Journey to £0 by 2020, with a few bumps along the way

chelseablue

PurpleFairy26 said:

If you can make OP to the loan, could you not say pay 50% off so you get the best of both worlds as surely that would still save you some
interest on the amount paid off. Can you also OP say £13/ month so the balance always a nice round number 🤣

As for OP mortgage, sorry if this sounds harsh or isn’t valid but I was more thinking if you and your husband separated how that would work with OP. Obviously that hopefully will never happen but your views on money are at such odds and you have such different approaches it’s a shame that your hard work and thriftiness isn’t matched my him. However, if you keep a record of OP this would mitigate some of that risk. 

Yes I can overpay as much as I like so that’s a good idea. 

My savings are currently with Marcus but they did send me an email to say the rate is dropping in July so will need to look around again. 

Yes that’s the one thing that puts me off overpaying the mortgage, if we got divorced, the lower the mortgage the more I’d need to buy him out. 

Not sure what to do, but I don’t want a mortgage for another 28 years. For it to be paid off when I’m 50 would be great 

PurpleFairy26

chelseablue said:

PurpleFairy26 said:

If you can make OP to the loan, could you not say pay 50% off so you get the best of both worlds as surely that would still save you some
interest on the amount paid off. Can you also OP say £13/ month so the balance always a nice round number 🤣

As for OP mortgage, sorry if this sounds harsh or isn’t valid but I was more thinking if you and your husband separated how that would work with OP. Obviously that hopefully will never happen but your views on money are at such odds and you have such different approaches it’s a shame that your hard work and thriftiness isn’t matched my him. However, if you keep a record of OP this would mitigate some of that risk. 

Yes I can overpay as much as I like so that’s a good idea. 

My savings are currently with Marcus but they did send me an email to say the rate is dropping in July so will need to look around again. 

Yes that’s the one thing that puts me off overpaying the mortgage, if we got divorced, the lower the mortgage the more I’d need to buy him out. 

Not sure what to do, but I don’t want a mortgage for another 28 years. For it to be paid off when I’m 50 would be great 

Agree it would be fab to have it paid off by the time you’re 50. Could you ask over on the mortgage free board or alternatively contact a solicitor (several do 30 minutes free advice, which we be sufficient for your question) as in theory if you OP it now you would need even less to buy him out as your share would be greater (and you would have saved even more in interest you didn’t have to pay on it) but I’m 
not sure how that works in reality. 

I think all interest rates are a bit rubbish. Have decent savings for the first time and I’m getting a rubbish return. But will have a look at what Marcus has to offer. 

enthusiasticsaver

chelseablue said:

Its currently all in cash, I took it out of my s&s isa in March and am actually glad I did. 
The loan rate is 2.9% and Im getting 1.2% on my savings 
Would like to keep around £20k as an emergency fund, but this would include using some for when I need a car (maybe use around £6k-£8k for a car??) 
When I've got that saved maybe start overpaying the mortgage? Been thinking during these uncertain times that I'd feel a lot more relaxed if we owned the house outright
Currently owe £209,000 with 28 years still to go 

Given that the loan interest rate is almost three times as much as you are getting on savings I would get rid of the loan then focus on rebuilding the savings. As you say once you have sorted out a replacement car then overpaying the mortgage sounds like a good idea.  Keeping track of any overpayments is a good idea. 

chelseablue

I've had an idea! 
Was thinking; now that I've got £15k saved, instead of saving £1,000 a month like I have been just pay £1,000 off the loan each month instead? That would clear it in 6 months
Good idea or not? 

enthusiasticsaver

chelseablue said:

I've had an idea! 
Was thinking; now that I've got £15k saved, instead of saving £1,000 a month like I have been just pay £1,000 off the loan each month instead? That would clear it in 6 months
Good idea or not? 

Yes I think it is a good idea.  That would get rid of it by the end of the year? £15k is still an excellent emergency fund.  

enthusiasticsaver

It also keeps your savings intact in case you need to replace the car although obviously it would be better doing it next year when you will have more than £1k each month to save towards it once the loan is gone. 

chelseablue

Yes it will be paid off this year
I’m hoping my car has another few years left in it as there’s nothing wrong with it (fingers crossed) and it’s only done 60,000 miles which is not bad for a 14 year old car 

Bizzywizard

Why not just pay off you interest incurring debt in full? You are loosing money by keeping the debt. Martin Lewis has a post about using EF to pay off interest incurring debt on the main site, it’s well worth a read. He puts it so well.

chelseablue

I’ve had a look and last month £14 interest was added to my savings account and I think £8 was added as interest to the loan. Will call Nationwide to confirm. 

If I’m correct I’m gaining more by having the larger savings amount. But of course paying off the loan will mean I’m £187 a month better off. Could pay it off and just spend the next 7 months building back up my savings 

ohdearhowdidthathappen

I'd definitely pay off the loan and then just concentrate on building savings back up.  Well done on saving such a big pot.