Looking for advice

HitTheBeach

Hello there.

I'm looking for advice on what is the best course of action to take with my money/mortgage situation.

I have a mortgage with £58,430.63 remaining.
It has 24 years and 1 month to go.
I pay £339.43 per month.
The interest rate is 4.74%


I have savings of £26,000.
I save a minimum of £1500 per month.

My goal is to clear my mortgage in the shortest possible time frame.


Can anybody advise, based on my current situation, what would be the best actions to take to become mortgage free in rapid time?

Many thanks.

LydiaJ

Hi HitTheBeach :hello:

You're extremely unlikely to be able to get more than 4.74% after tax on your savings. In your position, I'd keep a few thousand in savings - enough to live on for a few months if you lose your job, or to replace your car if it died on you - and pay the rest off the mortgage, if there aren't any early repayment penalties to stop you. I'd then ask the bank to shorten the term, and pay more off each month so it goes away much faster - again unless there are penalties for doing so. But you'll have to ask your lender what the rules are about these things on your specific mortgage product, because they're all different.

Good luck with it!

CLAPTON

1. remortgage at a lower rate

2. pay 26,000 off the mortgage today
and overpay by 1,500 each month

Watty1

No whizz kid but the way I would look at is that if you are earning more in savings interest than you are paying on the mortgage keep saving. If the mortgage interest is higher than the savings interest overpay the mortgage - so long as you have enough savings for an emergency? That is how I would look at it anyway.

getmore4less

What are the penalties for overpayments if any.

Whats the SOA look like budget well planned and everything covered?

any big bills coming up soon?

is the income safe.

19 months to pay this off is you use the savings and the £1500pm

if you can scrape together a total payment of £1870 it will be gone in 18months.

I would also think about the distaser fund should the income go.

Most emergencies can be handled by just not overpaying one month.

A two year plan with a payment of £1800 and a mortgage of £41000 would keep some saving back.

Another option could be an offset if you want ultimate flexability and ones 100% offset it costs nothing to have access to cheap money.

getmore4less

Just looked at the old posts, not bad £26k from 03/13 DFD.

HitTheBeach

Wow. Some great replies. Many thanks to all!

getmore4less wrote: »

What are the penalties for overpayments if any.

Whats the SOA look like budget well planned and everything covered?

any big bills coming up soon?

is the income safe.

19 months to pay this off is you use the savings and the £1500pm

if you can scrape together a total payment of £1870 it will be gone in 18months.

I would also think about the distaser fund should the income go.

Most emergencies can be handled by just not overpaying one month.

A two year plan with a payment of £1800 and a mortgage of £41000 would keep some saving back.

Another option could be an offset if you want ultimate flexability and ones 100% offset it costs nothing to have access to cheap money.

You ask some good question which I do not know the answers to. Not sure what SOA is and I don't have a budget so I'll get on top of that now. I don't know what Offset means either so I'll ask Mr Google. :-)

The general consensus seems to be to use the savings to pay off a chunk rather than continue to build the savings though. This is what I thought might be best.
I'll need to check if I will be charged early payment etc or even if I can overpay.
Lots to know! I'm so uneducated with all this stuff.

getmore4less wrote: »

Just looked at the old posts, not bad £26k from 03/13 DFD.

Aye. After my 'epiphany' I have been a saving machine. Debts first and now my Mortgage.
I feel like I'm closing in on Freedom. I just need a more detailed plan for this final part.

HitTheBeach

So, I've just had a great conversation with Santander about my mortgage!

Turns out that I won't incur any overpayment charges, which is fantastic news.

I'll start a diary to track my overpayments.

First things I am going to do tomorrow:

Pay £20k off the balance.
Set up a Standing Order for £1500 per month.

Total being paid per month therefore will be £1839.43


Freedom is close...I can almost taste it!!!