Project Mortgage Neutral Begins

A_Frayed_Knot

Hi AJ

I wasn't tidying every day as my mortgage interest only went on at the end of the month, sorry if I confused things with you thinking it was every day.  I think I may have been a bit short myself had I done that.

Your doing great the way your going about it, so no need to o/p any more than you have already, that's a huge chunk you have just paid. 

It's exciting waiting on that letter, hope it really surprises you in a good way.

savingholmes

Glad you clarified that AFK - I think because I am a fritter spender - I am trying to redirect that a little - while still taking care of our CC situation. At the moment the target CC we are paying off is DH's so I can't see it on e-banking so it isn't motivating. I will need to get e-banking set up for my next target CC so that I am motivated to over-pay - although - also tempted by bigger EF.

AJM you are doing amazingly well - glad you are taking a breather though.

Suffolk_lass

savingholmes said:

Glad you clarified that AFK - I think because I am a fritter spender - I am trying to redirect that a little - while still taking care of our CC situation. At the moment the target CC we are paying off is DH's so I can't see it on e-banking so it isn't motivating. I will need to get e-banking set up for my next target CC so that I am motivated to over-pay - although - also tempted by bigger EF.

AJM you are doing amazingly well - glad you are taking a breather though.

I tidy mine into an instant saver account and then deploy it from there. Very occasionally I transfer some back to cover a big bill but it is usually a combination of EF, OP holding space and credit card payment pot. Works for us!

Well done AJ that is a big lump you are no longer paying interest on. I did not understand the post you made about an original mortgage (maybe on a mortgage thread rather than your diary) that is a good deal - I thought you quoted over 2% (maybe 2.6%) interest. Why is that a deal worth sticking with?

ajmoney

So I ended up tidying my current account by £2.73 yesterday, the money is now in my ISA.

I will try and explain the mortgage situation as I see it, here are the figures

£67655.19 1.19% monthly payment £303.54 this is the one I need to remortgage in July

£25881.76 2.68% monthly payment £134.43

£4534.58 1.34% monthly payment £29.94 this is the one I am trying to get rid of first

The interest rate on the middle mortgage has been static since 2008/9 and is a lifetime tracker so while it still tracks the base rate it will never come to the end of a term and shoot up.  It has a collar on it of 2% so I missed out on a lot of reductions in price but equally the monthly amount will not rise for a long time.  The other bonus is if the interest rates rise too much for me it has a facility that means I can fix at any point although I can't move back to the tracker after this.

I am always working on paying down what I might not be able to afford.  I am paying the smaller one first as it was a top up mortgage to get this house, once it has gone I am back to the stage I was mortgage-wise when I was living with Mr AJM.  It might seem ludicrous paying the largest one next, when I moved a year ago this was at 1.84% and will rise with any base rate hikes and with the amount of mortgage the monthly standard payment might get very high and as you will see is already the highest monthly payment.  I have savings to cover the 2.68% one should I need it.  By the time the collar comes off my middle mortgage the interest rate on the larger mortgage will be far above this.

I don't know if this makes sense in the way I have explained it but I am at ease with this situation although every time I remortgage I discuss it with the advisor. 

ajmoney

I managed to buy SR flour for the first time since lockdown today so I might do some baking tomorrow.  Tidied my current account so another £2.30 into my ISA.

ajmoney

My mortgage is now below £98k and it is so low it will dip below £97k next month :)My smallest mortgage is now below £4k which is great as it started just over a year ago at £10414 the down side is I know I have the money in my ISA to get rid of it but I am sticking to my slightly more sensible plan, make my normal OPs and build my savings up a little.  I will review this before I remortgage in July as it will be under £3k by then.  Based on today's interest rates etc I am on target to be mortgage neutral in Feb 2026 and I am hoping to MF 3 years later.

Erm...can anyone tell I am getting a little excited by all this right now?!

Edit, does anyone know of a reliable spreadsheet for calculating OPs etc?  I have just looked at all the details I had put in which I knew were correct but it is showing the wrong total for my smallest mortgage.  The bonus is I am 2 months ahead of the payments but it is throwing my calculations a little.

Suffolk_lass

OK, I get what you mean about your mortgage. I swapped ours in 2002 to a tracker that is 0.49% above the BoEBR and have not regretted it. At the time we were having a large extension built and lumped everything in together. We have since moved house, "porting" it with us. It originally had a 10% OP limit per year but that is long-gone. Just the early redemption fee stopping me paying it off really. If you are looking at remortgaging in July have you looked at that Mortgages part of the main site ahead of meeting your advisor? - it talks about the timing to get the best deal and there are some toggle fields you can play with. I get that the collar and cap is reassuring. Worth exploring if a 10 year fix is available for all three to give yourself greater predictability if that is your concern. I am always looking at fees and penalties when I evaluate these things - the hidden costs.

I bookmarked a spreadsheet on the forums a few years ago - a quick look suggests it is still being maintained but I am not using it - the link is here if you want to have a play. I found the Skipton BS mortgage calculator to be good enough for me, with a field for each of mortgage capital and interest rates and then toggle sliders for duration and amount I am paying so you can see the impact. I have just had a look and the graph display seems to have disappeared.

ajmoney

SL Thanks for your reply.  I will take a look on the mortgage board although I admit to finding some of the other boards a little scary!  I am quite happy on tracker mortgages and the ability to overpay, especially as I don't have a cap on the amount I can pay or any ERCs on any of my mortgages.

I have just made a cup of tea so will have a play with that spreadsheet and see what that comes up with.  At least it is showing the wrong figures at a benefit to me!

ajmoney

Last week's large OP has shortened the term on the smallest mortgage by 5 years and 3 months.  I am expecting another letter from the bank in the next couple of days following on from the other OP.

A_Frayed_Knot

Wow - that's fantastic !!!  A huge amount of time reduced on your mortgage.  Can't wait to hear what you are actually down to with your other o/p.

Exciting times.  Congrats.