8 years when i worked for Lloyds Bank (i know its a bank, but i was young!!!), so my future (hopefully) is covered there. I have a savings account with 2 months mortgage payments in, which im not planning on increasing, the reason in a minute, and also a mortgage protection policy, that will pay out if i die, or become seriously ill, so these should cover anything in the present. I then have my mortgage with the Northern Rock. It is a fixed rate (4.99%) for another 3 1/2 years and i am allowed unlimited overpayments. There is NO CATCH, i can overpay however much i like, whenever i like, and the reason i am not aiming to increase any of my savings is because i can borrow back any of my overpayments (minimum £500) whenever i like, and once i put my request in, it will be in my bank account within 48 hours (except weekends). This means if i have any problems where i need cash, i can borrow it quickly and easily. Its also out of reach for 'frivolous' things, and if the worse did happen, and i needed to claim benefits (fingers crossed this never does), its not classed as savings, so i wouldnt be penalised this way.
As i feel, i have all bases covered, i have a mortgage pig, and i put any spare money into my mortgage, as not only is it a form of savings, its also going to make me mortgage free ASAP.
If you have read the mortgage pig thread, you will also see that its not about doing without, its about putting spare cash, or money you have saved by either not doing something, or saving by getting something cheaper than expected or by using vouchers etc. Anything that isnt budgeted for (we are also saving for a holiday at the moment) and is spare is put into my mortgage.
Hope ive explained that ok, and maybe helps!!!!

comping_cat

No, i dont work for the Northern Rock, i just think i got a really good deal, it def suits me!!!!
My computer came down with a virus, which is why ive been 'absent' from your debates!!!!

comping_cat

SloppySaver wrote:

well I'm glad you have got your PC sorted because you were one of the two "beacons of good sense" that shone on the Dont POYM and the equally excellent "Sloppy is great" (or whatever that was called) threads. I was the other one.

Everyone else had to stoop to nasty comments to argue against me while you stood by your convictions and then had the good sense to abandon them and agreed with everything I said like a proper female should. Well done Missy!

Cheeky!!!! Never abandoned my convictions, just put my views on what people have been posting, and im sure i dont agree with everything you say (like a proper female should!!!). Im a great believer in people doing what suits them, which isnt always what i think, what is right for one, might not be right for another and as long as someone is happy with their decisions, then that is good.
Nice to be a 'beacon of good sense' - dont think ive ever been called that before!!!!

nrsql

Ignore it. Looks like this is dropping into a personal comment thread again. Shame people can't stick to an objective arguement rather than bringing in emotional language and sniping.

Dithering_Dad

I dunno, a bit of banter is nice - makes the stream a bit fun. As long as it doesn't turn into a slanging match it's fine by me.

I posted off my Stakeholder pension to Cavendish Online (it's recommended by this site, so it must be good). Thanks Sloppy, I didn't know about the 200 quid thing. I've upped my contribution slightly and the Annual Management Charge is down from 1% to .5% of my fund value (not that I have much of a fund at the moment!) - without any sort of haggling. Over the next 20 years that reduction will really make a difference (I hope). Dithering Mum might even get her current stakeholder transferred to Cavendish to get the same sort of deal. It will be nice to be sat in front of the fire when we're old and grey and not be worrying about how extortionate British Gas is!

My next step is to flog my endowment. I've seen an article on Fool.co.uk (another great money site) which gives advice on getting the best price for an endowment. Hopefully this will be as painless as getting the stakeholder. It'll be great to just not have that shortfall hanging over me any more.

MUSTBEFUNNY_2

Let us know how you get on with the endowment...

RufusFrog_2

I thought I would go back to the original question...

Don't pay off your mortgage if:

1) You can't afford the overpayments (pretty obvious really) or the lifestyle it will reduce you to will make you really miserable
2) You got a fantastic long term fix in 2003 or you are a BTL/stockmarket wiz and can easily get a higher return on your savings
3) You want to start a business (they nearly always need capital in the start-up phase but beware of losing your house if it fails)
4) You love your house's location but it's just too small, save up (even remortgage if you can afford it) for an extension instead
5) You are afraid of losing your job in short-medium term and want to have a cushion to fall back on
6) You haven't yet considered how you will be funding your retirement
7) You hate your property - you'll need that money for moving expenses

Any others?

With regard to no. 5), can I play devil's advocate? If you think you are about to lose your job (in a one-salary household), quickly bung ALL your savings onto your mortgage and then you'll be able to claim lots of means-tested benefits...