£207,470.42 to go...! (now £395,000 to go!)

chelseablue

We've gone for the Hyundai i30, picking it up on Thursday

We could have got a brand new one, but would have cost more for just the entry level model.

I'm keeping my 13 year old Nissan Note, its only done 58,000 miles and I work 10 minutes from home so don't need anything fancy

TheOpportunist

Coming up on three months since my last post :eek:

The self assessment went smoothly for the Mrs, managed to claim expenses for some things we didn't realise we were eligible until we saw them on the gov.uk website :money:

The thing that is stressing me out right now is organising a remortgage three years into our five year fix. In October our ERC drops from 3% to 2% and will be just over £4k. I've been doing some maths and if I take out £4.5k from my ISA to pay the ERC and other costs in order to get myself onto a lower rate and reduce our term from 32 years to 27 years we should have a mortgage balance that is about £100 lower than it is projected to be in two years time, whilst costing us around £7.5k less in mortgage payments over two years.

That is a net saving of £3k :money:

The £3k could be used to overpay the mortgage further however it will be used to replace the boiler when the time comes and to attend to the fascia and guttering to the rear of the property that hasn't been fixed yet

Oh and did I say the Mrs is expecting? :beer:

So if the £3k doesn't immediately get eaten up by the above then we have an additional cushion.

This is all subject to house price reevaluation / affordability / etc

CarbonImage

Congratulations on all fronts, sounds like it's been an exciting few months!

Well done on your ERC calculations too, I like to feel that I'm fairly good at maths but I wouldn't have been able to work that one out without some prompting. Sounds like a really shrewd move.

How is the mortgage balance itself doing?

twinklie

Congratulations on the pregnancy.

I’m a 200k mortgage holder too. So will be following your thread with interest.

Mortgage_Minimiser

Congratulations! Welcome to the no sleep club - you'll love it

I'm in the same mortgage club so I shall also keep reading. I have a main mortgage of over £174k and extra borrowing of £72k, so a total of £246,700.

Single mum, but have decent earnings - still, it needs to go. I am 'trying' to get rid of the main mortgage before the 5 year fix runs out. I do OP the other one as well a little but I don't include that in and OPs I report.

Good luck! I shall keep reading and post when I can

MM
x

savingholmes

Congrats on the baby and the plan. Keep over-paying and see it as part of your freedom fund. Even if you don't want to do FIRE - if you pay the balance of 15% into a pension pot you could access earlier than normal retirement age it would help you with your early retirement plan.

TheOpportunist

Thank you for the well wishes Carbon, twinklie, MM and savingholmes

So for a run down on what I have been doing to find out whether remortgaging is worthwhile for us:

We overpay our £901 by £210 meaning we pay £1111 a month. I worked out our mortgage balance (roughly) when we have two years remaining (£204,000).

Using the MSE Mortgage Overpayment Calculator I banged in £204,000 over 32 years @ 3.65% with a recurring overpayment of £210. This said that in two years time our remaining balance would be £191,798.

Therefore we are paying £26,664 (£1111 x 24 months in 2 years) for the benefit of reducing our outstanding by £12,202 to a total of £191,798.

Initially I played with the MSE Overpayment Calculator and reduced our term from 32 years to 30 years as there were more mortgage options available to us, I also toyed with adding the £4,000 ERC to our mortgage making it £208,000. I then kept dropping the interest rate and fiddled with the overpayments so that the total monthly payment matched what we pay now.

It worked out that we would need a fee free mortgage of 2.6% to break even. The lowest at the time was 1.85% which would have saved us £3k on the mortgage so paying a fee for it would have been worth our while.

Because the rates have fallen further we are looking at other deals, and to not bore you too much its a fee free mortgage, the conveyancing should be provided by the new lender as we are staying put, no names are being added or removed. The rate was 1.74% for 2 and for 3 years via a broker so we will opt for the 3 years as that's a year before the baby would be starting school and we will have plenty of time to decided whether to up sticks or not.

Anyway... 1.74% over 26 years on a balance of £204,000 gives us a repayment of £813 and a mortgage balance after two years of £191,364 (£434 better than our current rate).
£813 x 24 months = £19,512 (£7,152 less than what we would be paying over two years)

The £7,152 saving over two years will repay the £4k ERC (to our ISA) leaving us with just over £3k to pay the mortgage broker (£350-550) and then have money left over to do some of the following:

- replace the boiler if it goes (we will save for it separately until it does)
- fix the guttering and fascia at the rear
- get some new flooring throughout the house (the current carpet is over 10 years old and well worn :eek:)
- help towards turning the en-suite back into a bedroom nursery

I hope that gets some of your cogs turning and assessing your own situations :beer:

savingholmes

So you lost me - have you re-mortgaged or are you planning to in future? Deals don't tend to stay around for long...

TheOpportunist

Hi SavingHolmes,

So we are in the process of remortgaging and all going well will complete on Thursday.

We didn't manage to get our application in until after our holiday so the rate went up from 1.74% to 1.79% still well within our profit margin so we will be quids in.

TheOpportunist

I have received an email confirming that the remortgage has been completed :j

Fingers crossed they have sent out paperwork to allow me to view the mortgage with out new provider online.

In other news, work has begun on turning the en-suite into a nursery. My father came around to gut the room as much as possible and to expose the old doorway. Unfortunately the stop valve providing water to the toilets cistern had unknowingly seize and dripped ever so slowly since he left which has leaked downstairs. I've since sorted it but it means some stainblocking will be needed downstairs.

Our plumber will be arriving early next month to remove all piping and relocate and replace the radiator.

Whilst I am at it, this is the 12th month of joint banking for the wife and I after becoming married and it has been great doing the sums in our spreadsheet for total and average spends for different categories :cheesy:

The spreadsheet has been improved with a more detailed income breakdown which I can prefill with SMP etc so we can see where any shortfalls may be. The Mrs has a variety of options on how she takes her maternity pay which includes having it spread out or having it paid out over a few months. For that reason there is a 'float' section which scoops up any surplus from the month which can be drawn from in later months.

The income being broken down will allow for me to see where the income has come from at the end of the year.