Reduce payment or term?

nikkinoo_3

Hi Everyone,
It's not often that I log in to this forum - but thanks to everyone for all the help and advice I frequently crib off you all.
I try to overpay my mortgage as much as possible, and for every £500 I overpay it reduces my minimum monthly payment by around £5. I then put the extra £5 towards the overpayments, thereby increasing the amount I can overpay by.
As the monthly minimum payment gets easier to manage my overpayments increase, also giving me the reassurance that if I or my husband found ourselves with a reduced income we could stop making the overpayments and keep the monthly payments up without any worries.
This way, (and with some nice big bonuses), I've managed to reduce our mortgage by just over £30,000 over the past 4 years.
At some point, when the monthly minimum payments are sufficiently reduced I'll look at reducing the term, but until then, knowing that there is effectively extra money in our pockets (if we didn't make the overpayments) is more reassuring than knowing that our mortgage would end early.
It's hedging my bets a bit, and it might not necessarily work for everyone, but it works for us.

I,M_SAD

I reduced my term from 18 years interest only to 15 yrs repayment.I know it,s not much but at 40 yrs and starting again after a separation with 3 children and reading a lot more about mortagages,I thought anything was better than staying as I was,I had poor credit and went to FA,who I trusted,and in all fairness I really can,t believe I never read the terms and conditions,but I did,nt.I just looked at the at the monthly payment figure.
I started reading the mortgage forum posts here about a month after mortgage,typical,and started to read through my mortgage terms:eek:
I initially wanted to do overpayments,but my mortage deal won,t allow it,so I opted to reduce by 3 years and convert to repayment,I nearly cried when I saw how much the figures were,and I nearly cancelled,but I started to adjust everything with my accounts,spending habits,bills,and food bills.My worry is that after the 3 yrs tracker deal ends my interest rate will be over 9%.I really wondered how I could have been so stupid then,but hopefully now I am gaining clearer credit,I am no longer in debt,have paid off my £800 agreed overdraft,never late with my bills anymore plus save every month again on top of mortagage I am really hoping I can transfer when tracker ends in 2010,unless the interest rate is 9% then:eek:

I am very aware of my age and working life left and really don,t want a mortagage beyond 50 if, I am being optimistic and 55 my worst case scenario.I am glad now to have reduced term as I cope better with the enforced repayment plus I prioritise better with mortgage,I think saving is great alonside your mortage payments,and so far I have stayed on track but I am realistic,I want as little as possible outstanding when my deal ends,but I do think a lot of my decisions are based on waking up and smelling the coffee,my age plus making the most of me making an uninformed choice.But then who is to say,I would have ever feasibly got a better deal.I suppose bar money saving you have got to think of your personality and your realtionship with money as well.I have a complicated relationship with money,I don,t do well being overdrawn,as it makes me give up,and spend more,I don,t do well with paying too little out as I feel I am not making progress either and I am fooling myself.

What I would reiterate as everybody else here has posted a mortgage is a huge commitment,I am glad I have one,and saving money wherever possible is great,that,s the point,but also making a decision sometimes is just as hard,now when I think of the money I wasted over the years,I sometimes cringe,bad taste with money choices,bad taste in men:rolleyes:.Those decisions over the years has cost me a great deal more.I may not have the cheapest mortgage and the most economical way of paying it back,but I am everyday conscious of how much better my future is by making decisions to aknowledge my need to pay off my mortgage and for things to happen I have to make them happen,and make the best of the situation I am in,and to rectify where I can with lack of insight and fear of making decisions to my advantage,I do think this site does help you to face your fears.There will always be somebody here that has a better deal,grip on money than I will ever have,a more savvy,economical mind but I believe also the site aknowledges many people like me,who have been poor in the past and encourages them to be informed,get as much advice as possible,but it is down to the individual to ultimately make their decisions about finances.It,s not just about the money though,it,s about knowing you are making good decisions,for yourself,to your limits,earning capacities and your dreams.Good luck.x

Optimisticpair

I,M_SAD wrote: »

It,s not just about the money though,it,s about knowing you are making good decisions,for yourself,to your limits,earning capacities and your dreams.Good luck.x

Indeed. Here we all are, different stories but the same aim, all putting our best foot forward, as determined as determined things. I'm enjoying the priceless satisfaction that comes with making informed decisions. Martin deserves a medal.

Rebob

I am with the Abbey and today made a £500 capital repayment. I shorten the term of the mortgage as they allow you to stretch the term back to the original date if you need to. As I do not have a product on the mortgage at the mo as we may be moving shortly, I am able to repay as much as I want but when I have had a product I was limited to 10% of the outstanding balance per year.

I am really pleased that together with the payment today I have payed an extra £1400 this year on the mortgage which is a lot given our income.