Tm's MFW ramblings

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  • turtlemoose
    turtlemoose Posts: 1,640
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    My rental is 3.19%, my home is 4.89% (both fixed).

    The £45.23 a month OPing the rental at the moment will save £5k in interest over the term. If I add that to the my-house OPs, according to the spreadsheet it saves me...£5k over the term.

    So I figured, either way, I'm saving £5k right?


    ALSO:

    The rental is with Nationwide so my OPs are building up a reserve that I could claw back if I had a long void period - current OP total is £1542 . I know they'd backdate the interest but it's a safety net if that property ends up sitting empty.


    Am I doing the right thing?
  • turtlemoose
    turtlemoose Posts: 1,640
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    gallygirl wrote: »
    Yup, massive OP's are great, but we all started where you are - except mostly we didn't as we were all too stupid to realise what a difference a small OP would make. So, we're jealous of you, if that makes sense :D.


    thanks gallygirl, maybe one day I will be able to join the ranks of massive OPers, work my way up so to speak :D
  • HelenDaveKids
    HelenDaveKids Posts: 3,177
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    Well done and welcome.

    Nearly all of us started small, and as said, you have the fact your doing earlier as a huge positive. I only increased as I realised the affect.

    My only question would be, couldn't you redirect your lottery money into an op?
    Morgage till Nov 30 GOAL MFW Sept 2016
    Aug 11 - £100k Aug 2016.... It's GONE!!!!!
    2014 GOAL HIT 5 Stone! 2016 GOAL to be a MF marathon runner.
    "A goal without a plan is just a wish"
  • Hurdler
    Hurdler Posts: 1,360
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    edited 18 March 2014 at 4:31PM
    Beckyy wrote: »
    HI, welcome! It sounds like you've had quite a journey already, and I'll wish you the best of luck on your MF one. :beer:

    What are the interest rates on the two mortgages?

    As a LL myself I would never OP my BTL mortgage whilst I had one on my own house really. Bearing in mind mortgage interest on rental properties is a tax deductible expense it doesn't really make sense to unless the interest rate is horrendous. Just my 2 pence but may be worth you OPing the money onto your own houses' mortgage rather than your BTL as you can only live in one house and that's the important one.

    Absolutely this. The friend who helped me get into the mind-set of renting out my first ever flat (pauses for reminisce ...) practically battered into me to have the BTL just washing its face while I had my own mortgage. That's why it doesn't figure ANYWHERE in my plans to overpay. It's like it isn't even there!

    (except my tenant is doing my head in a little... but that's a whole other story!) :D

    Also - I started with teeny overpayments - a hundred here, then half a monthly amount there until I ended up in a very well paid job which was a HORROR on every single level. The ONLY good thing I got from that was being able to throw money at the mortgage for nine months before I quit to take a job that paid less than half of what I was earning, but I sure as hell am a lot happier. Until players drag their stupid matches on past midnight when I am working a night shift. Then I want to decapitate them with their own tennis racquets... but that's a whole other story! :D:D
    • Mortgage @ March 2008: £194,965 ; Lightbulb Moment: July 2011: £164,926; End Date: March 2033
    • MORTGAGE FREE: September 2015
    • MSE 1p Savings Challenge 2023 #70: Jan, Feb, Mar, Apr, May, Jun, Jul, Aug, Sep, Oct, Nov, Dec = £667.95/£667.95
  • turtlemoose
    turtlemoose Posts: 1,640
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    Hi HDK, OH wants to do the lottery ....and I must admit I kinda like it too.... we ended up reaching a compromise, as we used to spend double that (oops) - so we halved it, we're still in the game but not spending as much iyswim.

    Just had £3 from pinec0ne so shall cash that in at home tonight and ping it off as an extra OP , yay!! ;)
  • turtlemoose
    turtlemoose Posts: 1,640
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    But I save £5k either way, so why is it better to OP on my-house instead of tenant-house - it's my equity, my interest savings, no matter which property?

    I feel like I'm missing something REALLY obvious here.... :D
  • edinburgher
    edinburgher Posts: 13,450
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    Welcome :coffee:

    A couple of questions:
    • Are you paying interest on the personal loan?
    • Do you have the money saved to pay off the 0% card?
    it's my equity, my interest savings, no matter which property?

    I thought mortgage interest was tax deductible for a BTL? So isn't it 'cheaper' to borrow BTL money (assuming identical headline mortgage rates)?
  • Hurdler
    Hurdler Posts: 1,360
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    Welcome :coffee:

    A couple of questions:
    • Are you paying interest on the personal loan?
    • Do you have the money saved to pay off the 0% card?



    I thought mortgage interest was tax deductible for a BTL? So isn't it 'cheaper' to borrow BTL money (assuming identical headline mortgage rates)?

    Yep - that's my understanding...at least, the accountant makes me hang on hold for an utterly interminable amount of time to get a statement of interest from my mortgage lenders to apply against the income!
    • Mortgage @ March 2008: £194,965 ; Lightbulb Moment: July 2011: £164,926; End Date: March 2033
    • MORTGAGE FREE: September 2015
    • MSE 1p Savings Challenge 2023 #70: Jan, Feb, Mar, Apr, May, Jun, Jul, Aug, Sep, Oct, Nov, Dec = £667.95/£667.95
  • turtlemoose
    turtlemoose Posts: 1,640
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    ohhhhhh the penny has dropped, finally. More interest on the BTL is off set by tax relief, therefore the OP works harder on the residential mortgage, and of course my spreadsheet doesn't take this in to account as it does not include my tax bill.

    edinburgher: Yes there is interest on the loan (4.9%). The credit card - before the interest free ends, I've already been accepted for the new Nationwide 0.75% fee card, so I'll be transferring £2357.32 of it over there (The maximum I can). The balance will be £1835.36 when the 0% ends - I'd planned to tart it elsewhere on to 0% again. I'll start applying for the cards early, and if it looks like I'm not going to get a 0% then I will stop the mortgage OPs and throw them all at the credit card instead. However I'm pretty confident I'll get a 0% when I need it, Santander write to me often practically begging me to take a credit card with them!
  • edinburgher
    edinburgher Posts: 13,450
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    Yes there is interest on the loan (4.9%).

    Is it higher than your mortgage? If so, it's in your best interest to pay it off sooner than OPing the mortgage :)
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