How to be mortgage free after 8 years

halloweenqueen_2

I just realise I'd known about overpayments, when we first took the mortgage out I read something about overpayments and we were activley discouraged - should of smelt a rat then, they told us we could only make a lump sum once a year and made it sound so convaluted we didn't push it, when we changed mortages to an offset they wanted us to put in as much as possible in the savings. I put as much as possible in but straight in the mortgage account, they get a bit antsy about this and have asked me every time if I realise I'm putting it in the mortgage bit and not the savings.

Thefunkygibbons

leeds_saddler wrote:

Hello.

I have a 10% capital repayment option with the Woolwich and have just enquired about paying off £6k in one lump sum.

However, we're planning to move in the not too distant future and so do all the above savings still apply if you do not tend to stay in the same house for move than a few years?

When we moved last time and upped the mortgage, the term was put back to 20 years and so i'm not sure if you save interest if you're not reducing the term of the deal.

Any help greatly appreciated.

This depends on how long is the not too distant future

It also depends on whether you need the money to do up the house or pay the moving expenses etc

However, if you pay it off the mortgage you will be saving money compared to the best savings rates and the cost to move shrinks

Don't worry about the trem not shrinking, you are still saving interest, because as the capital shrinks, the interest charge is also dropping

The best way of making overpayment varies based on the product, if you have a 10% limit, do you also have a best month to do it in? If not, I prefer to overpay every month by standing order rather than saving up to do it in a lump

Thefunkygibbons

halloweenqueen wrote:

I just realise I'd known about overpayments, when we first took the mortgage out I read something about overpayments and we were activley discouraged - should of smelt a rat then, they told us we could only make a lump sum once a year and made it sound so convaluted we didn't push it, when we changed mortages to an offset they wanted us to put in as much as possible in the savings. I put as much as possible in but straight in the mortgage account, they get a bit antsy about this and have asked me every time if I realise I'm putting it in the mortgage bit and not the savings.

It might be worth looking at your offset

Typically, you need £30k in saving to offset the higher interest rates on these products compared to other products

Also, do you need the flexibility that the offset gives, I know they sell it on the ability to get at the money quickly, whereas if you have a rainy day fund, do you need access to such sums. If not, then not worth paying the premium for the product

halloweenqueen_2

I have looked at other mortgages, they dropped the rate on mine to 5.35, when I considered swapping to the woolwich ten year one, i worked out the costs involved (and to be honest I want out of mortgages in the next ten years!) they were actually going to charge me more than someone who didn't already hold a mortgage with them for fees.
When i looked at the costs involved and what I'm managing to overpay I was better off staying where I am for the moment anyway. I do keep an eye on different products, thanks anyway funky. Theres changes ahead with MR HQ's work as well, so I want to see how that pans out as well.
Did you work out your mortgage free date with the online calculators?

aliwatts

Hi

I have just reviewed my mortgage with the Halifax and got a tracker rate of 5.19%, which I thought was good, £6 per month less so all better for me.

I just received the paperwork through though and it states that for every £1 borrowed I am actually paying £1.56 back, which I had never worked out, doh !

Bit gutted with that so gonna try to overpay wherever and whenever possible.

Ali

:mad:

halloweenqueen_2

It certainly brings it home to you how much they get back. i think we fall into the trap of thinking a mortgage is one of those things instead of realising its a whacking great loan.

aliwatts

Hi,

I think I may have asked this before, but is it even worthwhile just paying the odd £10 or £20 off?

Ali

MORPH3US

aliwatts wrote:

Hi,

I think I may have asked this before, but is it even worthwhile just paying the odd £10 or £20 off?

Ali

It all depends...

Will it be just a once in a lifetime £10 or will it be an "odd £10" 6 times a year?!?!

It also depends on what else you would do with the money if you didn't pay it off the mortgage.

If it really is a one off then probably not, but saying that, it might still save you £3 - £7 in interest depending on how long your mortgage has left.

If it is more often and its £10 off your mortgage rather than £10 down the pub then def pay the mortgage!

M

jobbingmusician

Yes it is, alwatts. You can use one of the overpayment calculators to work out how much an overpayment of even £10 a month would save you!

I think these mortgage pigs are a really good idea - good to throw lots of little bits at the mortgage. At the moment I am in the fortunate position of being able to overpay by £600 a month (only 4 years 7 months to go!) but I am still throwing lots of 'little bits' at the mortgage whenever I can

(Downside is that my job is not very secure, so I'm not sure how long this will last for :rolleyes:

aliwatts

jobbingmusician wrote:

Yes it is, alwatts. You can use one of the overpayment calculators to work out how much an overpayment of even £10 a month would save you!

I think these mortgage pigs are a really good idea - good to throw lots of little bits at the mortgage. At the moment I am in the fortunate position of being able to overpay by £600 a month (only 4 years 7 months to go!) but I am still throwing lots of 'little bits' at the mortgage whenever I can

(Downside is that my job is not very secure, so I'm not sure how long this will last for :rolleyes:

Thanks for that.:j

I would probably be paying it on a regular-ish basis, if that makes sense. When can I find the overpayment calculator?