Mortgage Free in Three Yrs

taka

:hello: Hi all and well done so far!! :j I would like to join too please!

I plan to overpay by at least £150/month as of this month as I can definitely manage that. I guess that means I plan to pay back an extra £5250 over the next 35 months. I know I'll have paid my regular payments and their part of the repayment too in this time along with saving interest but its beyond me to calculate this!! Looks like the overpayment calculators say it'll cut about 9 years off my mortgage too! :j

My finances are a bit screwy for the next couple of months so I'm not going to give real numbers until I get it sorted! (Looking to take out another fixed rate mortgage period soon once I know exactly what my communal roof repairs and new bathroom plans are going to set me back and their effect on my budgeting/possible loan/savings! :rolleyes: ). For the moment any "overpayments" will be transferred to a savings a/c so I don't go near it!!

Taka

Dithering_Dad

dang wrote: »

"Hi, I wish I could do this, but the money is the company's money and not mine, so I can't draw it out or I'll be in trouble with the Inland Revenue."

Unless my accountant is mistaken, you can take the money out, just make sure its back in to show on your year end statement - oh and back in for when you have to pay the bill ;-)

Could save you 100's over the next 3 years you never know you may have to change the challenge mortgage free in to 2 yrs 8 mths ;-)

I was told by mine that I couldn't do this because I would be "using the company bank account as a personal one" and that there would be implications if the revenue did an audit and asked where the interest went on the corporation tax (which is a sizeable chunk of money). I am also working outside of IR35 and don't want to appear on any radar screens at the Revenue and end up either being brought inside IR35 and having to pay PAYE on all my earnings or having to pay for a legal battle to stay outside IR35. Bit too risky for me, I prefer to err on the side of caution!

Hi FrugalNotTight. If you only have enough spare cash to do either a mortgage overpayment or pay into a pension, then if I were you I'd pay into a pension. Investments take a long time to build up and luckily you're young enough to be able to save a decent amount. Your mortgage will be paid anyway eventually, but you'll also have the benefit of a pension too. I'm currently paying into my mortgage quite heavily but I'm also paying £300 per month into a stakeholder pension and will be topping that up with additional payments from my company. I also have pensions from previous companies, but if I didn't, I think I'd be on the pensions board with a "Build a pension pot in three years" thread . However it's your money, so it's your choice. In the meantime, I've added you into the quest as an honorary pension building member

Hello to all the new MFiT questees, please check your details on the initial screen to ensure your details are correct.

Dithering_Dad

Wow, we have a load of new members now and so we'll need to recalculate the 3 yr repayment amount once some of the new members come back with what their 3 yr repayment targets are. It'll be a sizeable amount though and I'm sure our mortgage providers will grow to hate our support group in time.

If possible, could the following members have a go at figuring out what they will actually have to repay in cash to achieve their goals - it'd mean we could add this to the final total, plus I think it's easier to hit this sort of a target if you can see it in cold hard cash!

12. tigtag02 - Reduce her mortgage term by 10 years.
13. amazamum - Reduce her mortgage term to 4 years.
35. chica_fi - Reduce her mortgage by 40%.

p.s. tigtag02, I think you've already given me this info but I can't find it anywhere! Tsk, sorry could you PM/Post it again?

betsanboots

i'd been trying to do this on me todd, anyway - then i saw the support group - brilliant! just what i need to stop me treating myself and keep focused.

i started the year off with a 60k mortgage, and, after i'd read Martin's article on premium bonds i cashed them in - time to switch from hopes and daydreams to a practical plan!

I'm reasonably well paid, and together with the freelance work, i earn on average about 47k p.a.. I have a partner to support, though, who's not working - so that chops that down quite a bit.

The freelance work should keep comming, and so i thought i'd tie this period of potential high earnings with a fixed rate mortgage and hammer away at it.

i collected some bits and pieces hanging around in ISAs and, together with some freelance work and the bond money I brought the sum down to 42K as soon as my fixed-term tracker ended (to avoid overpayment penalties)

i then fixed the rate at 4.97 but kept the repayment amount the same. my loan is split into the main mortgage, and a further advance. luckily the maximum overpayment (£500 pcm) can be applied to both. and i've now come down to 38k.

i've got enough freelance payments due to overpay the main morgage until the end of the fixed-rate term (i'll run out of futher advance overpayments soon). I thought of putting any excess in an isa and pay a lump sum at the end of the term.

any advice on cutting my tax (private pension fund - is that worth looking at while the mortgage isn't cleared?) would be appreciated.

well done to everyone

FrugalNotTight_2

According to the mortgage calculator I would need to double my mortgage payments to achieve a 3 year mortgage free goal.

pa2539

Apologies I seem to have missed off what I actually want to do in 3 years.

I would like to reduce my term by at least 10 years from 24 years and 6 months to 15 years.

Also reducing my mortgage but not sure how to work out the actual amount.

taka

Thanks for putting me on the list DD :j ... looks correct to me!

I'm all enthusiastic about this now... had been contemplating doing this overpayment for a couple of months but actually putting it in writing has given me an extra push to do it!

Am leaving work early today for a doctors appointment and I think I'll go into my bank after that and start the ball rolling by opening a savings a/c that I can put my spare money into in the meantime to keep it separate! Oh and I'm going to check which current a/c I have as I think I could get one with better interest!

Have lots of things to do - try to get another refund out of British gas :mad: (long and slow story) and check my mortgage exit fee from my last mortgage (poss get a bit of a refund?) Have just sent of a letter to try to locate and (eventually) shut down an old account (opened 20 yrs ago and never added to... interest last updated 10yrs ago )that I never use which should add approx £70 towards this months £150!

:j

togashi42

Dithering_Dad wrote: »

39. togashi42 - Reduce her mortgage by £10,000.

:huh: :huh: :huh: :huh: :huh:

AHEM! EXCUSE ME!!!!!! :j :j

When did I become a she???????? :rolleyes:

Miss_Penny_Pincher_2

Welcome to all the taka, betsanboots and all the other newbies

pa2539 wrote: »

Apologies I seem to have missed off what I actually want to do in 3 years.

I would like to reduce my term by at least 10 years from 24 years and 6 months to 15 years.

Also reducing my mortgage but not sure how to work out the actual amount.

pa2539 - I have calculated that your overpayments need to be around £180 each month for the next 14 and a half years to pay off your mortgage 10 years early.

I don't know the interest rate you are paying on your mortgage so I used 5.5% in the calculations. If your interest rate is lower then increase the amount by a few pounds each month but if you are paying a higher interest rate then you can pay a bit less than £180 to still achieve the same aim

To be on target to pay your mortgage off 10 years early, over the next 3 years you would need to pay £180 x the 35 months left in the MFiT challenge = £6,300.

Hope that helps,

Miss Penny Pincher, the resident MFiT Geek

Dithering_Dad

togashi42 wrote: »

:huh: :huh: :huh: :huh: :huh:

AHEM! EXCUSE ME!!!!!! :j :j

When did I become a she???????? :rolleyes:

oops sorry! I'm so used to this thread becoming the Quest of the Valkyries that I just assume everyone is female!!

I've update it now!