A cunning plan (but a humungous mortgage!)

Jevvers

I have been lurking for quite some time and I am full of admiration for all your efforts! Spurred on by finding out we weren’t the only couple with a scary-sized mortgage I thought it was time to start a diary of my own.

About us: both in our early 40s with two young children, we work full time but we don’t go mad with the spending although I’m sure we could cut down.

Bought our current house in 2008, by carrying over our £246k interest-only mortgage (keeping the 17 years left to run) and adding a further £164,000 repayment for 25 years making a total of £410k!

This means we won’t pay off the mortgage in total until 2033!:eek:

The good aspect about this mortgage (at the moment at least) is it is tracking the BoE base rate +0.49% for the lifetime of the mortgage. So for the past four years we have been paying 0.99%.:j

So instead of over-paying as such, we are saving in a separate pot and are drip-feeding it into regular savers.

Even with the looooow rates around, we are making more than we would by OP-ing - for now. We are very clear this is a mortgage saving pot though and we are keeping it separate from our other savings.

Phew! This post is almost as huge as as the mortgage, thanks for reading.:D

auroan

Please tell me its a typo..... and you don't actually think you'll have paid off your INTEREST ONLY mortgage in 2033 ?!?

Or are we missing the details of your final settlement vehicle ? Have you worked out how much you need to save each month to get 410k ?

Matt_The_Chippy

Wow, that's a whopper!

Welcome and the best of luck with your journey ahead. What's the plan of attack to reduce it bit by bit?

Jevvers

Hi auroan, it's the repayment mortgage that doesn't finish til 2033. The IO finishes in 2026. I've not put the details of the repayment vehicle here but it is on track. Thanks for your concern though, it is a scary figure!

Thanks Matt, yes the plan is to chip away at it. We have just taken out a Santander 123 account (it's a Santander mortgage) and so will get cashback on our mortgage payments each month which will go into the OP pot, along with the other cashback.

auroan

So just to cover your interest only portion.... that's 1200 ish quid a month you need to be putting away (if your pot is empty) over the next 17 years.... on top of your interest payments and your other mortgage !!!!!

Rather you than me mate

Matt_The_Chippy

I've got the 123 account also and the mortgage is Santander's Offset at 2.99% over base. I've been very impressed with it, helped me to save so much, so quickly!

Jevvers

The pot isn't empty as we have been paying into the investment vehicle since 2001 - we're half way through the IO term. The repayment is the "new" part of the mortgage with almost 21 years to run.

Btw, the "cunning plan" is all the drip-feeding from various saving accounts to maximise the interest - but I wasn't sure it would be that interesting to detail it all!

newgirly

Hi Jevvers , welcome to the mfw board It's a massive mortgage, but mortgages are all relative to our own situations. How long are you hoping to knock off your terms?

Anyway best of luck with the new diary.

Jevvers

Thanks Newgirly. Ideally I would love to knock 10 years off our term because that would mean I would be MF by 50. I don't think that's doable with our current situation but hopefully once we pay off the Interest Only part in 13 years' time, we will be able to knock chunks off the repayment.

Meantime, we are just trying to chip away at that repayment mortgage and today I paid 139.20 into our OP pot which was a bit of money from the current account plus savings by using vouchers at Tesco. Every little helps!

MoneyMission

Hey there Jevvers. We have an eye-wateringly large mortgage too. I spend hours playing with mortgage calculators! I will watch your journey with interest.

MM.

catshark88

Hi,

Another large mortgage with us. Luckily they work in just the same way as a small mortgage and can be dealt with, pound by pound......

At least that is what I keep telling myself! :rotfl: