The "Mortgage-free in 2025-30" club!

pinkteapot

My point was just that when you switch, once you're on SVR, you can pay a lump sum off. Eg your mortgage might be £100k now, £98k in two years, but you could remortgage for £95k instead by paying £3k off.

So what you have to work out is how much interest that £1,000 will save you on the mortgage over those two years, and compare that to how much interest £1,000 could make in savings over two years. If the OP saves you more than £30 more than the interest you could earn, it's worth paying the fee.

As 6% is quite high compared the interest rate you can get on savings at the moment, I'm pretty sure you're better off OPing.

shangaijimmy

Luckyinlife wrote: »

Thanks tea pot iv only just taken out the mortgage so 2 years now and even then its goes onto a SVR of 5.2% which i can then change packages at this stage to try to achieve better rate.

thing is over the next 2 years ill be paying £10944 in standard mortgage payments of which a whopping 8k or so will be interest and only 2-3k will be coming off the capital

so if i pay say £1000 and pay the £30 charge that 8k interest will be lower over the 2 years as it will pay of more on a monthly bases from the capital :]

I think the amounts are all relative really. The 1k will make a significant dent in your overall balance and therefore interest charges etc etc... Mentally i would view the £30 charge as an amount coming off the overpayment so I/you would effectively be making a £9970 overpayment - still very much a significant amount.

Overall the quest is to get the mortgage debt paid as soon as possible, and these big chunks will help for your next remortgage and (hopefully) better rates and products.

Aren't we all in a great place in our our attempts to secure our futures. These diaries and groups are brilliant for motivation and support, and I love interpreting peoples joy, anguish and turmoil in their posts! It really makes me feel a part of a group, especially with no-one in work, friends and family who are attempting similar things!

Luckyinlife

turtlemoose wrote: »

sounds like a no brainer to me on the OP lucky.

Thanks TM :]

Luckyinlife

pinkteapot wrote: »

My point was just that when you switch, once you're on SVR, you can pay a lump sum off. Eg your mortgage might be £100k now, £98k in two years, but you could remortgage for £95k instead by paying £3k off.

So what you have to work out is how much interest that £1,000 will save you on the mortgage over those two years, and compare that to how much interest £1,000 could make in savings over two years. If the OP saves you more than £30 more than the interest you could earn, it's worth paying the fee.

As 6% is quite high compared the interest rate you can get on savings at the moment, I'm pretty sure you're better off OPing.

Ya i was going to save for the 2 years originally but the fact that not much comes of the capital for 2 years really does upset me ill maby try to chuck 1k at it ever 2-3 months for 2 years but well see how its goes
iv cashed in some bonds which where making me nothing and get some savings thats earning less than 1% together to make a lumop some of around 1k ish off it :]
Thanks for the help tea pot :]

Luckyinlife

shangaijimmy wrote: »

I think the amounts are all relative really. The 1k will make a significant dent in your overall balance and therefore interest charges etc etc... Mentally i would view the £30 charge as an amount coming off the overpayment so I/you would effectively be making a £9970 overpayment - still very much a significant amount.

Overall the quest is to get the mortgage debt paid as soon as possible, and these big chunks will help for your next remortgage and (hopefully) better rates and products.

Aren't we all in a great place in our our attempts to secure our futures. These diaries and groups are brilliant for motivation and support, and I love interpreting peoples joy, anguish and turmoil in their posts! It really makes me feel a part of a group, especially with no-one in work, friends and family who are attempting similar things!

Thanks for the support i guess you mean the £9970 as £970 hehe
its just this first over payment im putting few resources together to pay of a nice amount i wont be able to do this every month so will see how much i can scrap together now and pay it before my next normal payment goes out :] on the 1st of next month :j:j

Skippycat

Hi there :hello: Is there room for one more to join?

OH and I bought our house about 8 years ago. Currently have just under £91,000 remaining over 23 years We are intending to start overpaying later this year after our wedding. Also need to get a new bathroom sorted out later this year and some other home improvements (new carpets, replacing furniture etc). It is going to be an expensive year but we are determined to make a start on reducing the mortgage in 2015. Luckily we don't have any debt other than the mortgage I am putting our target date as 2027 but think I might be a bit over optimistic!!! If we did manage it though I would be 45 and OH would be 50 when the mortgage is paid off so that would be fantastic.

Skippycat || original MF date 2038 || target 2027 || goal: to pay off mortgage asap so we can start saving extra money towards retiring early.

pinkteapot

Welcome, Skippycat! I've added you.

choccielover

Right well count me in.

Current MF date 2041 (26 years)
Hopeful MF date 2025 (10 years)

Will post details later of how I hope to achieve this.

Phew, feels better to have made a commitment to you guys than have it all swirling around in my head....

Chocs.

Baby_Angel

LuckinLife, we do not have any fees for overpaying, at least not for any amount less than 10% of the outstanding amount (that would be a whopping 20k or more for me a year :eek:).

If you had worked out the interest vs the fees and it is still worth it, then you should overpay. A lot of people overpay even little amounts of money, I believe they all don't pay any such fees like you.

Luckyinlife

choccielover wrote: »

Right well count me in.

Current MF date 2041 (26 years)
Hopeful MF date 2025 (10 years)

Will post details later of how I hope to achieve this.

Phew, feels better to have made a commitment to you guys than have it all swirling around in my head....

Chocs.

really great target good luck im sure youll get there keep us upto date on how your getting on :]