New and not sure how it's possible!!!

ANewMrs

Hi Everyone,

I've just found this website today and have a feeling I'm hooked already! I've recently got married and the wedding made me realise how much money me and hubbie spend each month!
So now there's no wedding to pay for I figure we can focus and pay mortgage overpayments instead.

Our mortgage currently stands at about £155,000 (over 21 years) which really does scare me! And for the last 2 years we have been paying an extra £20 a month. I know it's hardly worth it but it's better than nothing I suppose???

I've had a look at one of the calculators and just to get it down to 10 years we'd have to pay £635 extra each month! We definitely can't afford this but our £20 needs to be added to!

Any advice would be greatly received and also let me know if I'm on the wrong forum as I certainly won't be paying off as quickly as some seem to be!

Also, could comeone let me know how I can work out our daily interest....I think this will give me the kick in the right direction I need.

Thanks

TSM_2

I play around with the following mortgage calc quite a bit to see what effect my overpayments and additional lump sums make. It all helps, even the extra £20 you add.

http://new.egg.com/visitor/0,2388,3_54988--View_1028,00.html

If you take a look at the calculator and based on a £155,000 mortgage over 21 years @ 5.49% (Not sure what % deal you have) and over paying by £20 per month you will save yourself £4321.57 over the term.

setmefree2

No advice but just wanted to wish you Good Luck:T:T:T. Maybe you should join the 2008 challenge

ANewMrs

Thanks for your replies.

I have had a look at the calculator and if we increase our overpayment to £50 we will save £10627 over the term!!!!
So....I have just logged on to internet banking and changed the £20 to £50 and I'm feeling quite pleased with myself!

As we have a credit card to pay off (wedding extras!) and some saving to do I think this is realistic for now.

I suppose it's a good start and we will have to see how the next couple of months go and maybe we can increase it again.

Setmefree, I can't believe how much your mortgage has decreased....well done!!!

Thanks again for your replies!

JonnyBravo

ANewMrs wrote: »

Also, could comeone let me know how I can work out our daily interest....I think this will give me the kick in the right direction I need.

Thanks

We've got your mortgage value (£155k) and your term (21 years) so we just need your interest rate and then we can work it out! :cool:

clarew

£20 or £50 a month is fab, i am currently paying £23 off amonth, and it all makes a difference. Not only that, but as your situation changes, like a payrise or credit card bills finished then you can always look to increase.

Better to pay something rather than nothing! Good luck with your quest.

bunking_off

Best advice is always to pay off your most expensive debt first. What's the interest rate on your credit cards? So long as you can trust yourself not to spend on your credit cards again, if your credit card rate is higher than your mortgage rate you'd be better placed putting your £20/50 into paying these off before you overpay the mortgage.

Kaz2904

While that's true it may not be possible to clear the credit card onto an interest free deal when it's needed. That's when the interest rates could skyrocket and wipe out any interest saved.
Echoing all other posters- any overpayment is good!

ANewMrs

Thanks for all of the advice guys....my rate at the mo is 5.75%

With the credit card, it's interest free until November so want to get it paid off by then, I know I should save the cash to earn interest and pay it off at the last minute but not sure I could trust myself or if it would make that much anyway???

Wish I'd married a finance expert now....haha!!!!

bunking_off

As you say, you could put the money that you're paying off your cc into a high interest account, then draw it out in November to pay off your card when the 0% deal ends. However, if you feel you can't trust yourself not to dip into it, you're doing the right thing by paying it down...in reality the interest you're losing isn't that high (say approx 2.5% of the outstanding balance at most).

On that basis, you're going about things the right way...pay enough of your credit card so it's clear by Nov, use the remainder to overpay the mortgage. Good luck!!!

JonnyBravo

Here's your answer.....

using £155k, 21 years, 5.75%

A monthly payment of c. £1060 of which c. £742 is currently interest.

Daily interest = 742/30 = £24.73