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Advice, please

edited 30 November -1 at 1:00AM in Mortgage-Free Wannabe
6 replies 811 views
reckless_ladybirdreckless_ladybird Forumite
20 Posts
edited 30 November -1 at 1:00AM in Mortgage-Free Wannabe
Hi!

After saving for a long time, me and my husband finally managed to get a mortgage on a house in July last year. I'm already keen to start making overpayments. However, I'm not sure this is wise in our current circumstances. I find the MFW threads very inspirational and any advice from you guys will be very welcome!

House value - 305,000
Mortgage total today - 238,000
Monthly payments - 1020
Interest - 2.04%, 2 years fixed

We have about 10k savings at the moment. We already did one OP of £2000 a couple of months ago towards the mortgage, which I thought made a huge difference and I'd love to keep paying in.
However, since 16th Jan I'm on Maternity leave and I'm planning (if all goes well and baby arrives safely) to be away from work for a year. I'll be getting the statutory maternity pay (1400 less than my salary) for the next 9 months and then last 3 months - no pay, at all.

Obviously, we will need the easy access cash buffer for all eventualities. How much do you think is preferable for a young family to have in savings before considering making any OPs?

Also, with ISAs having the worst interest rates - what saving accounts are better?

And, finally, I've read on here people find ways to make little extra cash on the side to then add towards their OPs (i.e surveys). While on maternity it will be very useful to know what I could be doing. I already do yougov and iSay Ipsos surveys and I use cashback sites but the income is minimal - hardly reaching double figures in a year.

There's a lot of things I'm clueless about so any tips really will be very much appreciated!

Best,
RL x

Replies

  • bexster1975bexster1975 Forumite
    1.6K Posts
    Part of the Furniture 1,000 Posts Photogenic Bake Off Boss!
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    Hi and welcome

    How much emergency savings is a " how long is a piece of string" question. In your position, I would honestly wait and see how things go on maternity pay. If you find you are managing well enough, why not add to the " last three months pot" first. When you think you have enough in there, worry about OPing.

    In terms of making extra cash; eBay, car boot sales, all rewards and cash back sites, lots of websites let you test products for a bit of free publicity (Bzzagent) so free stuff there. Cutting spends is easier when you are at home ( tho prob not for a new mum!)

    Hope all goes well. I'm assuming you are due soon?

    Bexster :)
  • Thank you, Bexster. Waiting and seeing how things go for the next few months is very good advice!
    Yes, due very soon!! :)
  • KittenkirstKittenkirst Forumite
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    I'd completely echo what Bexster has said, leave the funds and work on a wait and see principle. That way if you are in a good position in twelve months you can OP it then, without leaving yourself short at a very busy time when you want to be enjoying time with your new arrival :)
    Mortgage 1- 10/16 £170.995- Overpayments to 06/21: £13,784 (25% extra!): house sold & equity= £88,563.12 after fees!
    Mortgage 2-Due 06/21: £301,691 (!) Rate 2.2%. Plan to clear it before 30 years!!!!!!
  • Thanks, Kittenkirst. A year sounds like a long time but I understand it's the sensible thing to do.
  • LadyGnomeLadyGnome Forumite
    599 Posts
    Sixth Anniversary 500 Posts Name Dropper Combo Breaker
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    Once the baby arrives the thought of OP's will drift from your mind for sometime.;) Don't put yourself under financial pressure during your Maternity Leave. The OP you have already made is working for you and will have a positive knock on effect on each future payment as your interest will be lower due to the reduced capital.
    You can reassess once you are more settled with the baby.
    Mortgage
    Start Nov 2012 £310,000
    May 2021 £180,773.53
    Reduction £129,226.47

    End Sept 2034 (but I have a cunning plan...)
  • Thank you, LadyGnome. I appreciate you reading and replying.
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