Mortgage Free in Three Yrs

TallGirl

Updates need to be in by Saturday as I hope to post the chart on Sunday

lamorna23

We're looking at being mortgage free as soon as we can, at the moment it looks like we could do it in three years, but if we can get it down the better. I have a relatively simple question but I can't work out what the best thing to do is. These are the facts.

Mortgage £84,500 rate of 5.49% with the Halifax. We have paid the maximum 10% overpayment allowance for this year, the next year being Feb 2010. We have £25,000 in savings. We are maxed out on ISA's albeit at a low rate of 3.5% so currently we're losing out. The question is do we overpay £25,000 and pay a 6% fee to reduce the overall mortgage or do we continue as we are and build up the £25,000.

I posted this question elsewhere and someone did say they were in a similar situation and to get around the fee, they arranged to reduce the term therefore increase the monthly payments to eat into the savings. They then increased the term back to a regular figure. Is this simple to do? I'm going to check with them soon but any info before hand would be great.

With our savings I'd be prepared to ask them to reduce the term to 1 year to make one huge 'regular' payment before going back to what it is.

A huge thanks to anyone who can give me a good answer.

littlemrtinkle

I am with the nationwide and found the monthly limit a real bind. So i chose to change the term. I did this in increments to make sure i could afford it. Firstly knocked off 2 years, then another 3 then a extra year etc etc. Changing the term is free with nationwide, i think all mortgage lenders are obliged to let you change the term by the fsa but they have the right to charge. Ask halifax if there is any charge to change your term.

ailuro2

dawnylou wrote: »

When does my update need to be in? We are making another overpayment tomorrow and am hoping to squash it in before the update! lol

11th OCTOBER, iirc!

abouttimetoo

jgtk1559 wrote: »

Hi, Is it possible to overpay when you have an interest-only mortgage? I thought you only paid the interest and then had to clear the capital in one go at the end of the term.

Hi, yes, it's prefectly possible to do and many of us - including me - do this as we either don't want to wait until the end and have incurred all that interest or, some people don't have the correct vehicle to pay off the full amount at the end.

If you are interested in overpaying then I would recommend looking into it as there are lots of different situations e.g. mine will let me overpay as much or as little as I want and whenever I want but some people might only be allowed to overpay by 10% of the outstanding balance per year.

Hope that helps

dawnylou

ailuro2 wrote: »

11th OCTOBER, iirc!

Thanks for that Sending update now. What's iirc??


Start balance £109,825
Current balance £104,566.98

Congrats to those of you who have become mortgage free already! :T
Of course I feel rather silly looking at how much we have managed compared to some - but obviously everyone has different circumstances and I must say that after looking at what difference we can eventually make to our term is really motivating! Using todays interest rates as an example (I understand eventually they will increase causing this to differ) we may shave 8 years off the mortgage!! Which is great as our mortgage is due to run til we are 65 which is rather daunting really!!

GavB79

iirc = if i recall correctly

benbenandme

Thankyou Tallgirl, and congratulations everyone, aren't we doing fab!! :j :j :j

ailuro2

Am I right in thinking we should be 83.33% paid to be on target?

There are lots of names on the chart who are well above this - well done everyone, not just those who are now mortgage free, but those who are still keeping at it even though there's still a recession on and times are tough.

Well done everyone, and Thank You TallGirl for the sneak preview.:D

Desperate_Housewife_2-2

Thanks for the sneakpeek TG! Well done everyone it looks great!