Freedom is never free; MFW in 2 years?

Gen_Y_Saver

Cheers Luckyinlife.

I have added another field into my signature. Using MSE's Mortgage Overpayment Calculator, I have calculated roughly how much interest I have saved by overpaying!

Very powerful motivational tool. I highly recommend it!

Peace x

freshcotton

Hi, well done on your progress. I can't believe how much interest you save per £1000 OP, it's a great motivation.

Gen_Y_Saver

Thanks freshcotton.

I know - its very motivating.

But also eye-opening/scary at the same time. Remember, MSE's calculator assumes the same rate throughout the duration of the term (in my case 2.49%). If you assume a more historically realistic figure, say 5%, overpaying £9,500 would have saved me c£17,500. And my mortgage loan is quite low (originally £65,000)...

Other examples are more scary.

Borrow: £100,000
Rate: 5% (assume rates will rise in the next 25 years)
Overpay: £10,000
Save = £21,700!

Pre 2008, a typical variable rate was c.7% (http://www.housepricecrash.co.uk/graphs-base-rate-uk.php)...

freshcotton

Good point, I often overlook the fact that rates can only really go up and that's what will happen eventually.

Gen_Y_Saver

Hi all,

My other half got paid late this month. She also made an overpayment of £1,000. Again, this saved us approximately £800 interest. Have that HSBC!

Over and out.

GYS.

Gen_Y_Saver

Made a cheeky overpayment of £40. Saved me £33 in interest.

Every little helps and all that!

Gen_Y

Peace x

Gen_Y_Saver

Hi all, Gen_Y here again.

Got paid this week and so I made another overpayment of £1k. Again, this saved me another £800 in interest.

Consistency is key. Xmas or no Xmas, I'm trying to stick to the plan! I suppose I want freedom for Xmas more than I want material junk.

All the best to everyone out there.

Peace x

Gen_Y_Saver

Mortgage went out a few days ago (300ish). I also overpaid a cheeky £45 (saving c.£35 in interest).

Mortgage is currently down to £53,500.

I'm going to make a big push in 2016!

Fingers crossed for all your freedom hunters out there.

Gen_Y

Gen_Y_Saver

Okay, final update for December 2015!

My girlfriend got paid today so she made her £1,000 overpayment. This has brought the mortgage down to £52,475.

From Sep 15 - Dec 2015 (4 months), we have reduced the mortgage by £12.5K. According to MSE's Overpayment calculator, this has saved us c£9,000 in interest and shaved 6 years off the mortgage!

Hope everyone has a great NYE and here's to freedom in 2016!

Gen_Y

Gen_Y_Saver

Right all, another update.

Mortgage is down to 49,860. Psychologically feels good to below the 50K barrier.

A quick question to those out there who are better at maths than me. Is it best to keep overpaying each month like I'm presently doing? Or is it more efficient for us to keep our savings in an high-interest account and then pay off a big chuck once a year?

Thanks.

Good luck to everyone else out there!