Mortgage free dreamer

Joe___2

Most of the bills paid now including the mortgage, which is now below the £77k mark at £76,921.44!

Left to pay is my c/c, cars and loan, should see me *slightly* in my overdraft but a big improvement on what it has been recently

^Joe.

jimjames

Joe___2 said:

Understand on the credit card, but as I'm paying £100 a month minimum to clear while maintaining the mortgage over payment the interest is only small (Less than £10 this month).
^Joe.

The size of the interest cost is irrelevant really, it's the percentage that really matters. Paying interest at 25% to save interest at 2% just makes no financial sense. Well it clearly makes sense to the bank as they want you to pay it to make them profits but from an MSE perspective clearing all debts at higher interest before paying down low interest debt is far more beneficial. That's probably £50 of interest that could have gone to the mortgage if you'd cleared the credit card rather than the overpayment.

Again going into overdraft in order to make overpayments on a mortgage makes no sense unless it's at 0%. Being mortgage free is a great aim but it's actually costing you far more to maintain high interest debt and paying off the mortgage.
This MSE article refers to savings but it's exactly the same with overpayments

https://www.moneysavingexpert.com/savings/pay-off-debts/

and point 2 on this one. Quote: A crucial rule of debt repayments is: clear the most expensive debts first. 
https://www.moneysavingexpert.com/mortgages/mortgages-vs-savings/

Joe___2

@jimjames I understand your point 100%, but the way I am looking at it is that I have 2, 3 months maximum of paying this off, using my over payment from the mortgage to pay this off now will save me what, £20 at most? At which point I have lost 2-3 months of over payment on my mortgage.

My point is that for the minimal cost of the interest on the c/c (£8.60 this month, approx £6.87 in December) and my overdraft (£1.20 last month) is missing the over payment on the mortgage to pay the c/c really worth it if I can support both for a small cost? I know, it's not money saving but to me it is not to much of a burden to pay both and live with a small amount of interest per month, also I would follow you advice to the tee if I was in say, tens of thousands of pounds worth of high interest credit card debt, rather than £400.

Given all of the above, I could also use our savings, but again, spending £400 to save myself £20 in interest, and then have to repay the savings? Doesn't make sense to me, again if I had a huge amount of high interest debt a very good point.

I've just made the payment and the balance is £407.30 (Balance in original post was underestimated as it included a refundable deposit for our new car, but I had the mats deducted from it £69 so received £181 back rather than £250).

December is my final council tax payment, so the January credit card repayment will be £227 rather than £100, followed by a lower payment in Feb to get rid of the card fully.

I know this will anger a lot of the hardcore money savers here, but my overall goal is to repay our mortgage early so we can help our two boys in later life, I am very fortunate to have a secure job, low debt and savings, and saving £20 to me makes no sense when repaying the mortgage early will literally save me over £10k in the long run.

So to cut a long post short, I have paid the credit card this month

Remaining Bills : Cars x 2, Loan.

** Please, please do not take this as a personal attack, I know that everyone here is trying to help each other and the above is just how I view things based on my own, personal situation. ** 

Payday on the 23rd this month, when I finish for Christmas, and also the bonus to look forward too.

^Joe

Joe___2

That's the festive period over for another year

Credit card payment made today (£100) leaves a balance of £313.22, the interest was £5.92 for the month, firmly on track now to have this fully paid by the end of February!

Mortgage has been paid leaving a balance of £76,649

^Joe

Joe___2

Not a bad start to the year, my yearly review has seen my basic salary has been increased to £28,700 a year now, although overtime is expected to be lower this year.

Another step closer to the credit card being gone! Payment made today for £227 (£100 usual payment + what I'd usually pay council tax) taking the balance down to £145.29, balance is slightly higher than it should as I did spend a little last month but I can say on the 25th February it'll be done and dusted! Interest on it for the month was £2.44.

Mortgage has also been paid taking the balance to £76,316.13.

From March the plan is to increase my overpayment by another £100 a month, taking the total monthly payment to £500, of which £206.90 is an overpayment, according the overpayment calculator I this will mean if I keep at it I will be mortgage free in 14 years so I've still got some work to do if I want to achieve my goal of reaching it in under 10 years.

^Joe

Joe___2

Seems like forever since I last updated and a lot has happened!

Credit card was finally paid off ahead of when I anticipated, so that is no more! £100 better off a month.

I also paid off the only loan we had outstanding, which was £113 a month and was due to end in Feb 2023 anyway.

Mortgage balance is £75,828.99 (as of 4th April)

I am now £213 a month better off! However... in the middle of February an advert for a house in the area we wanted to live in came onto Rightmove and we couldn't resist going for a look, we had our house valued and it was much worth more than we ever thought, it was on the market and it sold within days and we were able to put an offer in.

So my early mortgage free dream has come to an abrupt end although I am not to upset as the house we are buying has a huge drive for at least 4 cars, a huge garden and is only one council tax band higher - plus in terms of spending it isn't actually costing me any more than my outgoings 2 months ago.

The mortgage is set to be £601 - so the savings I have made on the credit card and loan, allow me to take this on without being any worse off, in fact it leaves us with £12 which offsets the council tax rise!

It is strange how quickly things can change, but I'm ready to take on the next chapter!

^Joe

Aimingforthegoodlife

Oh this is so exciting! It was clearly meant to be and the fact you worked so hard means it is all affordable! Everything crossed it all goes through smoothly!

Joe___2

May already! Madness...

Possibly just made my final payment on our current house, our mortgage is now £75,554.74 which is only £54.74 over what I had worked all my figures on when we decided to move and port this part of the mortgage over.

Overpayment of £106.10 cancelled for now and fingers crossed our next payment will be on our forever home!

Credit card balance is still at £0 and I expect to cancel it soon and get a 0% card as a 'just in case' safety net, just waiting until we have a date for moving.

^Joe

savingholmes

Exciting on the new house front - and it being affordable

Joe___2

June update... still in our house as our buyers left it until the contract was ready to go to apply for the mortgage! So we are now awaiting the valuation on our house for the lender, which is booked for the 7th June... I've been told it is returned to the lender within 48 hours so if we are lucky we might hear something by the end of the week, we are not happy, the chain are not happy, madness as to why they have left it so late!

Mortgage balance stands at £75,386.95 which is now below what I had based things on (£75.5k), not sure if that means we make up the difference by adding extra to the deposit or if it just gets added onto the 2nd part of the mortgage.

Fingers crossed that we move in June, moving before the bank holiday would have been a great time to get settled in and unpacked but I guess we had to hit a snag at some point :-)

^Joe