Right, let's go!!

CathA

Several times I've nearly been mortgage free. In the 80's I had a staff mortgage with Nat West, paying a cheap rate of 5% (normal rates were about 11-15%, who can remember them!!!) I overpaid for years and got the mortgage to £14,000 from £17,000. Then I had my eldest daughter and didn't go back to the bank but still had (for those days) a relatively small mortgage.
Divorce and single parentdom followed for a few years but even so I managed to save up and move to a bigger house, mortgage then £27.000 ish on a house valued at £180,000.
Then I met my second husband, who after selling his former marital home wanted to pay the mortgage off. Interest rates in building societies were then of a rate (6-8%?) that made paying off the mortgage financially uneconomic (Oh happy days!) so the mortgage carried on.
We then bought a repossession to do up as a hobby, whilst still living in our main house, extending the mortgage by £95,000 eek!! 7 months of hard work later, we sold the house and made enough profit to pay off the extra borrowing AND the mortgage. BUT, another repossession came on the market so we did it all again! The housing market took a bit of a dip but we still made a profit on the second house, and again could have paid the mortgage off. Daughter number one had had a baby by then and her house was too small, so we decided for her and her hubby to buy our bigger house and we would downsize.
Again, we had enough spare to pay off the mortgage but the house needed work, extension, new windows etc. Do we pay off the mortgage and save up for the work, or keep the mortgage?
In the end we kept the mortgage as it's still very tiny. Originally it was £32,000 but the advantage of getting 'more mature' is that all those insurance policies that had been taken out years ago are now coming home to roost!!
So for this, our forever home, (well, that's what hubby thinks!) we started with a mortgage of £32,000 ish, and paid off £7,000 when my endowment matured.
I had a look at the over-payment calculator and was amazed that even £15 per month makes 7 months difference!! We originally had the mortgage over 10 years, we're down to 8 years and 9 months even before any over-payments. I had a ruthless purge of the dd's and s/o's and manged to gather enough bits and pieces to overpay at least £15 per month. Any extra money I get (current account switching, for example) gets divided in 3, third for pension, third for mortgage, third for Christmas fund. Thanks Yorkshire bank!!
When I get my First Direct joining bonus, that will go in as well. I'm vote counting tonight, so that's more money in the pot.
Since March, so far I've paid off £100 and I'm determined that this will continue, so my hubby can retire early.

Wish me luck!

Forgot to add-mortgage outstanding £22,503.

CathA

Vote counting done, good night had by all!! That'll be a bit more in the pot for overpayment.

choccielover

Wow well done, sounds like you have had the right mindset for years, wish I had been more sensible when our first mortgage came along

However, never mind me. Good luck with your quest, have you set yourself. MF date? Something to work to

Chocs

CathA

I got a cheque from the insurance company today for £108. Bit more to add to the list.

CathA

choccielover wrote: »

Wow well done, sounds like you have had the right mindset for years, wish I had been more sensible when our first mortgage came along

However, never mind me. Good luck with your quest, have you set yourself. MF date? Something to work to

Chocs

Thank you. Not sure about a MF date yet, but I do like putting the overpayments into a calculator and seeing how many months/years it knocks off. We've got 8 years and 9 months left, not including any overpayments so I'll have to have a think.

Luckyinlife

I think your doing a great job :]

I think you could aim for 5 years and see how you go :] good luck ill follow with interest :]

CathA

Here's a question. Next year when I'm 55 I can start drawing one of my pensions. We're planning on using some of it to do the next phase of the house renovation (not done too bad so far, I'll list what we've done later). So, lump sum- pay off some more mortgage? I'd like to, hubby says keep it in case we need it for something else. Opinions please.

CathA

Renovations and improvements so far.

We had a small extension built to square off the back of the house, which is now a utility room/porch.

New electric fuse box, the other one was out of the Ark!

Two bedrooms completely redecorated, new light fittings, carpets, paint and curtains.

Loads of windows replaced, just the glass as a lot of them were misted.

Roof and cavity wall insulation put in and the loft boarded.

New log cabin built by us, my hubby needed a worskshop as the garage is too far away (and still filled with cr*p from the old house we've not sorted yet!).

Downstairs cloakroom (in avacado!) ripped out, wall moved and new shower and toilet put in.

Upstairs bathroom ripped out and re-done.

New fence panels put up, as the old fence blew down. Mind you, it's been held up with string for a year, so it's done well.

A lot of the stuff we've done ourselves, apart from the electrics (my nephew is an electrician) and the actual building of the exterior of the extension (we have a fab builder!). We've been lucky as each phase of any new work has coincided with ISA's and endowments maturing, so we've only had to dip into savings once. Considering we've only been here just over a year we've done quite well.

On a separate issue, got £100 bonus from a company the other day, so that's a bit more to divide up between my three main areas. Plus a standing order from my daughter for her pet insurance arrived the other day, the dd has already gone out of our account with no problem so I might just chuck that in as well. The next mortgage payment is due Monday so I'll update my figures then.

The sticking point at the moment is what to do with my pension next year. I can take enough out to pay the mortgage off completely, or we can carry on paying off bits and pieces. Hubby thinks leave it as it is, I'm leaning towards getting rid in one fell swoop. We still have quite a bit to do here, major kitchen overhaul is next on the list but we've got the money for that. What to do?

Opinions on pension money options welcome?

ourcornercottage

I'd compare the yearly pension increase and yearly mortgage interest. If mortgage interest is more then pay it off and then save what you would have paid monthly on mortgage into pension/investment/savings.

Obviously I'm no expert, there are people in here who are and hopefully they will pop up to help you and also I don't know your product details.

Hope that helps :-)

CathA

Monthly payment gone through, overpayment of £70 gone in as well. Down to £22,263.18. Just waiting for First Direct account switching bonus next, then payment from vote counting to add to next month's payment. Getting there!!

NorthernMonkey1

Mortgage rates are low, and stockmarket growth is currently higher.

I would have thought that keeping the money in your pension is a better bet at the moment, but with fairly regular reviews to ensure that this is still the best plan.

As always. Put the two options in a spreadsheet, then compare what they will cost you over 2, 5 and 10 years, then compare on the basis of what you know, not what you think