So annoyed at myself for not making overpayments :-(

tattycath

rainbowcloudy wrote: »

gjchester wrote: »

Are you sure you read the calculator right. We had a £145K loan fixed at 4.89% for 5 years and overpaid as much as we could couple of times it was the 10% a year, sometimes not maybe 5%.

I think i read it right i typed in my original mortgage of 950000 then the rate and if i overpaid 600 a month. The graph at the bottom was at about 22000 left to pay in the 6th year.

It would make me feel better if i had read it wrong.

I think you mean £95000 not £950000?

rainbowcloudy

Thanks for the info dktreesea. I want a 5 year fixed ideally. Ive seen some gd 2 yr fixed and the ones u just said seem good. Barclays offered me a rate switch of 2.99% for 5 years with no fee. I thought that was quite good. I hav 84000 left on my mortgage now and have savings of 34000 so i hope when i switch i can pay the 34000 at the same time and just request a 50000 mortgage. Ive got ERC on current deal which is 2000 but i think im willing to pay it at least then i can add the 34000 onto my mortgage rather than it sitting in savings.
I hope ive understood all this correctly and havent missed anything, it does confuse me sometimes.

rainbowcloudy

Yeh i mean 95000 haha i did type it correctly in the calculator. :-)

catshark88

I do understand where you are coming from OP, but tbh it's a high quality problem. You've saved £30k, but maybe not invested it in quite the optimum vehicle.... You've still done blinking well though!!!!

Hindsight is indeed a glorious thing and I'm sure we all have spending or investments we wouldn't do again, but hey oh, that's life.

Welcome to overpaying from now and well done on your obvious money saving prowess. :-)

dktreesea

rainbowcloudy wrote: »

Thanks for the info dktreesea. I want a 5 year fixed ideally. Ive seen some gd 2 yr fixed and the ones u just said seem good. Barclays offered me a rate switch of 2.99% for 5 years with no fee. I thought that was quite good. I hav 84000 left on my mortgage now and have savings of 34000 so i hope when i switch i can pay the 34000 at the same time and just request a 50000 mortgage. Ive got ERC on current deal which is 2000 but i think im willing to pay it at least then i can add the 34000 onto my mortgage rather than it sitting in savings.
I hope ive understood all this correctly and havent missed anything, it does confuse me sometimes.

2.99% for a five year fix with no fee is a great deal. Swapping a 5.6% deal for a 2.99% deal is probably well worth the £2k early repayment charge as, on £50k, it would save you about £1,300 a year to switch. Not to mention being able to reduce the mortgage significantly.

Just keep in mind though, you want to move house. So if doing all this with your current property, make sure that the mortgage is fully portable, including can be increased (just in case you find your dream home) without any fees applying.

That's what I like about HSBC - fully portable mortgages, even during the fix. What you could do is get a quote from somewhere like HSBC, making sure it addresses portability, then, if Barclays say theirs isn't portable, negotiate. Your bank will want your business. They won't want to lose you. Ask them to match HSBC's conditions if they don't already.

I wouldn't worry about opportunities lost though. The best way to shove savings onto a mortgage is to do exactly what you are doing now, i.e. pay out the old mortgage and get a new one with a better deal, paying in all your savings at the time.

Don't diss yourself about those savings. Remember, we have been through a pretty bad recession. Your great savings probably enabled you to get through the recession thinking, in the unlikely event you did lose your job (most people don't lose their jobs, even in recessions) you have enough savings to, if necessary, see you through the back of the recession, including continuing to pay your mortgage.

norabatty_2

ok, so I just threw in some figures into the mortgage overpayment calculator.

Your first post said you took out a mortgage for £120,000 over 35 years at an interest rate of 5.6%. According to the calculator, if you overpaid £600 per month from the very beginning, you would now owe the bank £60,681.

Later on, you mention a different sum, £95,000 (mortgage actually taken out with a £25,000 deposit maybe?). According to the calculator, if you took out £95,000 6 years ago on a 35 year term, rate of 5.6% and overpaid by £600 per month, you would now owe the bank £37,322

rainbowcloudy

I took out a 35 year mortgage in 2007 for 120000. I then moved and only needed a slightly smaller mortgage about 96000 i think. I have chipped away a little but ive now got about 29 years ish remaining and 93000 left to repay. Ive saved about £900 a month which is why ive got savings now. I suppose i could of overpaid more than £600 month but im only allowed up to 10% so i thought £600 would be about right figure overthe 6 years ive had mortgage.

Does anyone know if its better to reduce the mortgage term and pay extra each month or is it best to overpay? Ive just reduced it to 15 years and hoping to ovetpay aswell. My thinking is the shorter the term the less paid overall? The lady on the phone said there were no fees involved to reduce it and i can afford an extra £200 a month so i decided to do it. Hope ive done the right thing, she said i could increase it again if needed.
I do worty a bit when i talk to barclays customer service as ive had conflicting info before. One person told me my ERC for leaving my fixed rate would be £2100, another told me 2600 and another told me £5000! Someone else also told me theres a fee gor rate switching and someone else said the opposite.

Anyway i hope ive done the right thing im losing the will to live with this mortgage malarky. At least i made an overpayment today of £9400 so quite pleased about that.

rainbowcloudy

dktreesea wrote: »

2.99% for a five year fix with no fee is a great deal. Swapping a 5.6% deal for a 2.99% deal is probably well worth the £2k early repayment charge as, on £50k, it would save you about £1,300 a year to switch. Not to mention being able to reduce the mortgage significantly.

Just keep in mind though, you want to move house. So if doing all this with your current property, make sure that the mortgage is fully portable, including can be increased (just in case you find your dream home) without any fees applying.

That's what I like about HSBC - fully portable mortgages, even during the fix. What you could do is get a quote from somewhere like HSBC, making sure it addresses portability, then, if Barclays say theirs isn't portable, negotiate. Your bank will want your business. They won't want to lose you. Ask them to match HSBC's conditions if they don't already.

I wouldn't worry about opportunities lost though. The best way to shove savings onto a mortgage is to do exactly what you are doing now, i.e. pay out the old mortgage and get a new one with a better deal, paying in all your savings at the time.

Don't diss yourself about those savings. Remember, we have been through a pretty bad recession. Your great savings probably enabled you to get through the recession thinking, in the unlikely event you did lose your job (most people don't lose their jobs, even in recessions) you have enough savings to, if necessary, see you through the back of the recession, including continuing to pay your mortgage.

I may look into hsbc. I did ask barclays if my new fixed would be portable and they said yes. I also like the idea of staying with them aswell only because i wouldnt pay any of the fees u get with remortgaging like vaĺuation fees etc.

When i move i will probably need to bortow an extra £50000 which im assuming wont be on the 2.99% as this will technically be the 2nd part of my mortgage so will be on whatever rate they offer me at the time. I think thats right anyway.
Its all so involved i even confuse myself sometimes, i know what i mean in my head but i cant always explain it properly.
Thanks for all the info and help.

Beckyy

I wouldn't bother changing around the repayment options on your current mortgage, just remortgage asap. You could almost half the daily interest youre paying so it's worth doing it literally now.

Personally I like to OP and leave my term the same so that if I ever lost my job or something terible happened I'm not committed to having to pay so much per month. Everybody is different though.

How much equity do you currently have in your house, or how much is it worth? This will be the main factor on what interest rate you can get.

I think you may still get some fees if you remortgaged with Barclays, definitely get confirmation as you wont be rewarded for your loyalty!

rainbowcloudy

Everywhere i read online it says its best to make overpayments instead of reducing the term. I dont understand. And somewhere else said to make sure theres no ERC when reducing the term. I did wonder about this because in my mind if im reducing the term then my monthly payments go up and if my monthly payments go up then arent i overpaying?? I asked this on the phone and she said there were no fees or ERC for reducing the term and she said i would just get a letter confirming the change.
Does this sound right? Im worried now. Im glad i took her name though because im sure i asked all the right questions!