Sorry Mortgage, you’re now under attack

Ogden

On 29 March 2018 I’ll be paying off my last credit card debt that I’ve needed to get off my back for years! (I will still have one cc account, with a balance of about £1200 which defaulted years ago and so isn’t incurring interest, and the collection agency are taking an amount each month. I am inclined to just leave that be for now)

I have been struggling with huge amounts of credit card debt since about 2004 so it seems a little unreal!

My April pay day and onwards will leave me then with about an extra £1600 per month. I know that the sensible thing now is to start throwing extra money at my mortgage. I currently have 15 years 10 months to run, it would be nice to reduce that.

I live to a budget, I have done so for some time, I don’t see any need to change that or to suddenly start going mad once I am relatively cc debt free.

I do have a depleted savings account that I need to start building back, and I intend to put £500 per month to that, the rest is going to start me on my mortgage free journey!

I know it will be a long road, and I know that with all the best intentions in the world, there will be unexpected things that crop up and months where I cannot overpay, but every £ off the mortgage helps, right?

Kittenkirst

Definitely!
Looking forward to cheering you on as you go

Sounds like you have a very healthy chunk to save and overpay each month too

A_Frayed_Knot

Welcome :hello:

and a huge congratulations on beating the c/c's :T As KK says that is a very healthy chunk to save/overpay each month. Wow.

You don't say how much you still owe on your mortgage, so difficult to say how many years early you could be MF :j

Good Luck.

Happier_Me

With that sort of money available per month the road may not be as long as you think! Have you had a play with the mortgage calculators on this site? It's worth seeing how different overpayment amounts will affect your mortgage term!

Congratulations on clearing the cc'd. If you are paying a very small amount to your remaining cc it might be worth considering a full and final settlement offer to clear it for good!

bexster1975

Hello

I agree with previous comments. If you have £1100 a month to OP the balance will go down quickly. How much is outstanding? Plus you may not need to put £500 a month to savings forever. Depending on the purpose of your savings. If it's emergency SHTF money three to six months outgoings is considered plenty. As you suggest your outgoings are low, it may only take six months to save this amount. Then you could have £1600 to OP. alternatively you could then use the £500 savings to save towards things you want/would like.

Good luck whatever you decide. 14 years with CC debt to soon be free must feel fab.

Bexster

Ogden

Thank you all for your replies and support

The £500 to savings will be going across each month from April to September 2020 (eek!!) unfortunately, but it is what it is. I’m happy that I still should be able to overpay a chunk each month.

I have had a play around with the mortgage overpayment calculator, it’s a real opener isn’t it?! Apparently if I could overpay £1100 per month I would be mortgage free in a little over six years. Which sounds amazing BUT I know it just isn’t sustainable. But paying it off any earlier at all is a good thing, right?

In all reality there are probably going to be periods of time coming up when I’m not earning as much as I am now, there might be times when I struggle to even pay the regular payment on my mortgage and o may have to go back into my £500 per month being put away, but that’s just life isn’t it? Better to have tucked it away now and it’s there if I need it than to not have it tucked away and then need it!

I read a post from someone on here last night where they said they made an extra overpayment each month to round down each sub account of their mortgage to the nearest £10. I like that idea and I have five sub accounts that are charging interest so I think I will aim to do that with each sub account on the 1st of the month too. It’s a maximum extra £50 which i should be able to trim out of my budget somewhere if I put my mind to it!

bexster1975

I think you have a really sensible attitude to this. If you are more than normally concerned of the risk of not being able to pay your reguar pay,want us up worth considering offsetting some of your mortgage? Say half the £1100 to mortgage a month and the other half in a decent savings account ( an oximoron I know!) but means if things get tough you have a separate pot to pay basic mortgage payments from. Just a thought.

Bexster

AnotherJoe

Odds are very high that with that kind of money available you are a high rate taxpayer and attacking your pension woudl be far more financially rewarding.

Many people here focus on the mortgage because you can see it coming down, you should think of a pension like one of those steeple restoration fund thermometers outside churches, and yours should be rising at a rate that will ensure that when you retire its reached the top or if it gets to the top earlier than planned, you can retire earlier just as the vicar can repair the steeple earlier.

Meanwhile inflation whittles away your mortgage without any effort and paying it off early compounds your financial loss.

just sayin' ........

Ogden

My mortgage does give me the flexibility of making underpayments if I need to at any point as long as they don’t exceed the overpayments I’ve already made. So if push comes to shove ever I will do that.

But yes, I did think about an offset savings account at one point.

I decided against it in the end though because I know what I’m like -

If I come to the end of the month and I can’t afford to pay my minimum mortgage payment AND buy that [bag / new pair of shoes / other thing I don’t need] and there is a chunk of money sat in a savings account, I will end up “borrowing” from the savings account to buy stuff that I don’t need, haven’t budgeted for, shouldn’t have.

Whereas I wouldn’t consider underpaying my mortgage just so I can buy stuff I want....

bexster1975

Then fair enough. A smart move not to offset. Unless it is completely out of harms way discipline is needed.

I would say with regards pensions, there are always people on MFW talking about being MF not being as good as pension contributions. I see on the face of it that this is a no brainer. However, presently, I can't retire before 68. There is no way I will be able to retire before 70 by the time I get there. If I want to access a pension before then ( I mean, God forbid, my own money!) I will be heavily penalised. The reality is few people have very long healthy retirements (ONS data from last year proved this. If I recall, on average across the UK I might expect just under 5 years beyond 68 in anything approaching reasonable health). Paying off a mortgage means, however bad it gets I will always have a roof over my head. I accept this is a personal choice, but for people to regularly post about the relative stupidity of paying off a mortgage when nothing is known about pension arrangements of OP - on the MFW board - is frankly irksome. If posts were on the pensions board about clearing mortgage early, that would be different.

Bexster

A_Frayed_Knot

Well said Bexster :T