Is there much point?

anotheruser
anotheruser Posts: 3,485
First Anniversary Name Dropper First Post I've been Money Tipped!
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edited 2 January 2022 at 7:50PM in Mortgage-free wannabe
We have a 25 year mortgage, already taken off a fair amount - we've paid about £600 a month (well, it's currently £565).
We've remortgaged twice, the amount paid was £625 a month, then down to £598 over the remortgaging.

We don't have a huge amount of disposable income.
I could potentially save around £300 a month but that means we don't really save anything.
We have a child in nursery, which is best part of £1000 a month.
We're already going to have a good look where our money is going to make sure we're not over spending on anything.
In the next couple of years, we're likely to need around £10,000 for IVF treatment too.

House was bought for £140,000
Mortgage Loan: £133,000
House is now worth: £198,000 (possibly slightly more now)
Mortgage left: £116,000 (ish)
I don't know what that leaves my LTV at.

I have always accepted that this loan will take the full 25 years to pay off and am fairly content that at the end of that term, we will have no mortgage left to pay.

Apart from being "free" earlier, is there much point (in our circumstances) in paying a slightly higher payment to reduce the amount of time we have to pay the mortgage?
What I don't want to do is struggle to live in the now (IE, not saving anything) and scrape perhaps just 5 years off the mortgage.  I understand that would reduce the amount of interest we pay but it's still not a prospect I think kindly on.

HOWEVER - I read somewhere else that even a small overpayment every month could reduce the mortgage and interest by quite a lot.  The figure was £20 overpayment = 6 months off (although there was no details on whether that was £20 a month forever or £20 a month for the initial 2-year fix or whatever).  Those sorts of overpayments we can do.

Or should I just ask the mortgage lender to up our monthly payment to reduce it quicker?  Not sure whether overpaying or upping the monthly payment is better?

Any advice?

Comments

  • MrsLovely
    MrsLovely Posts: 104
    First Anniversary First Post Mortgage-free Glee! Name Dropper
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    Hi, I remember paying huge childcare fees. I would wait until your child goes to school. It's not nice being so strapped for cash. 
    Dec 2010=£160k.
    Mortgage free date 9th Apr 22 😎
    E fund - £10,005/£20,000
  • I don't think anybody here can answer your question . You can play around with the mortgage overpayment calculator to see exactly how much you will save by overpaying . But whether it is 'worth it' is a personal decision
  • happymum37
    happymum37 Posts: 315
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    There is a brilliant mortgage over payment on here.  If I were you I would increase your monthly repayment by the nominal amount you can afford- even if its 20 a month.  Then save everything else  . Once you have paid for IVF and remaining you have can be paid off as a lump sum the next time you remortgage.

    Best of luck
    Part time worker.
     Plug that SAHM pension gap & Retire in style in 20 years. 
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