2008 MFW newbies

newmoneysaver_2

Ah congratulations angel81uk!

Maximumtime

Hey all

Im totally new to MFM. It is my honest intention to pay off £4,000 off my mortgage this year and ive got my self a brand spanking piggy bank to start off today.

Now I have a query and was hoping to get some advice. My mortgage is a repayment one. I have been fixed for two years and that is due to expire in a few months. I think I will change when it comes time to a more preferable rate. The question being should I pay my saved cash off against my existing mortgage or save it and put it against the new deal?

Any info, suggestions or even experiences would be greatly appreciated.

belfastgirl23

Maximumtime wrote: »

Hey all

Im totally new to MFM. It is my honest intention to pay off £4,000 off my mortgage this year and ive got my self a brand spanking piggy bank to start off today.

Now I have a query and was hoping to get some advice. My mortgage is a repayment one. I have been fixed for two years and that is due to expire in a few months. I think I will change when it comes time to a more preferable rate. The question being should I pay my saved cash off against my existing mortgage or save it and put it against the new deal?

Any info, suggestions or even experiences would be greatly appreciated.

Just to say when I was making plans for this years finances I wanted a cut and dried answer on this too. In the end up I kind of went with what felt right for me which was to build up a small savings pot and then overpay mortgage alongside...

Squiggly_Diddly

Congratulations Angel81 as well - I think that's a pretty good reason not to overpay this month!!

Daft_Pegasus

Maximumtime wrote: »

Hey all

Im totally new to MFM. It is my honest intention to pay off £4,000 off my mortgage this year and ive got my self a brand spanking piggy bank to start off today.

Now I have a query and was hoping to get some advice. My mortgage is a repayment one. I have been fixed for two years and that is due to expire in a few months. I think I will change when it comes time to a more preferable rate. The question being should I pay my saved cash off against my existing mortgage or save it and put it against the new deal?

Any info, suggestions or even experiences would be greatly appreciated.

We were in a similar situation to you a few months ago. In the end we decided to get an offset mortgage so we still had access to our savings in case of a rainy day. However offset mortgages are not for everyone. Getting the correct balance between level of savings and level of mortgage is a difficult decision, personally I'd tend to overestimate the amount of savings we'd need (just in case) even though in the long run it means the mortgage costs more.

elantan

ok a wee quick question ...what's people's opinion (for this challenge) on having money for the mortgage as an offsetting idea? or are we just counting the money actually paid off the mortgage?....would the money in an offset account purely have to be intended for the mortgage or could it be for say something else (pension,savings etc) ..was thinking about this last night

Daft_Pegasus

Personally I'm counting the money put into my offset mortgage. Admittedly this money could subsequently be removed for other things, but I would then treat that as a negative amount in my figures. For example this month I've paid out a deposit for a holiday so currently my offset mortgage is higher than it was on 31st January. If this was still the case at the end of February then I would have to show it as a negative amount. Luckily however it's pay day before then and so over the month my offset will reduce.

The purpose of an offset mortgage is to give you access to your full savings if you need them. If you only count what has actually come off your mortgage then I suspect than anyone with an offset mortgage wouldn't/couldn't really take part in this challenge.

The point of the challenge IMO is to get people to focus on their overpayments and put effort into achiving them using whichever mortgage vehicle they've chosen.

elantan

sorry i think i may have not made myself clear daft pegasus...

i was meaning money in an isa for eg as offsetting
i already pay money every month into the mortgage account (nationwide) but i have the isa as well i am trying to save money just now so that i have a buffer incase some unexpected bill comes up ...just now i am not counting that as any money towards my mortgage as i need a buffer ...but was wondering if say in 6 months time when i had enough emergency savings but still paid some money into my isa could i class this as paying money off the mortgage(as i could effectively use it to pay some more off my mortgage if i chose to) or does it count as something different ...did i make any sense that time?

Dithering_Dad

I used to count my offset savings as part of my mortgage overpayment on the MFi3 quest, but then I had to dip into the offset to pay my income tax bill (no biggie - that's what the money was there for).

The overpayment figure I had on the MFi3 challenge suddenly decreased mightily and I decided that unless the money actually went physically onto the mortgage, it didn't really count. This means that my MFi3 figures are looking a little sickly these days but it gives me a truer reflection on what I really owe on my mortgage.

It's all really down to personal choice though.

By the way, good luck with your MFW quest guys!

Di-Dough

elantan wrote: »

sorry i think i may have not made myself clear daft pegasus...

i was meaning money in an isa for eg as offsetting
i already pay money every month into the mortgage account (nationwide) but i have the isa as well i am trying to save money just now so that i have a buffer incase some unexpected bill comes up ...just now i am not counting that as any money towards my mortgage as i need a buffer ...but was wondering if say in 6 months time when i had enough emergency savings but still paid some money into my isa could i class this as paying money off the mortgage(as i could effectively use it to pay some more off my mortgage if i chose to) or does it count as something different ...did i make any sense that time?

I think it makes sense. If it makes you feel comfortable to "offset" your savings against the mortgage then why not do it ... if you feel really brave when you have a little bit extra then maybe you could actually pay it off your mortgage:D I split what I get half for the mortgage and half for savings because I like to have a little cushion behind me.

Di