What are you top tips?

lilly81

Hiya,
We got our first mortgage on the 22nd July.
We love the idea of paying off our mortgage quicker, as who wants to be paying off a mortgage until they are 70?

What are your top tops for somebody just starting out?

Our mortgage is with nationwide and we can pay up to 10% extra with no charge

Thanks
Lilly x

PinkGladioli

Make sure you get your savings up again first.

juststuff123

Get to love spreadsheets! Work out your current state of affairs, so you've got a solid base to work from. Then you can look at how you can afford overpayments / savings and see how that will reduce your mortgage.

newgirly

My top tip is to start a diary on here and read other people's mfw diaries, there is lots of support and ideas.

Make overpayments on a regular basis to keep it in the forefront - even 5p a day or "Tilly tidies" rounding up balances on your current account and transfering the pennies over, it all adds up.

The old style boards are useful for ideas on how to cut grocery and household costs, best of luck

vicsmiles

I would say write out a budget and stick to it.
I allocate say £200 a month for food each time I spend anything I deduct it from the £200 I then never go over what I have budgeted.
We are also with nationwide and make online payments is really easy so weekly I make a payment.
I breakdown the large sums to smaller goals this week it is 5 non spend days I'm determined to do it or pay off £4000 instead of the £100,000s I owe
Finally reading diaries on here getting ideas on what others are doing meeting like minded focus people it seems a bit of a stigma not to talk about financial stuff with friends but on here you can talk away and it not feel awkward

Paulinus

Hi
I managed to pay double for about 8 years luckily while the low interest rates have been going. Take advantage while you can as that will make a serious dent in your mortgage.

Also re the 10% overpayment maximum.
When I originally had a tracker I could overpay what I liked, when I shifted toa fix 2 years ago they only allowed 10%.
Remember this it is 10% of THE REMAINING AMOUNT.
EG. IF YOU OWE £100 K THE MAX IS £10K OVERPAY
IF YOU OWE £60k THE MAX IS £6K OVERPAY

I didn`t quite twig this until last year, but have put the extra elsewhere so I can add to my deposit as I am moving house soon (would have been better in the mortgage but hey)

I have had an offer on a house accepted using the sale from my present place as the deposit I will only have £30k to pay off.... I plan to do this in 2 years double overpaying again .... then I will be mortgage free..... just got to keep my job!

p.s. look at the MSE overpayment calculator every couple of months it is good psychological positive reinforcement to keep you on track!

User1489

Hmmm, my top tips.

1) Write down net income each month, write down what you HAVE to spend each month (mortgage, council tax, electric, gas, water, phone, wifi) then what you WANT to spend each month. For example, my fixed bills cost me c£1k, I give myself £500 fun money and the rest goes to the overpay. It's disciplined but after being frugal for years to buy this place, I'm just continuing that to pay it off. Weird huh. It'll be worth it when I'm mortgage free at 40 and and I have a disposable income of 2k a month and all my mates are still renting.

2) Remember this: You borrowed (for example) £100,000. In the agreement you signed with the bank, you will probably pay them back £165,000 because of the interest. Therefore, every time you pay £1 of now, you are actually paying off £1.65 - a pound of principal, plus 65p of future interest that will not occur. Check your key facts statement from the bank, it will tell you how much you pay back for every £ borrowed. That was what zapped me into MFW!

3) ENJOY THE RIDE!!! I can be way too harsh on myself. It can affect my mental health. I constantly want to forfeit things so I can pay extra off and get there quicker - but the reality is, I will have a mortgage, even with my accelerated plan, for another 6+ years. That's a long time to go without having any fun, right? So still have fun! I still have fun. BUT. BUT BUT BUT...

Instead of paying £25 to go to Brighton pride I volunteered to help out on a stall there. I got a free wristband for the entire weekend. My friend has an NUS card - we go to town together and I use it for the discount. I make my own lunches now and save hundreds (yes really...) a month. If I want to race in a triathlon, I see if I can volunteer for another tri that the organise has to get a free place in the one I want to race. I used to want everything brand new. Now I use eBay because paying off the mortgage means more to me than having a brand new item when a used is just fine. And so on and so on.

Whatever you decide, and however you decide to do it - congratulations on making a choice, and good luck.

Man v Mortgage

edinburgher

Be true to yourself, but don't get caught up in overpaying your mortgage to the extent that you ignore the other elements of your financial life.

Compound returns from investments and the value of tax breaks can significantly exceed the benefits of having no mortgage (although the sense of peace of mind appears to feel very different for no debts vs. lots of investments).

Catslovelycats

I started overpaying by chucking in little amounts - eg monthly CA interest, any spare money in my CA the day before payday. Little bits like that always helped me out and later I found myself in a position to be able to pay off bigger amounts.

redmalc

My son and his partner purchased a little house in 2007 and the purchase price was 125K ,they had a 40k mortgage from Nationwide over 25 years and a loan from me for the 85k.
They do not earn much over minimum wage each and have a 5 year old and a decent car but have still managed to clear their mortgage this Xmas by ploughing all of their extra money into over payments each month.
It goes to show if you are careful you can live without credit cards and debt