7 years remaining, lets do it in 5!

fatrab

Today is the day that I have put the wheels in motion for the mortgage portion of my 5 year plan.

I'm active over on the DFW section and have my plan laid out over there so wont bore you with the details. Essentially, I wanted to be completely debt free by the end of 2022, but this may spill over to October 2023 depending on which path I choose......

My current mortgage stats look like this:

Outstanding balance: £63,466.64
Repayment method: Repayment £800.29/month
Remaining term: 7 years 5 months
Interest rate: 3.14%
Product end date: 03/10/2018

This is the current end date for the 5 year fix that I took out in Sept 2013.

My friend's partner is a mortgage advisor and has today taken my details to see what's available to lock in for 6 months, given that rates are expected to rise in May.

So the most probable plan as I see it:
Come October I will have 7 years remaining on existing mortgage.
Re-mortgage <£60,000 over 7 years on another 5 year fixed rate.
Overpay the maximum allowed per annum
Save enough to clear the mortgage at the end of the 5 years

However, I do have one potential matter which may affect this plan. I have been told that in around 2 years time I will be receiving a lump sum from a property that my Mother will be selling. This could potentially bring my end date forward by 2 years, so I was pondering whether to go for a 5 year or a 3 year fix. I have always thought it's better to plan with what you have and not what you might have though.

I have some unsecured debts which I'm tackling just now, but I'll be in a position to make regular overpayments by mid-to-late next year.

I'll have a better idea of where things are heading by tomorrow, so for now I just wanted to establish a thread and say hi!

Cheers

AndyMc.....

What!!!8217;s the interest rate on your other debts?

fatrab

Car HP 6.9%
Loan 3.1%
C.Card 0%

Currently overpaying car but its currently for sale in favour of a cheaper alternative. Once the re-mortgage is arranged it should slot in just above the credit card in order of priority.

Credit card minimum payment is set so that it will be paid off by end of 0% period

beanielou

Happy shiny new diary.

sitesafe

Good luck will watch with interest. Similar plan and situation to yours - I've 7 years left and 3 yrs 3 months left of a 5 year fix. Plan to do the same - overpay the 10% each year and save for what will be the remaining balance where I'll then decide whether to pay it off

fatrab

Spoke with mortgage advisor today and we're in agreement that a 5 year fixed rate and 7 year term is the way forward.


I can still over-pay 10% and offset some of the interest in savings if/when I receive anything from my Mother. So my 5 year plan has taken a little set-back but it looks like I'm going to be mortgage free well before my 50th birthday, so I'm happy with that.

therocket_2

Happy new diary! Mortgage free before 50 sounds brilliant! I have a similar aim so wish you all the best!

Rocket

fatrab

Heard back from mortgage advisor, best deal as she sees it with a 6 month lock-in available is 2.09% with N/wide. It's a 5 year fixed rate on a 7 year mortgage and my payments will be £769.


I'm thinking with the uncertainty surrounding the imminent rate rises that it sounds like a good deal. Having checked other rates it looks competitive. There are cheaper mortgages out there but not with the 6 month lock-in available over a 5 year term. Santander won't discuss any retention deals until 4 months prior to end date.


Details are on their way to me as we speak so I'll need to get the forms sent back with the relevant paperwork asap in order to secure that rate.


Does anyone agree or disagree with the above? Any comments would be very welcomed, thanks

Moneyfordreams

Its all very personal to you and your needs, but if that's what gives you security and peace of mind its a winner,
I wanted a 5 year fix last time but couldn't face changing the application at the time. We've since sold so it doesn't matter... however when we are eventually in new place I will look again in 2019.. if that was the best 5 year deal I would go for it .

fatrab

Thanks, I think I'll take that rate. It's going to give me certainty going forwards to plan my debt freedom.

gallygirl

I think if you want a) the security of a five year fix and b) you want to reserve it now rather than wait a few months then that is probably a good deal. The only think that might dissuade me would be a large booking fee but I'm guessing all the alternatives would have one anyway. The alternative would be to look for an offset mortgage - you could then put any payment from your mum in there and be totally offset earlier.

If your rate is so low, once you have paid your car off, you would be better off opening a number of interest paying bank accounts, e.g. NWide have one paying 5% on 2.5k, FD have a £300 a month regular saver. Leave the money in NWide and count it as unofficially offset against your mortgage and pay the regular saver off the mortgage when it matures, then start another. When interest rates are so low you need to make all your little green soldiers work hard for you (that's an American phrase as their $1 bills are green but saying 'make those little yellow coins work for you' doesn't sound as good ).