Eye on the prize

Rosanante1

Hello All.

I thought I'd start my mortgage countdown as we're in touching distance of finishing our mortgage.

Brief summary: this is our third house and on each of the houses we took out an endowment mortgage. (I know, I know!). Of course the endowments were predicted to come up short, so several years ago we negotiated a series of two-year deals which were part interest, part repayment, with the final target being £70K. This being the amount the endowments would yield at worst case scenario.

So here we are now, nearing the end of our latest two year deal with the NatWest in July. There are 10 months left and we will have to revert to the SVR until the (part interest / part repayment) leaves us with £70K to pay. (so far so good).

Two endowments have been paid out. £22K & £15K. The last one is due to pay >£33K in May next year. Then we'll be free!!!

Not sure what to do. Is it best to pay in £37K against the current outstanding amount (£76K) when this deal ends? I suppose that will reduce the interest and possibly the term. Can't work it out. I've spoken to the Natwest a few times but I'm still not sure what's best, so looking for some sage advice before I do anything.

bexster1975

Hello there!

I'm afraid I am not a sage, but wanted to say well done, it's a great feeling being so close to the end. I imagine paying off your lump sum once deal ends will be the best way to go, but I'm sure someone will say if I'm wrong!

What do you hope to do once you are mortgage free?

Bexster

getmore4less

what rates the deal?

Have you been maxing overpayments since the endowments paid out?

Check the date of the end of mortgage and endowment payout.

Don't shorten the term if you don't get the final money till May.

If the bits are the same rate it won't make any difference as long as you keep the normal payment up at the level needed to leave less than the endowment payout.

depending on rate you will have around £100pm less interest to use as an overpayment.

Stick the numbers in a calculator.
http://www.whatsthecost.com/mortgage.aspx

set to interest only, stick in your total payment, then knock 37k off the outstanding amount it will tell you how much is left in 10months.

Rosanante1

bexster1975 wrote: »

Hello there!

I'm afraid I am not a sage, but wanted to say well done, it's a great feeling being so close to the end. I imagine paying off your lump sum once deal ends will be the best way to go, but I'm sure someone will say if I'm wrong!

What do you hope to do once you are mortgage free?

Bexster

Yes it feels great to be so close now after 24 years! I really don't know what we'll do once we're free of the mortgage. Relax and not worry that I might lose my house if I lose my job. Just gotta keep working for the duration now. We will probably throw a party! :rotfl:

Rosanante1

getmore4less wrote: »

what rates the deal?

Have you been maxing overpayments since the endowments paid out?

Check the date of the end of mortgage and endowment payout.

Don't shorten the term if you don't get the final money till May.

If the bits are the same rate it won't make any difference as long as you keep the normal payment up at the level needed to leave less than the endowment payout.

depending on rate you will have around £100pm less interest to use as an overpayment.

Stick the numbers in a calculator.
http://www.whatsthecost.com/mortgage.aspx

set to interest only, stick in your total payment, then knock 37k off the outstanding amount it will tell you how much is left in 10months.

We haven't been able to make overpayments because we were tied into deals, but of course now we're on the SVR in July, we can make overpayments, hence my question regarding what to do with the endowments that have paid out since. We've also been saving our endowment payments which have stopped, as a kind of savings plan / shortfall fund.

The original mortgage was £100K but as I've said, we are heading for £70K to match the endowment payouts. Currently, the balance is £76K on which we have to pay SVR on part interest, part repayment for the final 10 month run in.

So the question still stands. Wait until I've got the full £70K then pay it off at the end, or pile money into it between now and then.

getmore4less

Deals usualy have overpayment options like 10% a year or £500pm or some other.

Pay or not is down to the mortgage rate or saving rate.