Mortgage Free in Three Yrs

Kaz2904

save-a-lot wrote: »

Hi

This is ok - http://www.quote-engine.com/mortgage-overpayment-calculator.html if you are thinking of paying off in 3 years. This calc does not account for altering rates, i.e. if you are on a deal at the moment which will end - it cannot deal with that etc... I do not know of any calculators that allow for changing rates through the mortgage term - does anyone??? Anyway the calc in my case states that in order to pay mine off in 3 years I would need to add another £1700/month as an overpayment on top of my current £505 :eek: on £74000 mortgage.

https://www.whatsthecost.co.uk allows you to put in an introductory rate and the amount of months you have it for. As I am on my 5.29% until June 2010 I have just left it as that is my rate because I have no way of predicting what interest rate I will be on then. (It could be 1% :rotfl: !)

Kaz2904

I've just checked my snowball again and the bu**ers have put it back up to september 2013. I'll change sig!
Does anyone think that I should try to move my mortgage to the beginning of the month a day at a time? I found out that my interest goes in on the last day of the month.
The dilemma I have is that, at present my standing order goes out on the 25th of the month and I get paid on the 22nd. I would therefore only have 3 months before I ended up paying 2 payments from one wage (I always used to pay it on the 1st but moved it forward when I changed the DD to SO.)
I guess what I'm saying is that it would probably be better for me to just pay a double payment on the 1st of next month and then have to repay the savings? What do you guys reckon? I think I need to delay changing it over at least until I have repaid my savings account.

Sorry about the rambling!

AnW'sMum

Hi everyone and welcome to all the newbies

I reckon at this stage we have pledged to repay/reduce our mortgages by £1,362,661

Also on the assumption that everyone is on track then for April the total overpayments are .......drum roll please £37299 :T:j :T :j :T

Well done to everyone, this is a fantastic start to the challenge. keep up the good work.

pinky8

Hi I would love to be a part of the challenge also

Here is a summary of my finances:

Outstanding mortgage- Currently 22 yrs 5 months and we owe £138200. Approxomately £85000 is repayment and £53200 is interest only.

Current monthly payment: £776.64

Current level of overpayments: £0

Level of savings on 22nd March 2007 when mortgage began: £0

Level of savings now: Approx £800

Adding to savings: Whatever is left in the current account at the end of the month.

Targets:

To reduce our mortgage by £20000 (which will make our mortgage £118200) within 3 years (well I think it is 35 months now )

Is there any other information that is needed?

I will keep you all up to date with how we are going

Good Luck to everyone!

xxx

save-a-lot

pinky8 wrote: »

Is there any other information that is needed?

In your post you mention savings. So you are saving rather than overpaying. I am doing this aswell, the reasoning I have is that my mortgage rate is 4.67% and I can earn 5.8% saving into an ISA. So, it makes little sense to overpay in my case as I can earn over 1%+ extra by saving my money. This offsets the mortgage essentially.

Question is; are you saving into an account that has a higher rate than what your mortgage rate is?

also, what is your mortgage rate and what rate are you saving at??

ailuro2

Rememeber it's not just the interest rate you get on the money you are paying into the overpayment fund- it earns you more because you are using it to help start paying off your capital amount quicker instead of interest-thereby saving more upping the equivalent interest on it, so it's a double edged sword.:D

Try it on the Co-op calucator- http://www.co-operativebank.co.uk/servlet/Satellite?pagename=CoopBank/Page/tplPageStandard&cid=1076576252029&c=Page use the overpayment boxes to pay in 1000 on 07/07, then click on the back tab underneath,on the flexible features and use the lump sum underpayment to withdraw the £1000 after a year.- look to the box on the right hand side to see how much interest saved- that is the interest you earned having that £1K in for only a year.

If it is a longer mortgage the amount saved is even bigger.:j

AnW'sMum

save-a-lot wrote: »

In your post you mention savings. So you are saving rather than overpaying. I am doing this aswell, the reasoning I have is that my mortgage rate is 4.67% and I can earn 5.8% saving into an ISA. So, it makes little sense to overpay in my case as I can earn over 1%+ extra by saving my money. This offsets the mortgage essentially.

Question is; are you saving into an account that has a higher rate than what your mortgage rate is?

also, what is your mortgage rate and what rate are you saving at??

The other thing to bear in mind is your tax situation as interest is taxed at 20% for a basic tax payer but a higher rate tax payer will pay be taxed at 40%.

So you need to see what the effect of taxation would do to the interest you are earning, if it brings the percentage rate below your mortgage interest rate then you would be better off throwing it at the mortgage assuming:

A. you do not get penalised due to hitting any annual max overpayment allowed

B. you have sufficient emergency savings that you can draw on if needed

save-a-lot

Hi

Already done the figures and worked out my net interest from savings and I manage to save at above the mortgage rate on all counts. The eventual aim is to get most of the joint savings into ISA's paying the best available interest rate. One thing though, do you think I should be doing a bit of each, saving & overpayments? as after tax savings rates come close to the 4.67% anyway. Would this make more financial sense??? I can overpay 5% of the mortgage balance on my mortgage deal as it stands, that equates to around £3000 overpayments allowed for this year.

chica_fi

Hello! I would like to join here, if you'll have me? Dithering Dad, you make me laugh with your posts very often, thank you for bright spots in the dark days! I had been on the DFW board more, but circumstances have changed in the last few days so. A bit about me...

I work in a bank *ducks to avoid rotten eggs* so i get a discounted mortgage rate. I bought my flat for £53k three years ago on a 100% mortgage from RBS (not my employer!), guaranteed by my dad. Last year when that fixed rate was up i switched to a flexi-repay variable deal from my employer, currently at 4.43%.

I got married to dh 18months ago and when we totted up our combined debt it came to just under £40k, excluding the mortgage :eek: We set about repaying it with a vengeance and have mse'd our way down to around £30k. Our goal is to move to a nice house in the next year or so and for that to be possible we knew we had to get rid of as much debt as possible. So we reckoned we'd get a new survey done on the flat to see if the value had gone up enough to put all the unsecured debt in with it. I know, i know, it's not usually a good idea, but with my mortgage apr being so low we reckoned it'd be the quickest way, since we'd be able to keep overpaying.

So... our flat is now valued at £105k so putting all in we'll be borrowing £82k on our mortgage with no, yes, no!!! unsecured borrowing. And none ever again.

Anyhow, that makes a monthly payment of £486.70, but we'll be paying £1000 a month which is still less than all our previous payments put together - allowing us to build up a bit of savings. Hurrah. Overpayment calculators put that at paying it all off by July 2015, although of course we're looking to be able to buy a bigger house way before then. But it gives us something to aim for!! If anyone's read this far, well done... and thank you!

I'm away to change my sig now...

ailuro2

Save-a-lot- I'd suggest you put your figures into an overpayment calculator and work out how much the total interest saved is for your own mortgage length and rate.

As I sais in the post above the knock-on effect of overpaying means you don't just save the mortgage rate in interest, you save by getting rid of more capital amount too.;)

Try it and see- it is particularly good when done at the start of a mortgage compared to halfway through.