Advice required

zAndy1

Singlespeeder said:

Description....................Debt......Monthly...APR

Mortgage...................... 164000...(980)......7.14[b]
Is this right? 7.14%

if so I must have my calculations way out because by my reckoning 7.14% of 164k is  £11,709
and £980 x12 is £11,760 so you're not actually paying anything off the mortgage
I suspect my maths is wrong somehow.

That's right, it's an interest only mortgage

Makingabobor2

Think you need to know "exactly" what you have left, not roughly "around". You can't budget properly unless you know where every penny is going.  
Even £350 is a lot for 2 adults and dogs. There are only 2 of us and I can get away with £200 a month, and we eat meat, fish, fresh fruit & veg and DH takes packed lunches to work etc. We even have treats in that like toasted tea cakes and biscuits. I do however cook from scratch and batch cook.  How much is it costing you to feed the pets?  Surely not £200 a month? 

Singlespeeder

Yowsers. Can anything be done with that? I'm guessing it's recently remortgaged having such a high interest rate  

zAndy1

Makingabobor2 said:

Think you need to know "exactly" what you have left, not roughly "around". You can't budget properly unless you know where every penny is going.  
Even £350 is a lot for 2 adults and dogs. There are only 2 of us and I can get away with £200 a month, and we eat meat, fish, fresh fruit & veg and DH takes packed lunches to work etc. We even have treats in that like toasted tea cakes and biscuits. I do however cook from scratch and batch cook.  How much is it costing you to feed the pets?  Surely not £200 a month? 

I'd say probably £40pm , ok we aren't exactly that strict when it comes to food shopping I admit that, I'm saying £350pm as I know full well that's probably what we do and will spend although I am going to try and put a lower cap on that because yes it is a lot for 2 people really and there's no excuse really to be spending more than £300pm although I am including household essentials in that figure it's not just food

Makingabobor2

zAndy1 said:

Makingabobor2 said:

Think you need to know "exactly" what you have left, not roughly "around". You can't budget properly unless you know where every penny is going.  
Even £350 is a lot for 2 adults and dogs. There are only 2 of us and I can get away with £200 a month, and we eat meat, fish, fresh fruit & veg and DH takes packed lunches to work etc. We even have treats in that like toasted tea cakes and biscuits. I do however cook from scratch and batch cook.  How much is it costing you to feed the pets?  Surely not £200 a month? 

I'd say probably £40pm , ok we aren't exactly that strict when it comes to food shopping I admit that, I'm saying £350pm as I know full well that's probably what we do and will spend although I am going to try and put a lower cap on that because yes it is a lot for 2 people really and there's no excuse really to be spending more than £300pm although I am including household essentials in that figure it's not just food

Even £300 is a lot for 2 adults if you meal plan exactly what you will have each day and batch cook. Our £200 includes cleaning things etc as well, but we just cut out the non essentials now.  It all about just buying what you actually need each week or month, I find it easier to shop weekly. Don't be tempted by special offers unless you actually had it on your meal plan. I really think you could make big savings there. 

kimwp

Singlespeeder said:

Description....................Debt......Monthly...APR

Mortgage...................... 164000...(980)......7.14[b]
Is this right? 7.14%

if so I must have my calculations way out because by my reckoning 7.14% of 164k is  £11,709
and £980 x12 is £11,760 so you're not actually paying anything off the mortgage
I suspect my maths is wrong somehow.

Interest only mortgage.

zAndy1

Singlespeeder said:

Yowsers. Can anything be done with that? I'm guessing it's recently remortgaged having such a high interest rate  

Nope, had it for years but there's a margin of 3.44% or something added, when interest rates were low it was fine (well not fine but payments were still low) but obviously now interest rates have risen it's making the payments a lot higher. With todays .5% interest rate rise it will be going up again soon no doubt. I'm going to look into remortgaging , even a 4.5%-5% rate would be a lot better if we can get it  

kimwp

zAndy1 said:

Sea_Shell said:

Do you actually have £1000 spare at the end of each month??

Also £400 for groceries seems high for two adults (plus pet?).  Where do you shop?

Well no we don't actually have £1000 spare at the end of each month as we're paying probably double the minimum payments on the credit cards (paid £1150 this month) but yes I'd say we have around £400-£500 left at the end of each month. Let's not forget though, the vast majority of the credit card debt is currently at 0%, when that changes which will start happening in April assuming I can't get new 0% interest offers (and I aren't getting any at the moment) the c/c min payments will increase massively and at that point we'd have a net deficit not a surplus and be making hardly any dent in the credit card balances either 
Yeah shopping perhaps a bit high , maybe £350 more realistic , two pets and feeding them ain't cheap. Shop at Tesco , Lidl and Aldi mainly

Ok, so I think I would say (based off your SOA), you have (£30 - switch from cable to Freeview and Netflix or similar)+£100 - £300 from Lidl/Aldi is a lot of food +£100 from entertainment and clothes + £300 holiday fund+£1000 excess) - approximately £1500 after your essential outgoings that you can decide what to do with. It's slightly not this situation because you have an interest only mortgage and most people's SOA's have a repayment mortgage, so you need to figure out how much you need to "overpay" or put aside each month to pay off your mortgage by whatever your deadline is and add that to your SOA.

My previous advice still stands - use your TFLS when you are in the hole, not because you don't want to cut back on your lifestyle. I suggest that you consider it as a lump sum to pay off your mortgage if you end up with a hole there.

Martico

If I were you I'd consider the £4,000 interest-bearing credit card as an "easy" win. You could manage to pay that off completely by the time your other cards' deals run out, after which you might be offered a balance transfer deal. 
And you can combine that with some mortgage overpayments / savings fund, assuming you can stick with kimwp's assessment that you have around £1,500 per month to decide what to do with. 

jimi_man

Hi

I appreciate the difficulty you're in however it has only been a month or so since you first posted so progress is likely to be slow. 

Can I ask (I'm not too sure how CC payments work) does the minimum payment go up automatically when interest is applied after the 0% has finished? You seemed to suggest that it would and that you would no longer have a surplus but a deficit. I get that it's going to take longer for it to be paid off, however 0% loans are (in general) a thing of the past and you may have to accept that.

Looking at it very crudely, you owe £220k. Assuming you want it all paid off by the time that you retire (67) then with an average interest rate for everything of 7.5% (might be more, might be less), you're looking at monthly payments of around £2300 for the next 12 years. Any improvements on the interest rate will obviously be beneficial, equally the reverse is true.

Even if you took the lump sum from the pension now, that still leaves £188k which is still around £2000 a month payments for the next 12 years. 

Personally I'd still try and tackle as much of the debt that I could, focussing on clearing the ones that are going to higher interest rates sooner. You're not in a desperate situation so I don't think there is a need to resort to desperate measures like taking your lump sum. 

Another thing to bear in mind that your mortgage amount is at the moment, being inflated away and a few more years of this will start to have an effect. For example, in 10 years time, your joint income and your pension may well have risen substantially, such that the 25% lump sum will have far more of an effect on the mortgage amount (which will have remained at it's current level) than it does now.