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

TallGirl

Well done DD you have very well. I totally agree with seeing the balance go down is such a motivation it is hard to think about ISA's etc even if you know it makes sense. I think I shall fill mine for this year by borrowing off my mortgage. Really done want to get rid if the access to cheap credit just in case.

setmefree2

DD5 wrote: »

A bit of a milestone this month, I have paid down my next challenge (my home Extension loan) above the magical £10k figure. I'm concentrating all my efforts on reducing this part of my mortage, in a similar way that I did with my (now defunct) Interest Only mortgage. I've so far paid off £52k of my mortgage, which is over a third of the original figure. Not quite what I had hoped 2.8 years ago, but still brilliant considering we became a single income household only a few months into the quest.

I have also reduced my mortgage to below what is in my pension plan, which has no real relevence financially but still made me smile when I noticed it.

Well done DD:T

gallygirl

Great stuff DD :beer:

weezl74

DD4 wrote: »

I keep reading newbie diaries on MFW where some posters recommend putting money into offset accounts, ISAs or other investment plans other than directly onto the mortgage, soley due to financial reasons such as receiving more interest on the saving than you gain from overpaying on the mortgage. I know they're right and I toy with this sometimes myself, but what they (and I) forget is the psychological effect of actually seeing that mortgage balance reduce. Becoming MF is usually achieved over the long haul, so motivation is the key. I know that I'm motivated more from seeing my mortgage reduce than I am from seeing my savings increase.

I wonder too whether people are factoring in that interet on a mortgage is calculated daily, so an overpayment has immediate effect and the compound effect of this builds up from day one. A better interest rate that doesn't pay out for a year may actually be worth less, because that interest hasn't been 'doing any work' over the full year before you recieve it.

Hello DD

weezl74

is your mortgage lender's SVR not so good?

gallygirl

DD5 wrote: »

There are also the costs of keeping a mortgage running, i.e. arrangement fees and valuation fees. I'm coming to the end of my current mortgage deal (which co-incidently occurs at the same time as the the of the MFi3 challenge ) and the costs of arranging an alternate mortgage deal are appalling. I'm just glad we have a low LTV (another benefit of overpaying) so that we can get a low rate.

What's really galling is when they charge a flat fee. Although I completely agree the amount of work is the same regardless of amount of mortgage the flat fee has a disproportionate impact if you have a lower mortgage. We will be faced with this next Oct when one part of our mortgage comes out of its' fix (current SVR is 5.74% :eek:). The balance should be 'only' around 80k & I cannot pay 1.5k for a mortgage!

gallygirl

DD5 wrote: »

There are some providers who have fee free mortgage but then you often get a higher interest rate. Though with a lower mortgage balance the higher rate may not be as expensive as paying a higher fee and getting a lower rate. Time to get the calculator out.

Think I'll do a spreadsheet .

Priority for me is an offset as we will have a lot of savings I will want access to :rotfl:. Seriously, I want flexibility so if not an offset then no restrictions on OP's & the ability to have them back if necessary. 11 months to go so plenty time. We do have a BTL fixed rate ending 31st Dec but as SVR is 2.74% we'll stick with that I think.

weezl74

DD5 wrote: »

I'm currently with Standard Life and their products aren't that competitive. I could go onto their SVR but I think that we'll soon see interest rates flying high (inlfation is already starting to creep up) and so I want a long-term fixed rate.

I think a 5 year fix would be nice, but only if they allow me to do overpayments. I believe most mortgage providers do allow upto 10%, which means that I'd be able to pay down my mortgage by 50% over the 5 years. Not a bad goal.

indeed! Also some providers even with a 10% overpayment cap will let you change the term of the mortgage with no admin fee (Halifax do this) so I ring them every few months and reduce or expand the term to keep overpaying beyond their 10% cap without penalty.

setmefree2

DD7 wrote: »

If anyone is interested in joining me on a pension blitz challange, they're very welcome.

See you over there when our motgage is finally gone I'll pop in and read how you're getting on.

Kerfuffle

DD7 wrote: »

Latest update from me (Dithering Dad):

My mortgage is now down to £96,867 (from £150k) and my pension has finally breached the £100k mark!! Yayy!

I have a couple or so months left of the Mortgage Free challenge and I'm hopeful at getting my mortgage down to £96k.

I'll then be moving to the Pensions board and starting a new diary in time for my next 3 year challenge which will be to build up our (mine & missus) retirement savings. I'll still be overpaying the mortgage but just with steady, regular payments and will save the financial blitzing for our pension pots.

If anyone is interested in joining me on a pension blitz challange, they're very welcome.

Hi DD7,

Just wanted to let you know that I've found your thread to be very inspiring and hope to be able to continue reading it in the future.

Toodles