Experience after 5-10 years of paying off

Skag

I just got myself into a 30-year mortgage.


I understand that provided that the interest rates remain low-ish,or around today's levels, the repayments will remain the same, if not go down (in case of overpaymennts).


I want to ask people's experience, after paying off a mortgage for 5-10 years, where inflation has eaten into the mortgage repayment. Do you feel that the money you pay now are less than it was 5-10 years ago?


In other words, does it get better over time?

Grogged

Generally it does.

Your income generally rises over time, so proportionately it feels like you pay less.

If rates drop them take advantage of "free" overpayments by keeping your payments the same.

It does take 2-3 years before you feel that it's better though.

A_Frayed_Knot

As Grogged says; generally.

With income rising and hopefully lower interest rates, and following all tips from thefriendly and lovely folk :smileyhea on these diaries of being as frugal as possible. It all helps.

You then feel you have even more ££'s to throw at the mortgage, take advantage if you have the 10% overpayment allowance (not always possible at the beginning of your mortgage).

Then when re-mortgaging, up payments and lower term - this way, you will feel you are getting somewhere - fast. :j

I knocked 11+ years off my 18 year mortgage.

Good Luck.

Skag

A_Frayed_Knot wrote: »

I knocked 11+ years off my 18 year mortgage.

Wow, well done! I'm looking to half it, even not more.

A_Frayed_Knot

Focus is key, don't take the foot off the pedal and keep reading the diaries.
Lots of money saving tips on here, and it doesn't matter how little you overpay,
pay it !!! the very thought that I would not be paying interest on that amount,
ever again, spurred me on to overpay more :Dthat was key for me,
round down to 00.00 every chance you get, once
you have done that, then make the last figure in your mortgage balance one digit
less or more (meaning less, of course :rotfl:) if you can.


Good Luck - you can do it :money:

Grogged

With our latest deal, we've found that if we overlay by £500 we can reduce the term of our mortgage (as well as the balance).

So for us it makes more sense not to over pay every month, but every £500 as that takes a month off the mortgage as well.

As has been said above there's lots of great advice here in lots of areas.

jackomdj

Grogged wrote: »

With our latest deal, we've found that if we overlay by £500 we can reduce the term of our mortgage (as well as the balance).

So for us it makes more sense not to over pay every month, but every £500 as that takes a month off the mortgage as well.

As has been said above there's lots of great advice here in lots of areas.

Confused why overpaying monthly does not reduce the term? It usually does, as you have less left to pay.

Grogged

The options with our current deal are that if you over pay by less than £500, it only reduces the balance.

If you over pay by £500 you get the option to either reduce the term or your monthly payment.

We've decided we want to reduce the term, so have taken that option.

Editing to add that the repayments are adjusted annually as well.

A_Frayed_Knot

jackomdj wrote: »

Confused why overpaying monthly does not reduce the term? It usually does, as you have less left to pay.

Me too :doh: confused. Maybe you mean, they don't reduce term straightaway, but who cares, you want to reduce the interest you pay asap. The reducing term will come when you re-mortgage, that's when you will have the option. (I hope).

Does your mortgage charge interest daily/monthly or even yearly? If daily, don't wait to o/p - if you are waiting till you have £500 - then do over however many months, 2 x 250? at least you won't be
charged interest on your first o/p.

edinburgher

Grogged wrote: »

Your income generally rises over time

When we moved to our current house 4 years ago (30 year mortgage) it felt like we'd never shift it! Wife was on mat leave (£10k less salary over a year), I'm a public sector worker who hadn't seen above a 1% rise for years and things seemed tight.

Fast forward a bit to 3 inflation matching salary increases each, a promotion each and the mortgage no longer stresses me out.

It took a while though, just be patient