Soa

andys15

My wife is a different entity. She is very much a spender. It's part of the reason we do the 1k thing. We used to have a joint account, but it caused lots of arguments. She thinks we should enjoy everything whilst we can(just hitting our 40s in the next year). Sometimes she wins the argument. We did spend a lot of our earlier marriage, arguing a lot about money, and tbh, I cannot even stand to argue about it any longer. I will never have her onboard. Her mum is exactly the same.

andys15

I know I am in the wrong about the mortgage, but why does it make sense to only me. On some of the loans, I have already the majority of the interest. The 399 a month one, I have already been paying it for 4 years, so therefore I will save about £1200 in interest, where as the mortgage interest has saved me many multiples of that.

getmore4less

It does not work like that.

The money you save by paying of a higher rate debt goes towards paying off the lower rate debt so you still get the long term saving and in the short term save more.


No debts should be front loaded theses days and there a limits on any Early repayment penalties and in some cases you can avoid them

andys15

It wasn't front loaded. But by putting to figures through a loan calculator. I have already paid about £6500 in interest over the last 4 years, as obviously the amount was higher. I have about £1500 of interest left to pay.

getmore4less

Not if you pay it off before the lower debt mortgage,

what's paid already is not relevant other than to point out the wasted opportunity while overpaying the mortgage, probably cost you over £4000

midlander81

Well done for posting. My wife and I owed around 40k on a take home pay of around 4k so I guess our debt to income ratio was similar to yours.


I am glad that you posted as it shows that anyone on any income can fall in to debt.


I wish you well

theoretica

andys15 wrote: »

Double. The hp will never be paid off. It's a car on pcp. I have just got it, after doing the same thing for 3 years. In another 3 years, I will do exactly the same.

Why? Is a car under 3 years old a need for your job or just something you like? You are of course allowed luxuries, but good to know how much you are spending on them.

Frozenace

I would start a quick spread sheet and plot a graph of debt repayments over the last year and review every month.

The below is not strictly correct due to compounding, but for each element you roughly pay:

mortgage - 190,000 - 3800 interest
hp - 40,000 - 1200 interest

kitchen - 14768 - 1228
ext - 13070 - 915
garage + ext2 - 1584

Total interest every year: 8727

727 pounds in interest per month.

At 40% income tax, ca. 13k of your pay goes towards the bank.

- Are your shares making more than 8% per annum at the moment?
If not, then maybe you could pay off some of the kitchen with those.

- Sky/Internet could be combined => I cancelled my Sky a few months back, because 40 pounds after tax (480) is like 1000 pounds per year from my salary gone.

In my household, I like to spend, but my wife saves a lot. We just had our first child and we want him to have a good education. Different priorities for every person, I guess.

Good luck with your journey.

getmore4less

theoretica wrote: »

Why? Is a car under 3 years old a need for your job or just something you like? You are of course allowed luxuries, but good to know how much you are spending on them.

With only £65 pm fuel it is not being used very much.

If this is never intended to be kept there is no asset value so knock the £30k off that is making it look like net assets are £40k when they are really only £10k.

Also the total property debt is very high(over £240k) and will have been higher as some are over 4 years old already the payments including house running are £3400pm.

Time to stop doing the house up you don't seem to be adding much value and if you add in the true cost including interest these projects have lost money.

By focusing on the mortgage you are borrowing money at 7%- 8% to pay of a debt at 2%
each mortgage payment has around £1300 capital @ 5%-6% over 5 years that's like throwing away £10k-£12k.

getmore4less

Another view(snowball calc would give closer cost of diverting funds to mortgage)

Unsecured Debts
Description....................Debt......Monthly.. .APR months interest.
Kitchen........................14768.....399...... .8.32.....43........£2357
Extension......................13070.....310...... .7.........49.......£1975
Garage ........................9800......197.......6.8........59........£1745
Extension......................13500.....298...... .6.8.......53.......£2146
Total unsecured debts..........51138.....1204......................£8223

£51138 £1204 1.99% 45m £1945.