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Mortgage-free...where to start?
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Peppermint90
Posts: 101 Forumite

Hello all,
I recently purchased a mortgaged home, and cannot wait to be mortgage free already!
But, I don't know where to start...or whether making overpayments is the right financial decision for me at this present time....
I have a few buy-now-pay-later bills to pay off by next year- totals around £3k. Should I pay that off sooner and then start mortgage overpayments or is it wiser to start overpayments now and pay off the other stuff in smaller installments over the rest of the year?
Also, if i make overpayments, does it mean my i'll be paying less interest overall too?
Also, I'm with Halifax, how can I find out how much maximum i can overpay in a year? I can afford to make £200 overpayments each month...
Sorry for so many questions, but thank you in advance!
I recently purchased a mortgaged home, and cannot wait to be mortgage free already!
But, I don't know where to start...or whether making overpayments is the right financial decision for me at this present time....
I have a few buy-now-pay-later bills to pay off by next year- totals around £3k. Should I pay that off sooner and then start mortgage overpayments or is it wiser to start overpayments now and pay off the other stuff in smaller installments over the rest of the year?
Also, if i make overpayments, does it mean my i'll be paying less interest overall too?
Also, I'm with Halifax, how can I find out how much maximum i can overpay in a year? I can afford to make £200 overpayments each month...
Sorry for so many questions, but thank you in advance!
0
Comments
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My advice would be to make sure you can pay your Buy-Now-Pay-Later bills first before making any overpayments on your mortgage. Being mortgage free is just one aspect of financial freedom. Your should also make sure you have an emergency fund to cover the cost repairs that might need doing in the house, such as replacing the boiler.
You will have many years to make overpayments, so should not be in too much of a rush at the moment.
You can give Halifax a call to check what overpayments you can make.The comments I post are my personal opinion. While I try to check everything is correct before posting, I can and do make mistakes, so always try to check official information sources before relying on my posts.1 -
Peppermint90 said:Also, I'm with Halifax, how can I find out how much maximum i can overpay in a year? I can afford to make £200 overpayments each month...1
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Thank you for your advice guys!0
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Peppermint90 said:
Also, if i make overpayments, does it mean my i'll be paying less interest overall too?
If you put your figures into this calculator you'll be able to see how much interest you'll save. https://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator/MFW - Original balance 28/08/2014 £52850Original MF date: 2049:eek: Aiming for: 2025 Current MFD: 2030
Balance 27/07/2016 £49990
Balance 08/07/2017 £47999
Balance 30/07/2018 £44500
Balance 01/08/2019 £40700
Balance 03/09/2020 £37619
Balance 30/09/2021 £33983
Balance 18/01/2023 £28940
Balance 06/10/2024 £22168
1 -
Generally at low interest rates there is something to be said for building up savings (eg an EF as mentioned) and investments - eg Stocks and Shares ISA or pensions. Eg if the £200 was invested in your pension, you would get the tax rebated, and may get additional employer contribution. In any case over the 25 years or so your mortgage is currently set up for many many many times more often than not, you would end up with more net wealth than if you overpaid your mortgage.
I am aware that there is nothing quite like owning your own home but it is not the only aspect. A common approach is to do both - half and half : Half goes to OP and reducing term and interest, half goes to investments to help build your wealth in the long term. This view will be the minority view on this forum, but some people are going the other way and reducing repayments to be able to afford more investments. The important thing is to do what you feel comfortable with, and not spend it on triviaI think I saw you in an ice cream parlour
Drinking milk shakes, cold and long
Smiling and waving and looking so fine1
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