Mortgage Free in Three Yrs

Move_To_Portugal

Hi all. I've been very slack in reading the forums lately and I'm sorry to read that some of you are having a hard time. I hope 2009 will be better for you.

We've fallen a little behind on our over payments this year mainly due to putting the money into an emergency fund - we wanted some back up if everything goes wrong.
Our mortgage balance is now at £126,273 and we're 8.8% towards mortgage freedom - still a long way to go!

Move To Portugal

Dithering_Dad

Move_To_Portugal wrote: »

Hi all. I've been very slack in reading the forums lately and I'm sorry to read that some of you are having a hard time. I hope 2009 will be better for you.

We've fallen a little behind on our over payments this year mainly due to putting the money into an emergency fund - we wanted some back up if everything goes wrong.
Our mortgage balance is now at £126,273 and we're 8.8% towards mortgage freedom - still a long way to go!

Move To Portugal

Hi MTP,

Just out of interest, when are you thinking of moving to Portugal? With the house price situation over there being so dire (even worse than ours over here), could you sell up now and bag a bargain?

It'd be a shame to spend years trying to pay down your UK mortgage just to find that the Portugal market has recovered faster then the UK one and your worse off financially by delaying than you would be by buying now.

Desperate_Housewife_2-2

Hi Guys, hope you are getting ready for xmas and not spending too much!

Just popped on to update my sig...bank statement came today and I can pay off another £500 due to gas and electric refund (overpayment) some quidco money cam through and getting some money back for opening a bank account ages ago .......yay!

Next month below £15k fingers crossed!

Trying_to_be_good

Having been very committed to this challenge, I'm now in a dilemma.

Unlike some on this thread, I'm not in my 'ultimate' or 'final' home - I'm still looking to trade up at some time, perhaps within the timescale of this challenge. I'm in a flat now, and will want a family house.

At the moment, I'm on a fab tracker, the woolwich + 0.18% one. But if I keep overpaying on this, and then need more borrowing in the future, the future borowing will be more expensive. So I'm wondering whether I should be making only the minimum payments now and saving the rest, even though I'd earn less interest than the current mortgage is charging. That way I'd need to take out less in the future that will be at a higher rate (not expecting the world of +0.18% trackers to ever return!).

My ISA is already maxed for this year, and I have the £3,600 ready for next year.

What do you think?

Zed42

Trying_to_be_good wrote: »

Having been very committed to this challenge, I'm now in a dilemma.

Unlike some on this thread, I'm not in my 'ultimate' or 'final' home - I'm still looking to trade up at some time, perhaps within the timescale of this challenge. I'm in a flat now, and will want a family house.

At the moment, I'm on a fab tracker, the woolwich + 0.18% one. But if I keep overpaying on this, and then need more borrowing in the future, the future borowing will be more expensive. So I'm wondering whether I should be making only the minimum payments now and saving the rest, even though I'd earn less interest than the current mortgage is charging. That way I'd need to take out less in the future that will be at a higher rate (not expecting the world of +0.18% trackers to ever return!).

My ISA is already maxed for this year, and I have the £3,600 ready for next year.

What do you think?

Naively (and prepared to be shot down in flames!) ... when you sell this property and buy somewhere else ... you'll be doing a whole new mortgage with a whole new set of terms ...

So, if I'm right .... keep the OP's up and increase your equity

Moneygoes2money

Trying_to_be_good wrote: »

At the moment, I'm on a fab tracker, the woolwich + 0.18% one. But if I keep overpaying on this, and then need more borrowing in the future, the future borowing will be more expensive. So I'm wondering whether I should be making only the minimum payments now and saving the rest, even though I'd earn less interest than the current mortgage is charging. That way I'd need to take out less in the future that will be at a higher rate (not expecting the world of +0.18% trackers to ever return!).

My ISA is already maxed for this year, and I have the £3,600 ready for next year.

What do you think?

I would continue to overpay because you can always borrow back the money you've overpaid at a later date if you need to. So continue to overpay then borrow back if you need to and transfer (i.e. port) the mortgage to your new property when you move.

P.S. Lifetime tracker of +0.18% is an excellent product so you definitely want to port this to the new property rather than redeem it for a new one (unless a better deal becomes available, which seems extremely unlikely at the moment).

setmefree2

Desperate_Housewife wrote: »

Hi Guys, hope you are getting ready for xmas and not spending too much!

Just popped on to update my sig...bank statement came today and I can pay off another £500 due to gas and electric refund (overpayment) some quidco money cam through and getting some money back for opening a bank account ages ago .......yay!

Next month below £15k fingers crossed!

Well Done DH:T

cupid_s

Moneygoes2money wrote: »

I would continue to overpay because you can always borrow back the money you've overpaid at a later date if you need to. So continue to overpay then borrow back if you need to and transfer (i.e. port) the mortgage to your new property when you move.

My tracker is 0.69% above base rate which I'm really pleased with. We recently enquired about porting our mortgage to a new property, and they said we could port the existing balance (which is about 30k less than it would have been if we hadn't overpaid anything). But the rest would have to be a tracker at a much higher rate. We asked about borrowing back our overpayments and were told that any further mortgage we take out will be at the higher rate, even if we are just borrowing back our overpayments. So TTBG may well not be able to borrow any further funds at only +0.18%.

TTBG, I am in exactly the same position as you and now feel like my bank is penalising me for overpaying (maybe because they are lol). I am now saving all my overpayments in an account specifically for paying off the mortgage and I still class all money in this pot as overpayments as no matter what they will not be used for anything other than towards this house or our next.

At the moment, you're paying 2.18% in mortgage. You only need to be getting ~2.75% interest (if you are normal rate taxpayer) or ~3.65% if you are a high rate taxpayer to equa what your mortgage interest is. Surely you can beat that? My tracker is over half a % higher than yours and I am better off saving at the moment.

I agree that because we are hoping to move in the future what is best for most MFi3 members wont be best for us. It doesn't mean I'm not committed to the MF challenge just that at the moment my long term goal of being mortgage free in my forever home will be easier if I don't pay more than I have to off the mortgage now.

Move_To_Portugal

Hi DD, thanks for asking - 2012 - we can't go any earlier due to my dd finishing her schooling. Also dh is learning Portuguese and needs to be fluent before we go - he needs to work.

I'd love to go now though!

Trying_to_be_good

cupid_s wrote: »

... TTBG may well not be able to borrow any further funds at only +0.18%.

Spent another half hour on the phone to Woolwich to check (previously they told me I couldn't get back overpayments). UPDATE! They run a 'pre-payment' pot each mortgage year (i.e. October to September) and you can claim back non-cheque overpayments for that year until September. They than 'capitalise' the pot and take it from the amount owed, so you can't get it back. BUT, I asked, if I were to reclaim the pre-payment pot in August, and repay it (not by cheque) in October, would I keep access to the whole overpayment bit. YES!:j

If you're with Woolwich, worth checking this out, as it seems to give me an offset capability including emergency savings fund. The nice lady stressed that overpayments made by cheque are capitalised on receipt unless you ask them to make it a pre-payment - opportunity for them to mess up, so best avoided, me thinks.

Hope this makes sense - conversations like that make me glad I have a Maths degree!