MFW's - a dying breed?

borntobefree

972 on the "grabbit" board - 12 on the MFW board.:p Maybe that's what the op means.:rotfl:

ailuro2

There will always be those who think they have to buy something they can pick up to grab a bargain - some people here are getting their mortgages for about £50,000 less than other people are paying for them. Anyone seen any posts on grabbit recently where something has £50,000 off the original price?:p

I do like a grabbit though, if it's something I'm after

michaels

Dithering_Dad wrote: »

I think that the difference between MFW and the other boards is that a lot of MFW posts are concentrated into two threads - MFi3 and Newbie MFW. We occasionally get visitors from the Savings & Investment boards who come in and start (yet another) discussion on how we're daft paying off our mortgages when we could be investing it and getting a 20% return! Saying that, since the stockmarkets have been on their knees recently, they don't seem to visit that often...

The other reason we're quiet in here is because once you've started down the MFW path (get cheaper insurance & utility bills, acquired a mortgage pig, dumped the crappy investments and/or endowment, etc) there is nothing much else to do apart from keeping overpaying the mortgage each month and happily watch the balance decrease.

I'll say it then, I just remortgaged and am paying 50 basis points below the BOE base rate and increased the size of the mortgage as my wife can put the money in a savings account that pays 75-100 basis points over base and as she is not working it is tax free. Why on earth would I want to pay off the mortgage?

Dithering_Dad

michaels wrote: »

I'll say it then, I just remortgaged and am paying 50 basis points below the BOE base rate and increased the size of the mortgage as my wife can put the money in a savings account that pays 75-100 basis points over base and as she is not working it is tax free. Why on earth would I want to pay off the mortgage?

I had to check on google to see what a 'basis point' is. To interpret, you currently have a mortgage on 4.5% and savings at 5.75 to 6%. This means that if you have £10,000.00 savings you stand to gain between £100 and £150 per year in additional interest. A tidy sum, but out of interest, how much was your mortgage arragement fee, is your mortgage a tracker and how long have you arranged the deal for?

I had a look at fool.co.uk and the best tracker they had was way above your rate and had a £1000 arrangement fee. If you add that arrangement fee into the calculations, then it'd take you upto 10 years of the extra interest on your savings to cover the arrangement fee. Unfortunately, these discounted deals tend to only last 2 or 3 years, so you'll have to pay another arrangement fee and so the gain on your savings will never offset the fees. Also I'm assuming there is an early repayment charge on your mortgage, so if you decided to sell up then you'd also lose out financially (typically 4% of the mortgage, so £4000 on a £100k mortgage).

It's surprising that whenever people compare Savings v Mortgages, they always just do a direct comparison of %age rates and never factor in the costs of getting the next mortgage deal and the costs of getting out of that deal if you need to (and the associated hassles therein).According to the google search I did, many financial sites are focussing on the fact that Mortgage Arrangement Fees have doubled in cost over the last year (Example here).

Higher arrangement fees coupled with punative early repayment charges? No thanks. I remain to be convinced that I'd better off with a mortgage than without one .

catshark88

ailuro2 wrote: »

There will always be those who think they have to buy something they can pick up to grab a bargain - some people here are getting their mortgages for about £50,000 less than other people are paying for them. Anyone seen any posts on grabbit recently where something has £50,000 off the original price?:p

What a great way of looking at it! :T

setmefree2

Hi

Thinking about the next year of the MFi3 challenge has made me ponder about the "intangible" side of wanting to be mortgage free.There is something about paying back debt that is different from saving. I know there are lots of different reasons why people want to be mortgage free eg to retire early, to holiday more, etc, etc. But for me, on a day-to-day basis, it's that when I actually go to buy something I no longer think of it as costing me the price but I factor in interest too. So when I think about buying a magazine, I no longer think of it as costing me say £3 - I actually think of it as costing twice (or even 3 times) that and I find I no longer want it;). I think it's this side of being a MFW that I like - it gives you a different "mind-set".:D

r.mac_2

Hi there

I can't speak for others,but the 'credit crunch' is something which is making us more keen to pay off chuncks of our mortgage before we have to remortgage at the end of our current deal.

I would even go so far as to say that it is the thing that's making my DH begin his lightbulb moment and make it more 'acceptable' to reign in his spending and put the money towards the mortgage overpayments.

Broken_hearted

I don't post on here much but the credit crunch has made me more determined to be free of all debt including the mortgage. I've already cut it by 5 years.

Jonbvn

Dithering_Dad wrote: »

It's surprising that whenever people compare Savings v Mortgages, they always just do a direct comparison of %age rates and never factor in the costs of getting the next mortgage deal and the costs of getting out of that deal if you need to (and the associated hassles therein).According to the google search I did, many financial sites are focussing on the fact that Mortgage Arrangement Fees have doubled in cost over the last year

We are siwtching to a lifetime tracker mortgage (with minimal fees), since it is clear that if you remortgage on a regular basis the fees are more than significant. Our new mortgage rate is slightly less than the best paying ISA rate. Given the marginal difference between the two we will fill up our ISA's then pay-off the mortgage (I realise we are fortunate to be able to do both).

phizzimum

ailuro2 wrote: »

Well everyone I know WANTS to be mortgage free - but no-one I know actually MAKES the overpayments happen except for us on here!!

good point!