Overpaying Mortgage 13 May 2021 at 1:18AM in Debt-free wannabe challenges 6 replies 361 views

isadreamalie

Hello
In the Summer of 2017 I bought a house as a first time buyer valued at 350,000 in Chichester with a 120,000 deposit. I had a five year fixed rate mortgage 25 year term.  Initially my payments were set at 950 a month but I threw a further 10k at it. Since then it's become addictive and I now pay 670 a month. I have 145k debt roughly outstanding . I now chuck up to 1500 a month or so  overpayments and I wonder if it's getting a bit out of hand.  I'm 31 and hope to pay off within a few years. I'm not good at maths but I'm pretty sure I will be paying off around 15 years early
Obviously there's a max you can pay back each year. I live alone 
Anyone else with a similar challenge?

Aspiration

Not a similar challenge but just wanted to commend you on your commitment to clearing your mortgage. That’s a lot of money you’re paying consistently off of the mortgage so well done! 

PositiveBalance

[email protected],

So long as you aren't depriving yourself in other areas of your life (no social life whatsoever,  walking round with holes in your clothes etc.) there is no reason not to continue with what you are doing. If you maintain a flexible mindset can always change how you approach things again if your circumstances change.

As you live alone, if would feel comfortable doing so you could get a lodger(s) in any spare rooms and throw what they pay you at the mortgage as well. You can earn up to £7, 500 per year doing this tax free.

While there is certainly no harm in paying down your mortgage, you may wish to look into other types of investments with your disposable cash as you are young and the compound interest they will generate could also do you a world of good in the future.

P. S.  There is an entire forum of people overpaying their mortgages here: https://forums.moneysavingexpert.com/categories/mortgage-free-wannabe

Just some food for thought.

datlex

Well done on the over payments.  Make sure you have your safety net in place as well.  Emergency fund for starters. 

isadreamalie

PositiveBalance said:

[email protected],

So long as you aren't depriving yourself in other areas of your life (no social life whatsoever,  walking round with holes in your clothes etc.) there is no reason not to continue with what you are doing. If you maintain a flexible mindset can always change how you approach things again if your circumstances change.

As you live alone, if would feel comfortable doing so you could get a lodger(s) in any spare rooms and throw what they pay you at the mortgage as well. You can earn up to £7, 500 per year doing this tax free.

While there is certainly no harm in paying down your mortgage, you may wish to look into other types of investments with your disposable cash as you are young and the compound interest they will generate could also do you a world of good in the future.

P. S.  There is an entire forum of people overpaying their mortgages here: https://forums.moneysavingexpert.com/categories/mortgage-free-wannabe

Just some food for thought.

Thanks 
I don't use lodgers but I have an airbnb business

Is it 2-3.months pay that's recommended as an emergency fund?

isadreamalie

I should add I managed to save well with the Santander 123 account back when it was a keeper.  I kept it topped up with 20k (I'm not social!) And was earning 40 quid a month on interest 

PositiveBalance

Hi @isadreamalie,

I would quote your above question but I'm on my phone and find it hard to do that without quoting the whole block of text since the forum changed format,  grr!

The recommendations I have seen about emergency funds recommend 3 - 6 months of expenses in the bank.

You seem to be an intense saver, so I have little doubt that you will manage to save that amount promptly.

Good luck! 🍀