My mortgage-free journey

LannieDuck

Hi all My OH and I bought a house last month, and took out a massive mortgage to go with it! We'd previously managed to pay down the mortgage on our flat to about £10k, so this is a huge change. We're both agreed that we want to overpay it as much as we can, whilst still retaining a good quality of life.

A bit about us - I work full time, he works part-time. We have two children: DD1 (3 1/2 years), DD2 (1 yr). I've just gone back to work from maternity leave. We used to have a lovely pot of savings, but through two maternity leaves, a lease extension on our flat, and paying off the stamp duty on our purchase, we have very little left (except a lovely new house :T).

I'm hoping this thread will help to keep me organised and focussed on our mortgage-free goal. And it would be lovely to meet some other people who are doing the same thing :beer:

LannieDuck

Our mortgage details:

Repayment mortgage (24 year term) at 2 year fixed rate of 1.84%
Amount borrowed: £330,000
1st monthly payment £1422.53

We can overpay 10% each year if we want to.

LannieDuck

So... my first question. I've discovered that my mortgage account has an online access facility. I've just checked, and our balance is currently £330,238.41.

Can anyone explain where this figure comes from??

AFAIK, I've made one monthly payment of £1422.53 so far.

I thought maybe it was because they'd added the 1.84% charge for the 2 years upfront. But for £330k, it would be £6072.

I'm confused, and unfortunately there's no nice account statement online to help me figure it out...

bexster1975

Hi

Depending on when the mortgage started could this be interest?
Or arrangement fees?

Bexster

happydays_70

Sounds like it could be interest. I pay £963 mortgage a month and then get charged £430 interest (I'm on 2.84% interest). So effectively I only pay roughly £543 off my mortgage per month.

pinkteapot

Hello LannieDuck! I've added you to the list.

I've accidentally saved £18. I'm stripping, repainting and decoupaging my craft desk. I took a sample of a wallpaper from B&Q to see if I wanted to use it for the decoupage part. I've now realised my sample is big enough to get all the bits of paper I need from, so I don't need to actually buy the roll of wallpaper.

Technically that may have crossed the line from money-saving to stealing.

LannieDuck

Thanks everyone for commenting. I feel as if my diary is officially underway now

bexster - ohh... perhaps part of the arrangement fee? That's a really good thought. I'll go back over the charges that our broker outlined and check that.

happydays - my first thought was interest. Does it normally get applied monthly or annually?

pinkteapot - what a happy accident! lol

happydays_70

I am with the Halifax on 2 year fixed at 2.84% and it is added monthly.

LannieDuck

Ah-ha! Mortgage documents say that a product fee of £995 has been added to the mortgage, so the total was £330,995.

We're now at £330,238.41 so, of the £1422.53 payment, £665.94 went on interest and £756.59 went on paying off the mortgage.

That's good to know - I don't want to be paying that much interest each month, so it should motivate me to overpay as quickly as possible!

MummyEm

Welcome LannieDuck

I have read through and subscribed.

I also have a large mortgage - around £261000 down from £295k originally around 5 years ago. Just started consciously OP'd over the last year or so.

Looking forward to following your journey.

MummyEm

Just to add, don't forget to make sure you have some emergency savings that you can access (though I believe that some mortgages will also allow for OP's to be requested back so this can work as an alternative) before you start OPing.

Good luck