Think I might have a plan?

22 Posts
I have 2 mortgages on my house. I ported the 1 across from my old house because it was a good interest. The second is the extra I had to put to fund the house.
Mortgage 1 £50,500 @ 1.5%
Mortgage 2 £22,000 @ 5.2% (fixed for 2 more years)
My plan is to pay off mortgage 2 at the end of the fixed term.
So far I have £7500 towards it. I will add a further £625 per month, giving me a total of £22,000 at the end of the 2 year fixed term. If that leaves me with any spare cash (I will still be paying the normal mortgage amount on top for 2 years) I will put it to mortgage 1. I will then carry on paying £625 + the monthly amount i'll be saving from not having to pay mortgage 2. I will save these in high interest accounts and then pay 10% each year.
That's my plan. It sounds good I just hope I can stick to it!
Mortgage 1 £50,500 @ 1.5%
Mortgage 2 £22,000 @ 5.2% (fixed for 2 more years)
My plan is to pay off mortgage 2 at the end of the fixed term.
So far I have £7500 towards it. I will add a further £625 per month, giving me a total of £22,000 at the end of the 2 year fixed term. If that leaves me with any spare cash (I will still be paying the normal mortgage amount on top for 2 years) I will put it to mortgage 1. I will then carry on paying £625 + the monthly amount i'll be saving from not having to pay mortgage 2. I will save these in high interest accounts and then pay 10% each year.
That's my plan. It sounds good I just hope I can stick to it!
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Are you allowed to pay 10% off a year ? off the 22k one ? if so once you maxed this out as you say great plan :]
Emergency fund 23k
Yes I can pay 10% off both mortgages with no penalties and after august 2018 I can pay off both mortgages also with no penalties. Obviously i'm going to target the higher interest rate one first.
I never even thought of paying the 10% a year off, That will be my first overpayment to do! Thanks for that tip. I'm new to money saving i'm just too used to spending it instead.
The maximum is 10% a year.
So far i've got the 10% sitting in a Tesco account earning 3% but as my mortgage is charging 5.2% I may as well pay it off there giving me less to pay back and less to pay interest on!
I could really get into money saving, just wished I would have done it years ago.
The £625 a month I need to save is going into a new account which I will paying in weekly so I can see it grow quickly and help keep me motivated.
I have just made my first weekly payment of £156.25.
by paying off the 10% in one lump now will save you on interest also so this months interest the next months interest you pay you'll see it drops down and more of your normal payment will come from the mortgage it self so there is no negative to Overpaying your mortgage only positive.
Still enjoy yourself tho and save its all about balance :]
Emergency fund 23k
Thanks.
Edit...The one I have found is budgetbrain planner. It doesn't have the section on savings you already have or other assets you have which calculates your net worth. Am I missing something?
http://www.stoozing.com/calculator/soa.php
Baby Step 2 - Pay off all debts except the Mortgage - £9,326 to go
Baby Step 3 - Save 6 months of expenses into full Emergency Fund - £4,300 to go
Baby Step 4 - Put 15% into Pension
Baby Step 6 - Pay off the Mortgage early
Baby Step 7 - Live like no-one else