Paying off your mortgage warning

Swampy3k

Just think what you'll do with the money when you've paid your mortgage off! you'll have some serious wonga kicking around then!. treat yourself, you will have earned it.

I however am very envious, I am 29, and have had my mortgage for 2+ years, in that time I have only managed to knock 11k off the full amount however this is due to some limits such as I can only overpay 10% each year, but I have managed to renegociate to reduce the term from 25 years to 13 (with OP hopefully can reduce it to 9 or less) can't wait to have an extra £500-700 kicking around each month but I may just buy another place to rent out

Miss_Moneysaver

Hi,


My husband always says to me about making sure we leave enough money in the pot to enjoy life so I do try to do that. I limit the amount I overpay anyway.
You have done really well though and, hopefully, you will start enjoying your money more now and spend on yourself!

Hurdler

Ironically that was brought me to this site. I watched a programme called Pay Off Your Mortgage in Two Years which seemed to make the participants completely miserable - I mean we're talking strain on marriages and all sorts.

But then I stumbled on this site and forum thread and read that Martin had been originally slated to present the programme and turned it down because they over-simplified the premise and did not take into account mortgage rate increases, interest etc.

It's good advice!

MortgageNoMore

Well it has been a couple of months since post pay off (well a mortgage that is self sufficient funding wise with no interest being levied) and I have to say it has been amazing getting paid and seeing the difference no mortgage payment has on what you have left over. I think it is still sinking in but I have sorted out a new banking structure which should make it simpler for me to see what is available.

If the car hadn't caused major expense then I really would have been laughing but at least I could sort out that major blip relatively easily. I think the next few months are going to allow it to sink in more because at the moment it still feels a little bit surreal :j

freddykrueger

A huge congrats to you

Like you I have an offset mortgage and it's encouraging watching the offset saver account go up and the actual mortgage element that I pay interest going down. However wonder if you can help.....

At the moment I roughly have 79k total mortgage, 45k offset account so paying interest on roughly 34k.

What happens when you reach the tipping point - do you keep paying mortgage payments?

MortgageNoMore

Hi Freddy

I remember having similar numbers to you approx 3 years ago if that spurs you on

Basically I have around £60k o/s on the mortgage and £59k in an offset savers account and 1k in the offset funding current account.

So every month there is an auto s/o to transfer the same as the mortgage monthly payment from the savers account to the c/a and the mortgage takes the same amount from the c/a. I am charged no interest because the mortgage is fully offset and so effectively achieving a pay off.

Why don't I completely clear the mortgage you may ask? well I like the idea of having £60k savings readily available, just in case I need it and it is costing me zilch

Check with your provider though because when I was inquriing I got told it depends on whether you have a reducing monthly payment based on the offset or not (as it happens I don't).

Good luck in the quest :T

freddykrueger

Thanks for that really helpful my offset product is through scottish widows and just wish I had taken an offset product many years ago!

I am on a 2 year fixed deal at the moment with about a year to go but my monthly payments stay the same and I make a monthly overpayment into the offset saver account. Unlike you I don't have an offset current accoutn because scottish widows do not have their own clearing facilities or something like that so I need to have a nominated external account to be able to make overpayments from which in this case is the Clydesdale bank.

I am encouraged watching the balance come down on the mortgage that I pay interest on and this is a good trade off for having a savings account that does not accrue interest