My Single-interest only-mortgage journey

edited 8 August 2015 at 4:59PM in Mortgage-Free Wannabe
125 replies 10.7K views
Monkeychops16Monkeychops16 Forumite
154 Posts
I've been Money Tipped!
edited 8 August 2015 at 4:59PM in Mortgage-Free Wannabe
Hello, I have been a member of MSE for a while and have recently become debt free. I have changed my user name as it was in reference to my old name and I am now divorced and this is my next chapter.

I took my mortgage out in 2006 and it is interest only. Lots of things have happened since then. The awful truth is that I have lived here for 9 years and not reduced the balance at all as I have an interest only mortgage and no vehicle in place ( I know this is bad!). The term has 16 years and 5 months left and I am on a high standard variable rate 4.95%. This is about £14.00 a day in interest :(

I am now going to chip away and make over payments as best I can. I am a single parent to two little girls and one is disabled. I don't earn much money but I am going to do my best. I have largely got to grips with money and spending over my debt free journey. I have YNAB (my best friend) and multiple bank accounts to transfer money into for a variety of categories.

I need to be better at not spending frivolously and meal planning. Currently my freezer is broken so next month I am buying a new fridge freezer. Then I will be able to batch cook and freeze things. The girls get free school dinners due to their age-the eldest for one more year so that saves a lot.

I have cancelled sky and have a pay as you go phone.

I have set myself a mini goal of paying off £3200 by April. Not sure how feasible this will be, still need school shoes, DD1 bday and xmas to sort...

I am obsessed playing with the calculator on here and reading the forum. I love people's diaries-I must be really nosey ha!

Does anyone know how I can work out the effects of small over payments please? I am rubbish with maths!

Any other advice/motivation welcome

Thanks :beer:
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Replies

  • A_Frayed_KnotA_Frayed_Knot Forumite
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    Sixth Anniversary 1,000 Posts Name Dropper Photogenic
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    Hi and Welcome:wave:

    By the look of things, you are well and truly on your way to sorting everything out, and although you see it as a negative having lived there for 9 years - look on the positive side and be glad you haven't lived there for 19 years and done nothing about it.:p

    So the way I look at it is you have given yourself an extra 10 years to sort things out.:D

    What you save on sky/phone/batch meals and no longer paying out for the debt you had, ought to make a good head start for you.

    Watch for the sales for school shoes and there are usually more sales just before kids go back to school, where you may be able to pick up some b'day/xmas pressies. 8 months till April but I would deduct off at least a month as you will be spending for xmas. Still there is always the council tax free months to get back on an even stephen.

    I am also obsessed with the o/p calculator but would love to know how to work out daily interest with/without o/p and how much interest would get added on if I paid £xx amount over.:o

    Good luck and hope to gain/share some calculations with you of some sort.

    A Frayed Knot
    Always have 00.00 at the end of your mortgage and one day it will all be 0's :dance:
    MF[STRIKE] March 2030[/STRIKE] Yes that does say 2030 :eek: Mortgage Free 21.12.18 _party_
    Now a Part Timer from 27.10.19
  • Monkeychops16Monkeychops16 Forumite
    154 Posts
    I've been Money Tipped!
    Hi and Welcome:wave:

    By the look of things, you are well and truly on your way to sorting everything out, and although you see it as a negative having lived there for 9 years - look on the positive side and be glad you haven't lived there for 19 years and done nothing about it.:p

    So the way I look at it is you have given yourself an extra 10 years to sort things out.:D

    What you save on sky/phone/batch meals and no longer paying out for the debt you had, ought to make a good head start for you.

    Watch for the sales for school shoes and there are usually more sales just before kids go back to school, where you may be able to pick up some b'day/xmas pressies. 8 months till April but I would deduct off at least a month as you will be spending for xmas. Still there is always the council tax free months to get back on an even stephen.

    I am also obsessed with the o/p calculator but would love to know how to work out daily interest with/without o/p and how much interest would get added on if I paid £xx amount over.:o

    Good luck and hope to gain/share some calculations with you of some sort.

    A Frayed Knot

    Aw thanks for the positive welcome. I didn't think of these things. I will leave the shoes until the end. I forgot about council tax that something to look forward to!

    Let's hope someone can show us how to to the calculations :A
  • Ali-OKAli-OK Forumite
    4.1K Posts
    Part of the Furniture Debt-free and Proud!
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    Subscribing! :D

    You're not alone - mine sat on I/O without repayment for a good while too, but I've started chipping away and feel like I'm making inroads now - and you will too :j

    Also a single parent, so it's great to share the journey amongst like minded and supportive forumites :D

    A Frayed Knot - I've got several home-made and downloaded spreadsheets that gives me info on with and without op's for interest. If you want to post figures (or I'll find your diary :D) I might be able to help.

    Ali
    Back on the DFW Wagon:

    CC - £3,300 on 0% til 04/2020
    CC - £4,500 on 0% til 02/2019
    Loan - £12,063.84 as at 4/1/18
  • sarahevie1sarahevie1 Forumite
    629 Posts
    Sixth Anniversary 500 Posts Combo Breaker Mortgage-free Glee!
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    Another single parent joining in to wish you luck. I think our kids must be similar age as my dd1 gets free school meals for one more year.

    I'm sure becoming debt free will have taught you all the skills needed for mortgage free, it's just another debt after all. I'll be watching with interest for hints and tips and cheering you on :)
    HOME
    Original mortgage free date Nov 2037
    Mortgage free August 2018

    Additional properties
    Mortgage 1 £108,000
    Mortgage 2 £45,000
    Teacher pension - DB scheme
    LGPS pension - DB scheme
  • LuckyinlifeLuckyinlife Forumite
    1.6K Posts
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    single parent myself

    i think 16 years you can clear it earlier i bet just depends on how and how much you can afford from month to month i wish you lots of luck tho

    do you plan to reduce the term or just get it payed off in 16 years
    Mortgage--- [STRIKE]£67700 March 15[/STRIKE] [STRIKE]£65221 April 15[/STRIKE] [STRIKE]£64983 July 15[/STRIKE] [STRIKE]£64780 sept 15[/STRIKE] Remortgage [STRIKE]£67295 oct 15[/STRIKE] [STRIKE]£66599 Nov 15[/STRIKE] [STRIKE]£65878.73 Dec 15[/STRIKE][STRIKE] £64834 1st Jan 16[/STRIKE] [STRIKE]Feb 16 £64,511.89[/STRIKE][STRIKE] March 16 £64,056.40[/STRIKE] [STRIKE]April 16 £62550[/STRIKE] [STRIKE]May 16 £62,396.20[/STRIKE] Feb 17 £60.800
    Emergency fund 23k
  • Hi MonkeyChops16

    When someone takes out a repayment mortgage the vast majority of the initial monthly payment goes towards interest, though over time the debt reduces more quickly due to the snowballing effect. Interest only is simply a mortgage that would theoretically take infinity to repay as the interest equals the repayment.

    Fortunately, by overpaying even just one pound you are in effect converting your interest only mortgage to repayment (albeit the term would be hundred of years). Keep the standard payments the same as you make additional payments and you will start to take advantage of the snowball effect.

    Obviously you will need to overpay by much more than one quid to clear it within 16 years, but my point is that ANYTHING you can pay down will have a dramatic effect in saving interest over time - just make sure the bank does not reduce your monthly payments.

    As well as the MSE mortgage calculator there is this one by Locoblade that has many options to play around with.
    http://forums.moneysavingexpert.com/showthread.php?t=1157173

    MC
    Initial mortgage (Dec 2012) £108,000 3.84%APR MF date Jan 2038

    Mortgage remaining £68285
    Daily interest £4.28
    2017
    MFW #14 £3746.90/£10,000
  • A_Frayed_KnotA_Frayed_Knot Forumite
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    Ali-OK wrote: »
    Subscribing! :D

    A Frayed Knot - I've got several home-made and downloaded spreadsheets that gives me info on with and without op's for interest. If you want to post figures (or I'll find your diary :D) I might be able to help.

    Ali


    Haven't posted up any figures, as a bit :o:o by the tiddly amount (by some standards) but then iits in proportion to my tiddly salary:o Maybe I'll get round to it after Monday when I see the mortgage advisor about a new deal. - Hate to think how much has been wasted not entering a new deal earlier:(
    Always have 00.00 at the end of your mortgage and one day it will all be 0's :dance:
    MF[STRIKE] March 2030[/STRIKE] Yes that does say 2030 :eek: Mortgage Free 21.12.18 _party_
    Now a Part Timer from 27.10.19
  • A_Frayed_KnotA_Frayed_Knot Forumite
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    Sixth Anniversary 1,000 Posts Name Dropper Photogenic
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    Hi MonkeyChops16Obviously you will need to overpay by much more than one quid to clear it within 16 years, but my point is that ANYTHING you can pay down will have a dramatic effect in saving interest over time - just make sure the bank does not reduce your monthly payments.

    As well as the MSE mortgage calculator there is this one by Locoblade that has many options to play around with.
    http://forums.moneysavingexpert.com/showthread.php?t=1157173

    MC

    They done this to me, after making my 1st large(ish) o/p and not knowing any better thought that must be the way they do things.
    Always have 00.00 at the end of your mortgage and one day it will all be 0's :dance:
    MF[STRIKE] March 2030[/STRIKE] Yes that does say 2030 :eek: Mortgage Free 21.12.18 _party_
    Now a Part Timer from 27.10.19
  • Monkeychops16Monkeychops16 Forumite
    154 Posts
    I've been Money Tipped!
    single parent myself

    i think 16 years you can clear it earlier i bet just depends on how and how much you can afford from month to month i wish you lots of luck tho

    do you plan to reduce the term or just get it payed off in 16 years

    Oh I would just like to have it paid off thanks. Anything else would be too optimistic!
  • AlchemillaAlchemilla Forumite
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    Goodness, you have your plate full.

    I have been a single parent so sympathise.

    Welcome and good luck! Have a look at Mr Money Mustache for inspiration.
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