Quest To Pay Off My 150K Mortgage in 3 Yrs!

cupid_s

When we get jobs we'll get a 0% credit card hopefully to do exactly what TYAE has suggested. Currently we use our (usually mine) normal one for everything and leave the money we would have spent in a our current acconut (it does pay about 5% though and has the advantage of not being tied up) until the bill needs paying. We end up with about an extra £12 a month interest between us on our current accounts. And then in January they gave me £19 cashback for nothing (I didn't even know my CC had cashback). It's about £170 a year for nothing.

Being students we cannot currently get any other credit cards apart from the one with our bank account. Despite having had a mortgage for 2 and a half years and having credit card(s) already, and never having missed a payment on either :mad:

Dithering_Dad

cupid_stunt wrote: »

Being students we cannot currently get any other credit cards apart from the one with our bank account. Despite having had a mortgage for 2 and a half years and having credit card(s) already, and never having missed a payment on either :mad:

I can beat that! I've been refused by Virgin for their 0% card, despite having had a mortgage for 12 years and several credit cards, personal loans, additional mortgage borrowing for 2 extensions in that time (and no missed payments) AND a job that will potentially pay over 120k a year!

It seems that you say "Self-employed" to a bank and they hear "Self-unemployed". I am now a financial leper!

TallGirl

Thank you for the advice regarding credit cards. I think I shall put all our spending on it (every day as you wisely said) and then pay min payment. I will not open up an ISA as we have an offset mortgage so the money may as well get put into a pot in that. Hope that makes sense.
Credit rating and credit scoring is a mystery I have been OK so far but when I first moved to the country I had no luck and now they are throwing it at me.

Miss_Penny_Pincher_2

I've been using 0% egg card - only got it for the £15.50 cashback from quidco but then decided to start using it as the cashback on my main credit card had dropped to 0.5%. I'd recommend it as had no problems. Need to check when it runs out though as I don't have a clue and think it's only about 4 or 5 months interest free!

Please can I join in the quest too? It would mean more oestrogen being added though although I am under 6ft

My aim has been to try to pay the mortgage off in 4 years from now by building up savings and overpaying £500pm to reduce our mortgage to £45,000 when the fixed-rate period ends in April 2008 and then take out another 3 year fixed-rate mortgage which also allows say £500pm overpayments. Do people think this is a good option? Mr Pincher just agrees with what I suggest and I'm worried I might be totally missing the best option.

Currently our mortgage is at £86,700. I have been doing my sums though and have calculated that by March 2010 to achieve that aim I would ideally need to have my mortgage capital down to around £22,300 left so that would be my 3 year quest to enable mortgage free in 4 years!

I'm surprised at the amount managed to offset over past year - a lot of it is joint savings we already had and it's only earning 5% though and it's not available to put towards mortgage without some hard persuasion!! Total comes to £27,300 making our current mortgage £59,400! I'm surprised at that!

ThankYouAndEnjoy!

Hello Miss Penny Pincher

Welsome to the thread, and to the quest.

Miss_Penny_Pincher wrote:

I'm surprised at the amount managed to offset over past year

Have you got an 'offset mortgage' or do you just mean total mortgage less total savings? If you have an offset mortgage then i would plough £500pm into offset account until mortgage=offset current account = no interest charged. When your fixed rate is up, you can decide if you want to pay off the mortgage in full, charge free .

If you dont have an offset mortgage, may i ask what % rate your mortgage is on?

Could you find a better savings % rate on the market? If you can, it makes more sense to save the money (ISA for both you and Mr Pincher maybe?) instead of pay the mortgage as it would mean a Net Positive Interest Balance. Once you have maxed out your allowances, then pay off into the mortgage until next financial year and start process again.

Miss_Penny_Pincher_2

Thank you very much for the welcome, advice and quick reply TYAE!

I don't have an offset mortgage - I meant total mortgage less total savings. Just liked using the term offset savings

I currently have a spreadsheet showing which of our savings are currently earning more interest than paying on our mortgage and which are under. The mortgage is fixed at 4.39% and we have £17,500 in ISAs (Barclays Tax Beater & NS&I), regular savers (Lloyds, A&L & HSBC) and A&L's 6.1% current account which all pay over 4.39% after tax but we have maxed those options so have £9,800 earning interest below 4.39% which is why I'm making £500pm overpayments. Mr Pincher is loath to move it to a better account too as currently we need both signatures to withdraw any money which he likes as it's the first time he's managed to save!

Had been planning on ploughing all into reducing mortgage to £45,000 when fixed-rate ends but seems cleverer to see what rate new mortgage is and what can gain by keeping in ISA etc?

wisewoman

Dithering_Dad wrote: »

Hi TG, have a read of the information in here: http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1076883546,34894, it provides a lot of good information about using 0% credit cards to your advantage.

I've had a bit of a hiccup, I originally transferred 3k into my offset then changed the bank account I use to transfer money to my offset to an old current account I had. My mortgage provider told me that they already had a Direct Debit mandate for this account from years ago, so it would be set up no problem. Hmnnn.

I therefore transferred a further 2k into the offset and thought "that's that, then". However, as I was checking my new mortgage balance today I noticed my offset was wrong and so phoned the bank. The direct debit had failed and so the 2k was never taken. They had sent me a letter to tell me, but I must've missed this (I always have a pile of mail waiting because I'm only home once a fortnight).

I never noticed the extra 2k in my current account because it was in a right state while I was moving cash from endowments to mortgage, business bank to credit cards and sofa companies!! :rolleyes:

*Sigh* the upshot of it all is that we need to sign a new DD mandate (Mrs Dither has sorted that out) and then wait until that's done before I can transfer the cash. Now that my bank account is back in shape I think the 2k may have been "dipped into" somewhat . I wondered why we were so flush during my holidays!!

Oh well, in the words of Baz Luhrmann: "sometimes you're ahead, sometimes you're behind...the race is long, and in the end its only with yourself."

Don't beat yourself up. You had a lovely holiday, with many happy memories for everyone...a great investment in your family. We can all learn from this hiccough, so that is all to the good. Thank you for sharing it with us. Back onto your steed!

Dithering_Dad

It was sooo disappointing to have to take the 2k off my signature and recalculate all the values in an upward way. I hope that is the first and last time I have to do it!!

Welcome Miss PP! - You may want to change your sig to put your Three Yr goal onto there... (and you TYAE!!!)

ThankYouAndEnjoy!

Miss_Penny_Pincher wrote:

Thank you very much for the welcome, advice and quick reply TYAE!

I currently have a spreadsheet showing which of our savings are currently earning more interest than paying on our mortgage and which are under. The mortgage is fixed at 4.39% and we have £17,500 in ISAs (Barclays Tax Beater & NS&I), regular savers (Lloyds, A&L & HSBC) and A&L's 6.1% current account which all pay over 4.39% after tax but we have maxed those options so have £9,800 earning interest below 4.39% which is why I'm making £500pm overpayments. Mr Pincher is loath to move it to a better account too as currently we need both signatures to withdraw any money which he likes as it's the first time he's managed to save!

WOW - Congratualtions on saving so much -

Have you opened ISA's in both your own and Mr Pinchers name; maximising both your allowances?

ThankYouAndEnjoy!

OMG :eek:

Just realised im Addicted to MSE -

Worse still; im thinking of changing my home page to MSE!!

Is there a Medical Condition out there that best descibes this?
Is there a telephone number out there for MSE Addicts Anonymous?


I can feel the colour draning from me now! _pale_