Mortgage Debt Free - Mad overpaying

David123456

Hello MSE forum folk,
My wife and I very recently became debt free, except our mortgage is still with us. I am 30 and my wife 25 we have owned property since 2011 and have been fortunate to make some appreciation with several sales and purchases since our first flat. I will just give the facts and hopefully the good people of the forum can help us be sensible with our next move. We our very serious about clearing the debt fast.

Our current mortgage debt is £327,000 against a property value of £430,000.
We pay £1140 a month repayment at the moment.

Net Income - Mine - £2700 after pension
Wife - £2400 after pension
Total £5100

We are looking at paying £1900 a month which gives us 15 years to clear the mortgage (I would be 45) or £2800 a month which clears in 10 years.

Are these realistic?, putting figures on paper seem easy but the reality could be different.
Should we just over pay our current mortgage or commit to higher standard monthlies?

Has anyone been super vicious with mortgage over payments to the point it hurts? Advice please.

We are fixated on the interest savings over the term which run over 100k!

Genuine comments are very welcomed.

Thanks everyone

David

freshcotton

Hi David

I think as long as you have some money put away for emergancies, you can go ahead and overpay as much as you can afford really. As you point out, the potential of saving on interest is incredible.

Our standard payment is £600, and we currently pay £1600 each month. If things change we can of course reduce the payment.

Good luck!

David123456

Thanks freshcotton,
Do you easily afford your over-payment? I agree that it should be voluntary in case anything happens.
If we can save £100k then retirement will be far sweeter.

freshcotton

To give you an idea, our total income is approx £4,300, We overpay by £1000 and put £1000 into savings (as we are limited on how much we can OP).

We can easily afford this as we don't waste money. I'm 30 and my partner is 36.

We are still having to buy a few bits for the house, but determined to have the mortgage paid off in 5 years, all being well.

I think if you set up high over payments, you will naturally adjust your spending and live on what is leftover. I doubt it's something you will regret

David123456

Thanks again for the reply.
Can I politely ask how big your mortgage is? I would love to pay off in 5 years but this would eat up all our income.

Miss_Moneysaver

I would overpay as much as you can afford but leave enough to live! Are you factoring in future plans such as the pitter patter of tiny feet? I have been part time since our children came along (ages now 11 and 7) and we have paid massive amounts in childcare. Since then, we have not been able to overpay as much as we would like.
I am possibly going full time again soon (after 11 years - eeekkk) so things set to change again.
But, yes, overpay the larger amount as long as you don't overstretch things. Good luck!

Miss_Moneysaver

I am the bigger earner so it hit us hard when I went part time.


It looks like you can easily afford to do it though. And, £100K will definitely make retirement very sweet. You sound very well organised!

David123456

Thanks MissMoneysaver

Its difficult to make cast iron financial plans - perhaps that is the point!
We are in a good situation but this most recent purchase (July 15) cleared us out after we had all the work done to the interior etc... So really need to put some back in the current account.

My wife has only just qualified as a solicitor - so wants to put some time between now and kids to keep things sweet at work.

I think if we can avoid taking equity out at all, we can keep to a fast repayment plan.

Miss_Moneysaver

You could pay it all off before kids come along - that would be even better! I was well into my 30's when I had my children.

freshcotton

my mortgage balance is approx £118,000 ( house value is £170k). I live in the Midlands so houses prices aren't too bad.

I often think whether im focusing too much on my mortgage and my partner thinks we should probably spend more of the money we earn, so it's not unusual to question yourself. But most days, I am driven by the idea of being MF asap and then focus on retirement.

I live by the mantra ... "Wealth consists not in having great possessions, but in having few wants" - Epictetus ... So a frugal (ish) life works well for me

Secret_Saving_Squirrel

Hello,

We paid off £65,000 in three and a half years, at a time when our joint income was about £5000. During this time we continued to have a good social life, bought a new car, I pad etc..... The big difference was that we were conscious of every penny and cut out all waste. We certainly never felt deprived, so I think you should just overpay as much as you can and take a break from it when you need to. We paid over the phone, rather than setting up a regular overpayment so that we had the freedom to pay more or less according to circumstances.

Good luck x