Kill the mortgage before 73!!

helejenkins1

Hello to everyone and thanks for popping in.

A bit of background. Myself and DH are due to complete on our next home in the next few weeks.
We are porting our current mortgage and borrowing an additional £23,000 making a total mortgage of £183,250. To borrow this extra money we had to agree to a term of 37 years!!! I will be 73 when the mortgage comes to an end.
We are moving to cut costs and are clearing a personal loan and my car finance from the equity in our home. Travel costs for us both to work will be cut significantly as well as our council tax being £80 a month less than we pay now. We have worked out we will be around £700 a month better off than we are currently.
We are planning on using around £300 of this to overpay the mortgage, using the calculator I have worked out we can reduce that term to 21 years.

We will do this and I’m going to use this diary to keep me motivated and not just see the extra money as an excuse to spend uncontrollably.

A_Frayed_Knot

Hello and Welcome,

the extra you will have will sure reduce the mortgage, and once you get into the swing of it, the addiction will follow.


Good Luck.

beanielou

Happy shiny new diary
It does indeed become addictive.

edinburgher

73?!!! You have good reason to be motivated :eek:

helejenkins1

edinburgher wrote: »

73?!!! You have good reason to be motivated :eek:

Don’t I know it.
Mortgage offer came through today so it’s beckmjng more of a reality now. Just want to move so I can start these overpayments

julicorn

Happe new diary! And that's a crazy long time, no wonder you're motivated to pay it off sooner.

edinburgher

helejenkins1 wrote: »

Don’t I know it.
Mortgage offer came through today so it’s beckmjng more of a reality now. Just want to move so I can start these overpayments

I know how you feel, unless I actually make some OPs we're looking at 62+ It's not the duration itself that worries me, more my ability to service the debt over a 30 year period where anything could happen. How about you - general fear of having a debt for decades, or more specifically concerned that you probably won't be able to/won't want to work that long?

helejenkins1

edinburgher wrote: »

I know how you feel, unless I actually make some OPs we're looking at 62+ It's not the duration itself that worries me, more my ability to service the debt over a 30 year period where anything could happen. How about you - general fear of having a debt for decades, or more specifically concerned that you probably won't be able to/won't want to work that long?

I certainly don’t want to work that long. Ideally I am hoping not to work past 60 but that just seems like a dream at the moment. The type of job I do is quite physical and certainly not one I’ll be able to do at 63 never mind 73.

I am going to do an SOA tomorrow based on what my new situation will look like. Playing with the overpayment calculator, my ideal situation would be to have a spare £500 a month to put towards overpayments. I’m thinking that’s going to be unrealistic though. If I could then the mortgage would be cut down to just 16 years putting me and 53 and then having a few years to save for retirement.

One thing I know is that I’m determined though.

Mortgage offer came through today and hoping for a completion date in November so it’s getting closer.

Youthgonewild

Happy new diary Helen.

37 years! Wowsers!! :eek:

helejenkins1

Nothing to report yet but don’t want to forget this diary before it’s even started. We are still waiting for a completion date but we are hopeful that this will be within the next 4 weeks. Just want it to hurry up and come so I can start paying this mortgage off.
After years of debt, I’m just looking forward to having a comfortable future.

pjcox2005

Hi, I appreciate it's quite emotive to have debt and therefore want to pay the mortgage off early to feel you own your home, but you really should make sure that your pension contributions are right before you make any overpayments.


If your interest rate is below is inflation then the mortgage debt will naturally be eroded, and by making an overpayment instead of a pension contribution then you'll be missing out on significant tax relief and potentially match contributions from your employer.


Pension rules allow you to take your pensions as a full or partial cash sum when you can retire so you can use that to clear any remaining payments and that money drawn out of your pension could potentially be tax free.


Likely to be the most efficient way of being in a better position at retirement with a mortgage paid off.