Where do I begin?

Gillybean

Well done on the Sky discount! I've found they're usually more than happy to knock your bill down if you're seriously considering lowering/ getting rid of your package.

As to where do you begin- are you able to set aside a regular amount each mth towards overpaying? Now you've done a SOA you should be able to see where your cash is going and how much you *should* have at the end of each mth.

The other side of it I find is in the small changes. I have a change jar, a £2 coin collection, do a tidy up of all my accounts at the end of each mth, meal plan as much as poss, etc.

GlamGirlie

FunLovinCriminal wrote: »

My current mortgage deal runs out in 12 months, and they only allow overpayments as a direct debit.
First question is;
HELP, anyone give me any help/advice on what to do first, and how to begin this journey?

Make overpayments by Direct Debit!

If you have any spare cash, commit to the DD. Even £50/month can make significant inroads on mortgage debt.

Whomever your mortgage is with, you can use this overpayment calculator to see just how much impact small overpayments can have.........

https://mortgages.hsbc.co.uk/overpayment-calculator

Also, check if your mortgage interest is calculated daily - if it is, it is well worth you paying extra now if you can, rather than accruing it in a savings account, because it will have an immediate impact.

Say you have £50/month spare, if you put it in a savings account for teh next 12 months you will earn minimal interest, and it will be taxed (assuming you are a tax payer).

I would bet that you won't earn as much interest on the savings as it is costing you in mortgage interest so if you can pay some off by monthly DD (even £20/month!) then do so.

FunLovinCriminal

Thanks for all your help/advice
I'm having to compromise with OH. I would love to do the kind of saving that was on "Pay your mortgage in two years" - remember this?
However, OH likes comforts, and we shall meet in the middle.
Savings jar opened, I'm starting the OP by £50 per month tomorrow. Anything extra will go into savings jar to pay Car Loan off earlier.
Thanks for all your suggestions - its certainly opened my eyes. Paying £33 per month to Simply Health to save £70 on contact lenses - mental!

FunLovinCriminal

First question, for when the fixed rate runs out.
How do I work out which is the better deal
a) fixed rate with zero fees
b) fixed rate but with £1000 (for example) fees, but lower apr

Is there a simple way to work out whether I'm better off paying £30-40 per month less but paying £1000+ for the privillege?

FLC

edinburgher

I've been thinking exactly the same thing and I think the main factor is the size of your mortgage.

For example - if you have a £500k mortgage, it could be hundreds extra a month for a higher APR. I think this is why some of the ultra low APR mortgages have £1500+ product fees...

If, on the other hand, you have a small mortgage (relatively speaking), you're not saving as much.

We'll be remortaging for c. £108k next year. Assuming a 2 year fix, a £1000 product fee is equivalent to an extra £42 a month.

FunLovinCriminal

Thanks Edinburgher
We have approx £90 mortgage. How would we work it out?

edinburgher

Well, it depends whether or not you plan on taking a fixed rate or not. In my head, the extra cost = product fee / number of months in fix (because you typically take a new fix directly after the first one to ensure your rate remains competitive).

Then you just compare the monthly payment for the product with a fee + the fee cost per month with the monthly payment for the product with no fee but higher monthly cost.

Go with what's cheapest?