The Mortgage Free in Three - Take 3 challenge (MFiT-T3)

VoucherMan

Twiggy_34 wrote: »

they appear to offer unlimited overpayments, penalty free (outside of the fixed term)

I wasn't aware that this was unusual. My mortgage is with the Halifax, on the SVR, an I can overpay as much as I want. (as far as I know)

shangaijimmy

I'm not a challenge member (yet, am waiting for next one) but I have a FD mortgage and current account. Other than the pretty outdated website and app I've found them to be very good. I make lots of small overpayments to the capital (eg £3.24) with no hassle or penalties.

Twiggy_34

VoucherMan wrote: »

I wasn't aware that this was unusual. My mortgage is with the Halifax, on the SVR, an I can overpay as much as I want. (as far as I know)

Our experience with our current provider is that we can only pay up to 20% overpayments each month; we've been told that this is also unusual and that most providers only allow up to 10% overpayments. I don't know if it would change outside of the fixed term, but with 1st D it sounds like you can make unlimited overpayments from day 1 without penalties (provided you don't clear the entire loan within the fixed term). Our current mortgage is the first one either of us have had and we're still in the fixed period so our experience is limited. We have an appointment with our current provider in 2 weeks though so I can ask them to clarify.

To explain why unlimited overpayments are important to me - We're in a position where we're hoping to secure a BTL mortgage soon on a nearby flat, and we're having regular debates over whether to go interest only or not on the BTL. I'm swaying toward interest only because that would ensure low payments to meet if anything unexpected happened. Originally the plan might have been to save all of the post tax and expenses profit from the rental and to then use it to clear a chunk from the balance at the point of remortgaging after the fixed term finished, but now I'm thinking that it would be best to pump that money into our residential mortgage and reduce the loan amount for that as fast as possible. This ensures the money is having the desired impact on our overall debt (if we save it there will always be a risk that we might be tempted to spend some of the money elsewhere), whilst also having the flexibility of stopping or reducing the overpayments for a while, if desperately needed.

Using overpayment calculators etc, at the end of a 5 yr fix, our overall debt would be reduced by around £5k more than if we had a BTL repayment mortgage (and that's using the lowest overpayment amount that I think we could afford). At the end of the fixed term, we could increase the amount on our residential remortgage in order to reduce the loan amount on the BTL (obviously this would mean we would be paying interest that can't be declared as tax deductible but, with residential interest rates being around half that of BTL rates, I feel that's the best way to manipulate things).

Sorry for the ramble, but if anyone spots a fatal flaw in my theory I'd be glad to have it pointed out. I am by no means a 'numbers' or 'finances' person, so some reassurance would be great if the idea sounds logical, likewise, caution if it looks like I'm about to embark on something stupid!

greent

No 5 here - pleased to report that our mortgage was fully repaid 7th July

akamustang

I don't know if trix-a-belle has access to see the update form results, so I'll put my latest one here as well.

My chart 10 figure is £83,194

Thanks for keeping this going.

Trying_to_be_good

Oo - congratulations, greent!

trix-a-belle

phew eventually got round to updating, blooming life got in the way a bit..

Greent: Congratulations!! i've logged you in my copy as £0 balance for chart 11 but if poss please just put it in FBs sheet in case he picks it up.

FreedomGirl: i've copied your entry in across to my copy, fyi you just need to report the total value of your savings/sipp not the amount you have added to it during the challenge.
Best of luck with the job hunt.

akamustang: I use google drive so have visibility of the entries into FBs sheet so no need to report the values here.
If people submit the form & that entry is on https://docs.google.com/spreadsheet/ccc?key=0AnhcWfGMRVgddE1iTjMwaFQ3Y3EtOS1GQ0NkUnUwdUE#gid=1 then i'll have it.


Updated to akamustang 17/7

trix-a-belle wrote: »

https://docs.google.com/spreadsheet/ccc?key=0AnljKWX-I1BadHByQThMeVpHVS1CaklOZlJPUmFrYmc&usp=sharing#gid=14

norfolkdream

greent wrote: »

No 5 here - pleased to report that our mortgage was fully repaid 7th July

wow that's fantastic greent! This time next year I hopefully will be too

BlueMoo

#160 checking in (if I'm still there)

£152,000 as of July 2015

tjp70

Number 42 checking in to say that we paid the mortgage off today :j


Thank you everyone for your support.