When I grow up - The Return

Yorkielass

After over 3 1/2 years I've logged back into my MSE account :eek: after spending time over the last week reading some MFW diaries and I'm itching to get back to overpaying after an unexpected house move last year.

A summary of my previous diary/home ownership/mortgage history:

• We became (very lucky) home owners in late 2006 given our studying/temping circumstances then, wouldn't get a mortgage on those these days.
• In 2012 we sold that house, after 2 years of trying, and relocated back to the city we'd lived in previously and where we both work. We went for a 10 year fixed rate at 4.79% on a 30 year term
• In August 2013 we started overpaying, we managed to do well with our overpayments and by the end of 2015, we were basically at the overpaying 10% a year comfortably and that's why my diary fizzled out I think, we were managing to cover the amount we needed a month for the overpayments and reducing our mortgage term nicely.
• In August 2016, once we'd had the mortgage 4 years, we reviewed the ERC and what the current rates were and it made sense to remortgage, which we did, took ages to process but in December 2016 we had a new mortgage on 2.19% on a 5 year fix over X years on a balance of X. Our standard monthly payment went down from nearly £900 to £550 and we then rounded this up to £1500 so a near £1000 monthly overpayment and which we carried on with comfortably and should have almost paid it all off at the end of the 5 year fix.

So should have been a nice easy path to pay off the mortgage.

Then this time last year my routine nosying on R!ghtmove found a house very close to ours for sale, that would have been something we'd have looked for after another 5-10 years, it needed a lot of renovation and these houses don't come up very often. After a whirlwind couple of weeks we viewed it, got our house on sale, got an offer from the 3rd viewers and had an offer accepted on the other house. Sounds so simple like that but it definitely didn't feel like it at the time.

We moved in last October, about 12 weeks after first seeing it online, so quite an unexpected 2018.

We needed to up our mortgage back to £175000 which we did by:
Porting the mortgage we had at 2.19% - which ended up being £94,716.91 and the fix runs until December 2021.
Taking out an extra mortgage with the same provider at 2.29% - which ended up being £80,283.09 - this is a new 5 year fix so the fix finishes in October 2023.
Both finish in October 2036 so 18 years from the move.
Across the two mortgages we pay just under £1000 a month.

We played around with mortgage calculators to get a term that made our payments about £1000 which should be comfortably manageable and then we could look to overpay.

We were very lucky in that my parents had given my brother money towards his extension and gave us the same, that paid for all the moving related costs. We'd also built up a chunk of money to do a new kitchen and other work in our old house which we hadn't then decided what we were doing so we had a good starting point for the renovations - the mortgage man was really confused we didn't want to put that into the purchase of the house to lower the mortgage - told him if he'd seen the kitchen then he'd understand!

We haven't overpaid anything yet but we have been putting the £500 difference a month which would have gone on the mortgage if we hadn't moved into an account each month, some of that has gone to buy various things for the new house, new tools/bedding/hoover/gardening stuff/skips that sort of thing so the renovation money only gets spent on the big stuff, but obviously we aren't spending £500 a month on these things. So I'd like to start overpaying again - but because we've got the 2 mortgages at different rates I need to get a whizzy spreadsheet up and running to try and track and look at the different options.

We're both in our mid-late 30s at the moment and this is a forever home for us - if we keep paying the mortgage without overpayments we'd be mortgage free at 53 but would love to get that into the 40s.

So a bit of an update/rambling post but time to start getting on with those spreadsheets I think.

savingholmes

Good luck on your journey

woodfired

Sounds a bit like the situation we are in at the moment, house nearby up for sale, put ours up in the hope it will sell, house is the forever home and much sooner than we ever expected to find it! Really hoping ours sells soon!

Good luck with your journey, sounds like you have a good plan in place! WF.x

Yorkielass

woodfired wrote: »

Sounds a bit like the situation we are in at the moment, house nearby up for sale, put ours up in the hope it will sell, house is the forever home and much sooner than we ever expected to find it! Really hoping ours sells soon!

Good luck with your journey, sounds like you have a good plan in place! WF.x

Thanks Woodfired - we were so lucky, we took less for the old house than we would have like and consequently a bigger mortgage but with moving costing so much we decided if this meant we didn't have to move again for a long time it was worth that hit. Hope you find a buyer quickly for yours.

beanielou

Happy shiny new diary

Yorkielass

beanielou wrote: »

Happy shiny new diary

Thanks Beanielou - hoping it'll keep me focused while sorting out our plan.

Yorkielass

Current plan - our mortgage anniversary is in November and we can overpay 10% a year so £17500 which is out of our reach but good to know the limit (it doesn't reduce as the mortgage does as we've had previously).

I know we can comfortably overpay £500 a month and we'll start doing that again before the end of the year and once our current renovations are done we'll know what is left of the £500 we've been using as mentioned above so will have an overpayment to make for this first year at least.

Then we need to look at our finances more closely and see if we can increase the £500 a month at all. I'm very good at automatically putting money into monthly savers for the house renovations and car fund etc each month when we get paid but not so good at keeping an eye on how we're spending the rest of the money - there's always enough but I'm sure we could have more left over, or rather lose more at the start of the month into the mortgage.

For now, because I'm itching to do something, I'm joined the pay off 1% thread so that's £1750 and I'm going to see how much I can achieve before the mortgage anniversary in November.

Currently £18.57 from Qu!dco but it's a start.

I need to do some decluttering, keeping having to move stuff round the house for renovations has motivated another round of less stuff so going to see if I can add to the pot a bit with that too.

savingholmes

Good to start new challenges. Enjoy the decluttering.

BachSoon

Good luck for your challenge!

wishingthemortgaheaway

Sounds like an exciting journey.
Is the overpayment amount split in anyway across the two parts of the mortgage? Or can you allocate it however you choose? I've no idea which would be best (I'm assuming pay off the one with the higher interest rate first) but maybe it's 10% of each bit of the loan.

Mental mathematic gymnastics- have fun.
Wish.

Yorkielass

wishingthemortgaheaway wrote: »

Sounds like an exciting journey.
Is the overpayment amount split in anyway across the two parts of the mortgage? Or can you allocate it however you choose? I've no idea which would be best (I'm assuming pay off the one with the higher interest rate first) but maybe it's 10% of each bit of the loan.

Mental mathematic gymnastics- have fun.
Wish.

Thanks Wish - super busy time at work but coming out the other side now so hoping to get my head around things better again next week. Brain could just about cope with house renovations and work but not a lot else.

Each amount is 10% yes - so £9471 on one with the slightly lower interest rate but shorter fixed term and £8028 on one with the slightly higher interest rate but 2 years longer fixed term. So definitely needs a spreadsheet.