How to be mortgage free after 8 years

Miss_Penny_Pincher_2

Thanks - logged onto the internet banking for first time today - received mortgage statement a week ago saying I owed £93,024 and online it already showed that because of daily interest this has already gone up to £93,124!! Will give me extra motivation to overpay, methinks!

aliwatts

esthomizzy wrote:

Ring them up and demand the figure every month. My mortgage company have got used to talking to me on the phone now Also even if your interest is calculated daily sometimes they only apply it once a month so if that's the case for you find out when that date is and ring just after the interest has gone on (otherwise you might be out by this months interest depending on when you ring).

Thanks for that will ring them on Monday, see if I can find out when the monthly day is and then go on from there. Thanks again.

Jewels

Thanks for interesting thread "Funky gibbons" its taken a while to read through ,but very interesting. However I am not sure whether I may have missed something so would like to offer our experience if it can help anyone.

We are older 'money savers' but have still had similar things to FGs but had to cope in a different way, although from the first I have always believed never to be in debt, to anything except a mortgage, so we always saved up to buy things first.
When we bought our house 10+ years ago we took on the usual endowment and 'interest only' mortgage - the latter with RBS, a fixed rate which after a couple of years we realised was very high.
At this point we met the (now we look back) most helpful financial adviser ever.( Obviously before Martins time). Following his advice we paid the 'fine' to get out of the fixed rate and moved our mortgage to a currentaccount mortgage (this has changed its company name several times, and now is with Mortgage Trust)
It has been brilliant for us -because we started when I was not earning a salary (ie working full time at home with 3 small children)
However I was starting to get occasional work,and this money , as our 'rainy day' money, always sat unused (previously in a rediculously low-interest current account- which we also closed,) because we were really careful, so this bit of savings built up in our new currentaccount and was offset daily against our mortgage.
As the children have grown up, I have worked more, but we still have tried to live on one salary, because thats what we were used to, so we have virtually paid our mortgage off, and according to our last statement, if we continue, we will have paid the mortgage 7yrs 8mths early (from 15 year term)
And still will have the money to come from the endowment!!
We can still use any amount of the original mortgage so when we've needed extra for a holiday, in 'New' second hand caravan, or other large bills there is plenty available.
I know lots or readers are in a far worse position than us, but it may help someone who could save that little bit, like the overpayment, but this way I think is easier because it happens automatically all the time, so you dont have to bother with overpayments because everything is already in the account anyway, and you dont need to worry about offsetting (I think thats the right word) because, again the money is all in one place.

* re mortgage statements
we get a statement every month, but could have one a week, but found this too much, also can see account on line whenever.

cupid_s

jonnydoe wrote:

For anyone who has a big mortgage (cos bad timing) and earns less than 20k yr:

Cut out all luxuries in life, live on the basics (water and bread and a few other essentials), never go out, get depressed from mal nutrition, get divorced and commit suicide. At least you'll have paid my mortgage off..

Hubby and I took out a 70000 mortgage two years ago (not that big i know). We used this to buy our first house at £100000. We had some savings from what we hadn't spent out of our loans at uni and we lived with my parents for 18 months to save the rest of our deposit. In that time we saved over £17000, paid to get married, had a luxury holiday (costing £6000 - eek) and an amazing honeymoon. At that time i was a student and I still am (6 years and counting - i must be mad). My husband was working (earning 14000 a year), but shortly afterwards left his job and also became a full time student. Now we have a combined student income of £22000, and as part of our courses we aren't allowed to take on any part time work.
We have at least one holiday each year as I see this as very important. This year we went for 2 weeks to thailand and are off in a couple of weeks for a 5 day break in amsterdam.
We spend whatever we want on food shopping, but generally do try to be careful. But if we want venison for tea occasionally, we'll buy it. But we almost never have take-away (maybe twice a year!) We go out for a nice meal at least once a month, and i wouldn't say i really go without anything.
Yet we manage to save £500 every month into a regular savings account without any bother at all, so that we will have a lump sum of 12000 to pay off our mortgage when the rate becomes unfixed in 14 months time. Additionally i will not buy anything unless i can afford to buy it outright. Apart from student debt and a mortgage i will not borrow money for anything.

You don't have to go without all luxuries to pay extra off your mortgage, and you don't have to earn loads - we don't. We just prioritise what we spend. We have friends who spend in a month as much as we save just on take-aways and cds/dvds. We don't have sky tv, a home phone, or a car - all of which we see as luxuries, unlike most people do.

And when we get 'proper jobs' most of what we get over the 22k we're currently on will go towards the mortgage as well. By my current reckoning we should have paid off my 25 year mortgage in less than 7 years. Then we'll go through it all again with another house - can't wait lol

halloweenqueen_2

Well I'm still 'happily' overpaying and have gone down into the seventies which has given me a boost!

comping_cat

Well done hq, i bet you feel great now its below 80K!!!!

Thefunkygibbons

halloweenqueen wrote:

Well I'm still 'happily' overpaying and have gone down into the seventies which has given me a boost!

Excellent

You are now into the positive circle wherein, the interest savings are providing even more money to throw at the capital

halloweenqueen_2

Thanks catowen and funky gibbons! Funnily enough heading towards the 60K now makes me feel more positive, I know I won't get there this year but I'm going to get as near as I can!! I want to pay off in five years and go travelling!

InMyDreams

cupid_stunt wrote:

My husband was working (earning 14000 a year), but shortly afterwards left his job and also became a full time student. Now we have a combined student income of £22000, and as part of our courses we aren't allowed to take on any part time work.

But as a student income, isn't that tax free? Ie equivalent to if one of you was earning over £30K. If so, then I think we're in similar financial positions. £22K is about my dh's take home pay, but have to admit that on top there's also child benefit (for three children for whom I'm currently a SAHM for), some tax credits, and also about another £2.5K from tutoring I do in the evenings. Presumiably as students though, you also get other perks such as no council tax, free prescriptions, subsidised transport etc. That £22K is starting to look like quite a decent family income!

We also have a very similar attitude to spending, I think. Well, maybe we haven't been out for a meal every month for quite a number of years (rather more expensive for a family of five!) but we do have the odd take-out. I also don't feel like I economize on food over and above just being sensible. I buy value or own brands where we can't tell the difference, but will pay for the more expensive versions if the family prefers it.

Our mortgage is eye-wateringly high relative to our income (currently £148K outstanding) and most of it is interest only, but we are making 'overpayments' which average out to at least equal to what a repayment mortgage would be. And as long as we can keep that up, then I'll continue to be a SAHM, maybe just upping the tutoring hours as the chldren get older.

cupid_stunt wrote:

You don't have to go without all luxuries to pay extra off your mortgage, and you don't have to earn loads - we don't. We just prioritise what we spend. We have friends who spend in a month as much as we save just on take-aways and cds/dvds. We don't have sky tv, a home phone, or a car - all of which we see as luxuries, unlike most people do.

Well said. But then that's the difference, isn't it. It's all about what you actually perceive as being a luxury, and what you'd be happy to forgo. We also don't have sky as we simply can't justify the extravagence, but others don't see it as an extravagence. So many on a much tighter budget than us still find the money for sky from somewhere. We do have a home phone, but our mobiles are very basic PAYG ones which cost a fraction every month compared to even the very cheapest contract phones. We do have a car (just one) but have always only ever bought what we have saved up for; never taken out a car loan. But as you say, you don't have to go without *all* luxuries. You just have to be picky with which ones you choose. And as your family changes, so do your priorities. ;-)

cupid_stunt wrote:

And when we get 'proper jobs' most of what we get over the 22k we're currently on will go towards the mortgage as well. By my current reckoning we should have paid off my 25 year mortgage in less than 7 years. Then we'll go through it all again with another house - can't wait lol

Good luck!

BoltonMinx

My mobile is on contract with 250 anytime x-network minutes which I find invaluable for making calls to other mobiles. It will cost me nothing plus I got £25 cashback. The phone was free and on a 12months contract with O2.

I've received my first cashback via bank transfer from mobilephoneshop. Reccomended InMyDreams as it will save you whatever you are paying on the PAYG provided you are disciplined enough to send the vouchers off in time.

You could then put the money you've saved in your mortgage pig