First time Buyers - When to start overpaying?

MrJamez
MrJamez Posts: 56
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edited 14 June 2020 at 12:34PM in Mortgage-free wannabe
Hello all,

Myself and the girlfriend (both 24 years old) have just purchased a property as first time buyers and one of the things we have both agreed is that we want to overpay on our 25 year mortgage.

On the assumption no extra fees are involved.. Do you think we are wise doing this straight away when we move in? Or should we settle in first and then go from there? We have a 2 year fixed mortgage and our mortgage is 23% of our total income so we will have a bit of disposable income between ourselves.

Thanks in advance.

Comments

  • Competsoph
    Competsoph Posts: 282
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    Following as similar position! 
    Officially a homeowner 🥳🥳
    September Grocery Challenge: £146.60/£200
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  • Trina90
    Trina90 Posts: 541
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    We were the same age as you 5 years ago when we moved into our first home, with a 30 year mortgage, and started overpaying in the first year. We didn't overpay regularly. We saved the money until we had reached the maximum 10% and then did a large overpayment in one go - so in the mean time we had the money to use for anything else in case something cropped up. 
    Mortgage started 2015: £150,000 2016: £130,000 2017: £116,000 2018: £105,000 2019: £88,000 2020: £69,000 2021: £51,195 2023: MORTGAGE FREE!
  • julicorn
    julicorn Posts: 2,272
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    We started overpaying a few months after we moved in (pretty much as soon as we properly realised that was even an option). What is it that's making you want to wait? If you've got a decent emergency fund and are on top of other financial goals (including pensions, specific home improvements, investments - whatever applies to you), then I see no particular reason to wait. 
    Original mortgage: December 2017, £203,495
    MFW start: April 2018, £201,800
    Mortgage neutral: September 2022, mortgage redeemed: December 2022
    New house, new mortgage: December 2022, £276,007
    Current balance: £217,800 minus £8,300 overpayment savings pot
  • Personally, when we first moved into our place we didn't overpay for the first year or so. Mostly so we had money for furnishings/decorating/flooring/garden furniture/anything else that crops up, but also so we got a handle on what the bills would be like and to save an emergency fund as the purchase pretty much wiped it out. 
    Mortgage £126746 DEC14 £122423.53 DEC15 £115041.70 DEC16 Remortgaged Sep17 to pay off HtB loan £150000 - £140500 JUL19 Moved house Oct19 £230000 £230400 DEC20
  • ruby_eskimo
    ruby_eskimo Posts: 4,526
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    Personally, when we first moved into our place we didn't overpay for the first year or so. Mostly so we had money for furnishings/decorating/flooring/garden furniture/anything else that crops up, but also so we got a handle on what the bills would be like and to save an emergency fund as the purchase pretty much wiped it out. 
    We did a similar thing - we've been here 3 years and spent that time saving up to make improvements to the house, furnish and decorate it.  Now we've done all that we wanted bar the odd thing here and there, we're now starting to make over payments of at least £100 a month.  Each time you make a payment you're reducing the interest a tiny bit so I would make regular payments rather than saving and then making a larger payment.  We're on a 5 year fix with a 35 year term and a ridiculous interest rate so I'm waiting until we remortgage in 2 years to see the biggest change and then focus a bit more on over paying.
    Emergency Fund - £7992.62 / £10,000 :: Total Mortgage OP - £34,692
    LISA 24/25 - £0 / £4000 :: NSD 2024 - 13 / 180 :: Moving Fund: £838.83 :: Decluttering - 143 / 365
    Engaged 9th December 2010 :: Married 29th October 2015 :: Bought a House 13th January 2017
  • joedenise
    joedenise Posts: 16,367
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    If you can afford it and there isn't a problem with overpayments then start immediately.  Every overpayment makes a difference!

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