Overpaying mortgage - peoples experiences

ladymarmalade222

fewcloudy wrote: »

I think what comes across in this thread is that it is better to do something rather than nothing, if you have the spare cash to do it...

And what you actually might end up doing depends upon a number of factors such as your age, your attitude to risk, your current mortgage rate, whether you have a pension or not, etc etc.

So for each person, their personal situation dictates a 'best course of action', and a bit of research needs to be done to ascertain just what that is. And once you have worked out what that is, get cracking, the sooner the better!:)

I totally agree with this, everybody has different circumstances and tailor it to their needs when planning for the future. I was lucky to be offered an old Abbey Mortgage years ago 0.5 +Base lifetime tracker. I didn't have a clue and just went along with it as there was no fees involved and the guy at Abbey said it saved changing products in a few years as it was so flexible.

It was only a few years later that I realised what a lifeline I had been given and I started to plough as much as possible at the mortgage. I don't have a pension, cannot get any life insurance and due to various reasons I will not even get close to living to pension age so I wanted to clear what was my biggest outgoing so I could worry less about losing the roof over my head and also have something to leave to my son. I can hopefully live a little easier.

Just wanted to show another perspective about whether to invest/overpay argument. I could probably earn a bit more by investing my overpayments but the goal for me is an easier life in 6 months time when my mortgage finishes.

xxx

patanne

I started overpaying my mortgage almost by accident. It was with the Lancastrian and they were bought by Northern Rock & I got a cheque for over £2k. First I thought I'd take a really good holiday, then thought I'd take a fairly good holiday (booked a last minute deal in the end so I did get the holiday). Then I got a mortgage statement & saw how much interest had gone on & also insurance which back then had to come from the BS. Then I decided it was all coming off the mortgage. I was going to cut down the payments but thought why not keep going, so I did.

Then things changed at work & panic about expecting redundancy which fortunately never happened. Kept on paying the same amount (overpaying back then wasn't the same as it is now) until it was paid off 10 years early. Just over a year later official redundancy notice & I actually saw it as an opportunity not a time to panic. I still save that mortgage payment even though I am now retired.

Calleja

Thanks again everyone, I really appreciate the input and its giving me a lot to think about. I agree that any overpaying/investing has to be considered after you are comfortable to take whatever life throws at you i.e. illness, unemployment. I don't have any dependents so don't have life insurance but do have income protection. Still, I think its important to have a safety net of 'cash' that can be easily obtained for lifes little emergencies. Its a good point, definitely worth making in this thread.

dimbo61

I like offset mortgages and there are some great deals on the market at the moment.
You can build up savings in the offset account and overpay if you have the spare money.
I keep my savings under £16K ( think benefits )
Vodafone and British Gas took a beating yesterday losing 5/6% of there value.
Overpaying saves the Interest rate TAX free.

Thrugelmir

dimbo61 wrote: »

Vodafone and British Gas took a beating yesterday losing 5/6% of there value.

Apple fell 9% in a single trading session the other day. Markets are starting to wobble awaiting the decision of US QE policy.