I'm 48 and owe £260k on my mortgage

Help!!
I need to get rid of this noose around my neck. I earn good money, but need to get rid of this within 5 years. I have £60k so take off when my lock-in term finishes next March. Then I'm on a lifetime tracker with nationwide , currently on 2.34%. The question is, should I move to a cheaper house and get this down to a more manageable sum or should I stick it out whilst interest rates are so low and just go for the max, paying off 35k a year? This seems to be a complex equation, with interest rates and house prices to take into consideration. The cost of moving scares me (I reckon it will cost me at least £30k , all said and done). I've read so many posts on here with people with 40k mortgages, I think I should get out now whilst I am earning and use the spare cash to save for my future. Current repayment is £1875 with 14 years remaining, I can overpay £500 per month until next March and then I'm free from any penalties.
Thanks...

Replies

  • downsizer3downsizer3 Forumite
    683 Posts
    Well - it seems daunting but if you're on a good salary and its not impossible why not - only you can weigh it up.
    If you were to post a SOA it would be easier to comment as we could see what you income / outgoings were.
    If it's realsitic and sustainable- you could OP by the allowable £500pm and save what you can beyond that in as high an interest rate account as possible - then pay off a lump. That £60k you mentioned will get you a long way forward.
    Moving needn't cost that much - unless there is an early repayment fee? I'd not take that on unless you are absolutely have to. Stamp duty is the other consideration. Time to put it all on paper - if its on here - we can help more.
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  • lulabelle1lulabelle1 Forumite
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    If you are able to repay more than £500 per month, then why don't you reduce the mortgage term from 14 years, thus reducing the term and increasing the payments....? Nationwide usually do tis fairly easily without much hassle.
  • quintwinsquintwins Forumite
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    £30k to move!!!!:eek::eek::eek:

    Do you have any equity in your house? moving may not be the best idea as you may not get asmuch as you think for your house, or houses in your area may not be as cheap as you would like, check out rightmove to see what houses go for in your area.

    I agree with the others save any surplus you have and do a one off payment as soon as you can.
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  • greentgreent Forumite
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    I have to say that 30K doesn't seem an outrageous figure :( - it cost us almost £20k when we bought this house 6 1/2 years ago - stamp duty, buying and selling solicitors fees, estate agents fees, removal men fees etc.

    I really think stamp duty should be tiered, like income tax, so that you don't pay the higher %age on the whole value of your house :(

    If you can go for it, I probably would in your shoes. Either get Nwide to reduce the term (not sure if that's hassle-y if you're currently in a fix) or just save the rest in the best account you can find until your fix is ended and then hit it for all you're worth :)
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  • edited 27 July 2012 at 8:17AM
    simples99_2simples99_2 Forumite
    2 Posts
    edited 27 July 2012 at 8:17AM
    Thank you all, for such sensible advice. I will post my SOA this afternoon and it has given much food for thought. I am also hoping to change my mindset going forward with respect to spending. I haven't been good, probably over generous and have made some poor financial decisions in the past.

    I'll keep you posted!
  • schumieschumie Forumite
    95 Posts
    I'm with Nationwide, just be careful not to pay off more than the £500 a month or you forfeit the term you are on (my terms have finished now so i can pay off what i like.) I needed to change my mortgage a few years ago from 25 years to 30 when i split up with my fiance. They didn't want to do it but it did make the mortgage more affordable for a few months and now i am out of my fixed term ia m hitting it for all it is worth.

    Good luck. x
    Trying to save money and always open to ideas and expecting our first child in March 2015.
  • ThrugelmirThrugelmir Forumite
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    There's more to life than paying a mortgage.
  • phoebe1989sebphoebe1989seb Forumite
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    We were in a similar situation back in 2007 - although we were younger and owed a little bit less - and we took the decision to sell up, repay the mortgage and downsize. Don't know about you, but we were fortunate to have plenty of equity as the house was worth £600k, so we were able to buy a smaller house and be mortgage-free :D

    Although we initially bought in the wrong area, we have since moved again and overall whilst we do still miss our *big* house, we don't regret the decision each month when we have no mortgage to pay......plus we are currently adding value to our latest project house which is always a bonus ;)

    Completely agree about moving costs, btw - when we moved in 2007 it cost us around £25k........

    Good luck with whatever you decide!
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  • Voyager2002Voyager2002 Forumite
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    Do you like your present house?

    If so, and since you can comfortably afford to service the mortgage, moving might not be such a good idea. You would kick yourself if your quality of life was reduced, particularly if that was the moment when house prices took off again.
  • Sepa74Sepa74 Forumite
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    I'm afraid I'm going to throw some other considerations into the mix.

    At 48 you need to be certain you are on the right track as far as pensions are concerned. It's not just about the mortgage.

    To retire financially secure you need a combination of savings, property and pension (to quote Squirrel quoting someone else!). I would suggest seeing an independent financial advisor to help you understand how you're going with all three and whether you need to adjust the mix a little.

    Don't forget there may be other options as well - what if you let out the house you are currently in, let the tenants pay off the big mortgage and bought a smaller place for you to live in?

    It might not be practical or possible, but it's something to think about - so do you see what I mean about making sure you assess all your options before making any decisions?

    Good luck!!
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