I've Done It!! I'm Finally Mortgage-free

keeperbear

Martinslovechild wrote: »

I'm not going to retire on this amount, I agree - but it pays for my car insurance, car tax and house insurance, so I consider it worth the effort.

Good on you! Stick it to the banks! Wish I could be bothered to do the same thing, but the introduction of upfront BT fees stopped me from doing it.

Martinslovechild

Martinslovechild wrote: »

Thank You kindly, your Lordship .

I have approximately £40K outstanding at 0%, some of which is in my name and the remainder in my wife's (although I do all the admin). The entire pot is currently sitting in my wife's savings account (she pays less tax than me!).

So in answer to your question - the mortgage is fully paid off. The outstanding £40K remaining on 0% credit cards is simply now my stooze pot. I pretty much decided to give up stoozing because the fees make it difficult to see a good return, but then a couple of card offers came along which were too good to refuse!

As BT fees keep hitching up (one of my cards has increased its BT fee from 2.5% to 2.75%) and the average now appears to be around 3%, I would consider a new card only if the 0% period has a long enough duration.

For example, £6000 at 0% for 12 months with a 3% fee would still net me £108 after tax assuming a savings rate of 6% gross. On this basis, I'm currently making approximately £720 p.a. after tax.

Get this!

Further to this, only today I received a letter from Capital One, who if you recall, previously gave me a card with 0% for 18 months (which is since cleared). To be honest, I've recently been thinking about cancelling it because it's no longer needed.

Well - not only does the letter address me as 'A Valued Customer' (!!), but apparently, I now deserve 0% for another 12 months.

If you recall, my credit limit on this card is more than £20,000!!

The sting in this tail? there's a 3% fee but I figure that I can still make a fair old profit out of this little arrangement .

Oh, banks! Don't you just love 'em?

trf1960

Congratulations MLC - and for someone so young too. I was in my mid-40s when we paid ours off but its still a fabulous feeling. Now you can enjoy life the way we were supposed to - without that dreaded weight on our shoulders.

Also, its given us the freedom to enable hubby to become self-employed and work the days/hours he wants to work which believe me, has relieved the stress no end.

Good on ya.

raq

my god well done.

Ours is £130k and got another 23 years. Trouble is our credit score isn't fantastic so we wouldn't be able to do this. At themoment we are paying extra £100.00 a week against the credit card debt which will be clear by next summer and then we could put this money against it.

what do you lot think?

Martinslovechild

Definitely - if you're already used to shelling out £100 a week, then simply continue to pay this out, but towards the mortgage rather than credit card debt. It will make a huge dent in your mortgage.

According to this calculator, you'll cut your mortgage term by 10 years 2 months by overpaying £400 per month (£100 per week).

Now that would be an amazing achievement!!

Gnid

Martinslovechild...your story is inspirational!...can i ask, how did you pay off the 0% balance transfer that you used to pay off the mortgage?

Sorry i am confused with how it is done. E.g. if you get a 0% balance transfer and you get £5000 and use that to pay off the mortgage, how did you repay that £5000 at the end of the interest free period?

beckah

Gnid wrote: »

Martinslovechild...your story is inspirational!...can i ask, how did you pay off the 0% balance transfer that you used to pay off the mortgage?

Sorry i am confused with how it is done. E.g. if you get a 0% balance transfer and you get £5000 and use that to pay off the mortgage, how did you repay that £5000 at the end of the interest free period?

Im confused about that too but im not that brainy! I had to get a mortgage over 35 years because could not afford the repayments otherwise for a £134495 im 28 at the moment do you think if i set my mind to it would be possible to do now or is it to late with all the rate changes?

Martinslovechild

Gnid - in a nutshell, clearing my mortgage was a combination of overpayments & stoozing.

I initially decided on a maximum amount that I could afford each month to pay towards the mortgage (let's call it my monthly mortgage fund or MMF). I used Martin's Budget Planner spreadsheet to help me in determining how much money was available to spend once all the other bills were paid, allowing a buffer for CDs & meals out etc.

Secondly, all the monthly minimum payments on the 0% cards were met from the MMF. Since the mortgage became almost fully 0% (I usually kept it just above the zero-line as I didn't want the bank to believe that it was fully redeemed), I simply had to meet my normal monthly mortgage repayment - the rest of the MMF was used for 0% minimum credit card repayments.

Going back to your original question, let's assume that I borrowed £5000 on two 0% cards. Let's also assume that the monthly minimum payment is 3%. After 12 months, I would have paid £0 in interest and £1,526 in monthly payments on each card, therefore I would owe £3,474 on card #1 and £3,474 on card #2.

Shortly before the end of the 12 months 0% expiry, I would apply for another card with a different bank. Let's assume that they offered me a £7,000 limit with a 12 month 0% period (let's call this card #3). I would request the balance transfer of both lots of £3,474 to card #3 (giving me an opening balance of £6,948). Cards #1 and #2 at this point would now have zero-balances (however, that wouldn't stop me from phoning each of these banks to ask about additional 0% offers, sometimes it worked, sometimes it didn't!).

With card #3, the whole process would start over again and I would simply make the minimum monthly repayments until near the end of the 0% period etc etc.


With over £100,000 to repay on credit cards, the monthly minimum payments (assuming 3% each month) are of course £3,000. However, I didn't pay £3,000 per month on credit card repayments - some cards (e.g. MBNA) charged just a £5 monthly minimum payment - even on a balance of £20,000 - very handy! Therefore, plan around however much you could realistically afford to repay on a monthly basis - some card lenders charge 2%, some 2.5% and some 3%, in other words - it varies. You must be able to afford at least your normal monthly mortgage payment plus the credit card minimum payments each month if you're planning to replicate what I've done.

(bear in mind that since I did this, balance transfer fees have of course become the norm on 0% deals over 6 months, so there's now these additional costs to bear in mind).

Anyway, because I decided that I wanted rid of the mortgage in 6-7 years, I pretty much divided my outstanding mortgage balance into 7 at the start and decided that this was the amount I would need to repay each year to succeed.

In the end, it took exactly 6 years & 5 months meaning that I needed to repay £129,000 divided by approximately 6.5 (i.e. £19,800 per annum). As my monthly mortgage payments were somewhere around the £600 marker, I was effectively paying £7,200 to the bank and the remainder (£12,600) was paying the 0% minimum payments. If there was any money left over, this would go into the mortgage overpayment fund or a savings account.


Beckah - rate changes don't even come into the calculations - you simply don't care if the mortgage is 5% or 50% because the bulk of your mortgage debt is at 0%. The only calculation you really need to work out is how much you'll save after balance transfer costs have been taken into account. In fact, it's in your favour if mortgage rates increase because it means that your savings also increase (as you're still paying 0% rather than an additional quarter- or half-point).

If you're in the situation at the moment where redeeming your mortgage in 25-years is unaffordable, then it's fair to say that 6 years would currently be impossible for you, but that's simply your situation right now. However, you may well find that in the future, your job starts to reward you more, or you're left a small inheritance, in fact - any number of things which will help you reduce your remaining mortgage period. The most important thing is to focus on it and make it a priority; if you're focused then you can clear it in substantially less than 35 years. Best of Luck.

terrierlady

Guess what thanks to all the advise picked up on here over the last couple of years we have paid our last payment today, we gained cash from the endowment compo and by overpaying each month Thank you to all the people who gave their knowledge for free and encouraged us all .
:beer:

Thefunkygibbons

Terrific news

I did enjoy my stoozing days, which I did mostly for fun

I wonder whether it is worth starting again