Gonna pay off this mortgage the offset way! 😀

Rosie_D

Hi there :hello

I'm Rosie D & I've been reading some of you lovely people's diaries & I'd like to join in please!

We have an offset mortgage which is interest only (boo) but to be honest we don't want to change it to a repayment mortgage, we are just gonna pay what the repayment amount should be every month into our offset account instead. It has the same effect as repayment but is a lot more flexible, if you know what I mean.

The years are ticking on & my hubby is a few years off 50 & so we want to pay any extra in if we can, we don't want to still be paying this bloody mortgage off in our 60's!

Any money that gets put into the account will stay there, but it's also gonna be classed as an emergency fund too.

Whenever the balance gets above £20,000 the extra will be paid directly into the mortgage :T

I'm so excited to be starting this journey & hopefully this diary will keep us on the straight & narrow.

Thanks for reading this far lol

Rosie D

Lrimas

Welcome to the board! There are a few people here who are aiming for mortgage neutral instead of mortgage free so you are in good company. It sounds like you have an excellent plan and is well on your way to more freedom.

Good luck with your journey!

Rosie_D

Thanks for your welcome Lrimas! I can't wait to get started!

A bit about our mortgage

We are on a fixed rate of 2.39% until the end of June 2017. As I said it's an interest only offset mortgage. We have an outstanding amount of £134,000 with a term of 18 years.

At present we pay £300 per month just in interest. I've been on the mortgage calculator on here & the repayment amount should be £765 per month. I'm going to set up a standing order for £800 per month & pay the interest part from this & keep the rest in the account to build up over the years until we are mortgage neutral.

I have heard that you can pay your mortgage payment every 2 weeks instead of once a month & this will pay an extra payment per year without needing to find any extra money! Win win! So this is what I'm going to do!

Rosie D

newgirly

Hi welcome, I am interest only and have just got our first offset mortgage. It's quite nice having an emergency fund for the first time too now. Best of luck with your new diary

giblet1979

Hi RosieD
Lots of luck with your mortgage journey - I've just joined this board tonight also (having been a DFW before) so would love if we could cheer each other on
Gib xx

Rosie_D

Thanks for the welcome Newgirly & Giblet. I'll definitely be following you both with interest!

I love offset mortgages but not really used it to our advantage yet to be honest so that's why we're going to start as we mean to go on! The idea is that we don't have to save the full amount of our mortgage up, one day the savings will have gone up & the mortgage will have come down so far that they will just meet. That's the beauty of the offset!

Here we go!

I've already put some money into the account to start us off & I'll just keep adding the extra through the month so that we don't feel the full pinch at once lol. I'm going to be looking at our whole finances so I can work out how to do this. Feeling really motivated! :j

Rosie D

Lrimas

Rosie_D wrote: »

I have heard that you can pay your mortgage payment every 2 weeks instead of once a month & this will pay an extra payment per year without needing to find any extra money! Win win! So this is what I'm going to do!

Rosie D

I don't think that is completely correct. If you pay every two weeks you will make 26 half payments a year, so 13 payments. That is one more, but the money is not going to just magically appear - there will be two months where you have to pay 3 times (so 1.5 times your normal mortgage amount).

If you do get paid fortnightly it is an excellent plan, but if you get paid monthly you might atruggle those two months.

MallyGirl

Hi there - I am another big fan of offsetting. My rate isn't as lovely and low as yours but it has been worth paying slightly more for the flexibility it has given us. We have 'overpaid' but also bought vehicles, done up an outbuilding into a home office, built an orangery, etc without having to take out loans. Now that we are so close to being mortgage neutral using 0% credit cards my next task is to get us actually earning interest on any excess (which is quite a challenge with today's rates). Our last endowment pays out next January and it should take us just into the black on the actual mortgage.