Hypno's kick up the backside debt diary....

hypno06

Right, almost an hour and a half has passed since I last posted. could this be a record :rotfl:

The answer, seaxwyn, to the mortgage question is to include it in the snowball calculator!! Simple and staring me in the face all the time. You can put in the fixed rate period and then estimate the rate that it will revert to at the end of the term, (I have just used todays SVR) and low and behold it does its stuff!

Interestingly though, one of my loans is on a low rate of 3.83% and still has 4 years to run, but because this rate is lower than my mortgage rate, it says to overpay the mortgage and just to let the loan take its natural course! I had not thought about this before - had always assumed that I would pay off all the unsecured debt and then concentrate on the mortgage, giving me my DFD of March 2010.

However this changes things completely!! I have a total debt free date of October 2019 including the mortgage if I keep on snowballing using the amount of money we currently use for debt repayment!!

Certainly an eye-opener and even more of a motivator!

Seaxwyn

Crikey, totally debt free in just over 12 years?? What a wonderful prospect!

I can't really get my head round snowballing the mortgage as well. It seems so hedged around by limitations about how you can overpay - as does my loan.

Interesting though - keep thinking Hypno and keep posting the results of your research. Too right it is an eye-opener and a motivator!

hypno06

I am sure that the calculations are not precise and obviously do not take into account the fact that I will need to change the car and have a holiday at some point, plus uni fees etc if the kids need etc. They also assume that we maintain the current rates of pay which will obvioulsy depend on future earnings etc.

BUT, this morning when I got my mortgage statement in, I had visions of being interest only for so long that I would never be able to afford to repay the capital, and only a few short hours later, I find I could be free of all debt before I am 50!!

So, a motivator if nothing else, and if anything, the light at the end of the tunnel has just shone a little brighter!!

:T Now, better get on and do some more housework!!

blackangeluk

Hi Hypno - my god Woman you sound motivated today!!!

Re the mortgage - I was going to ask on my own thread but thought I'd hijack yours instead. Our current deal ends in October and with the interest rates the extra will be at least £300 a month :eek: :eek: :eek: :eek: Clearly cannot afford this - so I have asked and signed a form (sat next to me on my desk) changing it to interest free on a 2 year fixed deal.

My 2 year plan is save on the mortgage, throw it all at the debts and then in 2 years throw loads at the mortgage - a lot of throwing going around. Didn't know if this was foolish - but otherwise it means DH's payrise will just be swallowed up by the mortgage payment and not much more going towards the debt. Thought maybe in 2 years that the interest rate might be a little more stable as well although my dad told me on Saturday they once paid 20% interest on a mortgage back in the "good old days":eek:

Don't want to get complacent and in 2 years time do nothing, but feel the extra £300 would be better spent on my debt - decisions, decisions

elantan

i'm liking the idea of looking at the mortgage ladies will need to give this one some thought ...ive became very complacent with the debt just plodding along and even getting more into debt yikes ...ive given us till the end of this year and next year i plan on going at it hammer and tongs will be adding the mortgage onto that list me thinks ...how have you been loving the new avatar hypno makes me wanna go there

hypno06

Hi El - hope you had a good weekend away - are you still away or are you at home - I am a bit confused!!!!

My avatar is to remind me that the sooner we get finances sorted, the sooner I can ski more often!! There is absolutely nothing like a mountainside of fresh snow

As for the mortgage, BAUK, I don't think what you are doing is wrong at all. If you think of it as a debt just as any other, that needs minimum repayments when others have a higher APR, then this works just fine. Certainly I have never really thought about this in that way before, but putting it in the snowball calculator made me realise it is debt just like any other, and it has its place in the scheme of paying things off!

Don't really want to edit my debt free date to 2019 though - that seems a long way off, so I have two snowballs running, one for unsecured debt and one for all debt. When I get to the point that I have my mortgage and the balance of the low rate loan left, I will do some sort of jiggling money about on the snowball to reflect it, make an overpayment equivalent to the debt repayment or something like that (brain might be in gear by the time I get that far!!) and will be able to work out what "debt free" really means!!!

Do I make sense No, I didn't think so either!!!

On the housework front - I have done the spare room, both childrens rooms :eek: and their bathroom :eek: :eek: Need to have some lunch now and then might tackle the ironing.........might......only might :rolleyes:

Seaxwyn

Blackangel, I have a bad feeling about this. Don't go onto interest-only until you've had some expert advice (and I count hypno as an expert so that's a start).

I changed to interest-only but I do wonder if it's like consolidation, something that seems to take pressure off at the time but you live to bitterly regret. If we are paying int-only the size of the debt does not decrease and if rates are considerably higher in future, we will be paying high interest on the whole lot when we could have reduced it.

I am very keen to go back to repayment as soon as it seems feasible.

Hypno - what is this thing called 'ironing' that you mention?

hypno06

You are right Seaxwyn, and it does require the same sort of thought as consolidation - are you bunging the "saved" money off a higher rate APR to get it down quicker or are you bunging the "saved" money straight in the "woo hoo we can afford a takeaway and a holiday" account? For me it is the right thing to do, but then a lot of our debt is at over 20% APR whereas our mortgage is at 4.99%, but for others it would be different.

As for ironing.......I read about it on the OS board.....they seem very good at it:D

Seaxwyn

hypno, your post this morning has really made me think and thrown my whole way of thinking about our debt situation into question. We are lucky that most of our debt is actually low interest and I wonder if I am being foolish prioritising the credit cards over the mortgage, which is I think 5.3%. Time to spend some time with the snowball calculator methinks, Thanks so much for that post!

hypno06

You're welcome Seaxwyn - I had not thought about it this way before either.

Perhaps we have had our second LBM today?

:shocked: