Time to hit the Mortgage!

Novice_investor101

I’ve been following this board for a while. About 5 years ago I really got into looking at my finances. I was 34, single & 3 years into owning my first home. 

My focus until now has been on building my investments & pensions for the future. I have been overpaying my mortgage but never focused on getting it down quickly. 

Today, I start that journey! The investments are still in place, with regular DD’s going into them but now I want to focus on making my home 100% my own. I’m single & expecting to stay that way into retirement. Any spare cash I have now will be thrown at the only debt I have. 

The figures:
 - mortgage taken out in 2013 for £76,200. 

 - current balance £53,639. 
 - currently ahead on payments by £3,731. 

 - current 5yr fix ends in 1yr, 10mths. 

 - current interest rate 2.37%. 

 - mortgage end date June 2038, aged 57!

My short term goal is to get the balance to less than £50k by the time my current fix ends in 1yr, 10months - July 2023.

My long term goal is to get rid of the mortgage by the time I’m 50 - June 2031! 

Thing’s I’ve learned so far? Taking a 5yr fix was a mistake. I feel I’ve been stuck on a higher interest rate than I needed to be. Next renewal I’ll be taking the lower rates even if they are only two year fixes.
Keeping a static payment is a good way to overpay. I was paying £400pm against a mortgage of £320pm until last September (bought a new to me car). 

This time I’ve increased this to £350 static payment & I’ll be paying lump sums online each month. My first test payment of £20 has been sent today & £400 is waiting to follow once I see the £20 safely show up in my online account. 

I’ll keep updating the progress each month, I’m excited to see that number come down! 

South_coast

Good luck! You sound like you have a good plan in place. I was wrong to go for a 5-year fix as well, 2.58% in 2018 - it made me wince when I saw what others on here were paying 😮! However, on the other hand, it made me more determined not to mess about with paying stupid interest and another set of arrangement fees and just get on and pay the flipping thing off instead 🤣!

Looking forward to hearing how your plans progress 😀

Novice_investor101

First steps taken!
yesterday’s £20 arrived safely & another £300 has been sent. I’m holding back £100 as I’m on holiday at the end of the month & I might want to spend it. If I don’t, I’ll send that too. 

I’m loving being able to send money straight to my mortgage via mobile banking. So easy! 

Thriftmaster1973

Hi, I think many of us (myself included) have the mistake of taking a 5 year fix when the rates look "good at the time".

The main thing is that you've noticed your error & won't easily jump quickly in future.

You are overpaying so therefore you are actually saving on interest as well as taking time off the term & at the end of the day 2.37% isn't atronomical.

I'm currently on 1.74%, in 2020 that seemed great but surprisingly there are lower deals out there now.

Good luck on your journey.

Novice_investor101

It’s reassuring to know it’s not just me that committed to what now feels like a too long commitment! 

With my normal payment of £320 yesterday plus the additional £320 i sent, mortgage balance is now about £53,010. I’m going to check it each day this week to see how much the daily interest amounts to

Thriftmaster1973

Give it a few months & you'll see the balance dropping in the right direction.
It does seem to me that mine is taking forever but when you look back into the history of overpaying you'll see that the light at the end of the tunnel is getting closer, much sooner.

Novice_investor101

Daily interest seems to be just over £3. So 1/3 of my normal mortgage payment covers the interest each month. I’m going to aim to overpay by £100 a month or more now

FatJock

Good Luck with your journey. You'll soon see that daily interest rate decline as the balance reduces. All the best.

LadyGnome

Welcome and best of luck.  You may be able to get out of your fix a few months early depending on who you have your mortgage with.  I am with Nwide and they let you refix 3 months early.

rjbear

Hope this is still going well

Novice_investor101

I’m now waiting for the last of the direct debits to go out so i can pay what’s left in that account into the mortgage too. 

I go on holiday to Scotland in two weeks, but I’ve got the cash for that set aside already. 

Now I’m sat about waiting for the Tesco delivery to turn up between 9-10pm. Think I’ll be changing to Aldi, & save some more pennies.