Started the road to mortgage overpayments with a but on the horizon 18 January 2021 at 1:28PM in Mortgage-free wannabe 6 replies 151 views

Trooper999

Hi all,
A bit late to the party, i'm afraid.
We have around 18 years left on our mortgage of 115k and started to plug some numbers into the overpayment calculator only to be knocked off of our feet.
We found that by really concentrating our efforts, we can reduce our 18 years to around 6-7 ish...wish we had started sooner!
There is a but though.
I have a car on PCP with a balloon payment due March 2022 of £11800.
I would really like to knock the stuffing out of our mortgage with £11800 but if I do that, I have to go onto PCP again which I don't really want to do.
I just wondered what you guys would do in that situation?
Thanks

FtbDreaming

Wow that must be a nice car! I don’t understand car finance at all having always just bought outright. Wouldn’t you be able to give it back and save  £3/4 grand for a normal car? You can always get a flash one in 7 years when the mortgage is paid. Good luck anyway.  

Trooper999

Yes, It is the nicest car I have had.
I have always had to go PCP as I couldn't afford to buy outright LOL.

[Deleted User]

Trooper999 said:

I would really like to knock the stuffing out of our mortgage with £11800 but if I do that, I have to go onto PCP again which I don't really want to do.

You don't have to go onto PCP again. You can just buy a car for a few grand and you're away.

Atno81

Return the car at the end of the contract, and buy a cheaper one? Best of both worlds. You can get a cheap run-around, then when you're mortgage free sooner, you can upgrade if you feel you need to.

When my PCP ended (several years ago, mind you), my balloon payment was less than the car was worth. I paid it, sold the car and used the money left over to go towards a banger (that lasted 5 years only before being written off by a drunk!). 

I guess it boils down to what do you want more? To own a flashy, value deprecating car, or fully own your home and have no mortgage payment for the rest of time!

dark^knight

I agree with the others. About 8 years ago, when we were starting to really tackle the mortgage, we bought a 5 year old car, for about 4.5k. We kept that going until we paid off the mortgage a few months ago. Now, we've been able to upgrade to a newer car.

FiveMoreYears

Good luck with your journey towards MFW, Trooper999.

It's an obvious point to make, but any car you own is always going to depreciate in value. Any home you own is almost always going to appreciate in value. Deal with the PCP to the best of your advantage and consider any costs it might incur, but I'd still keep the idea of mortgage over-payments at the front of your mind.

Good luck!