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  • FIRST POST
    • labradorlove
    • By labradorlove 21st Feb 18, 7:46 PM
    • 61Posts
    • 100Thanks
    labradorlove
    Journey to a mortgage free future
    • #1
    • 21st Feb 18, 7:46 PM
    Journey to a mortgage free future 21st Feb 18 at 7:46 PM
    After almost a year of reading peoples mortgage free diaries, I've finally decided to start my own! I'm not very good at sticking to things, especially diaries! but hopefully by starting this thread it will keep me on track of my own mortgage free journey

    Me and my fiance bought our first home together on the 2nd June 2017! It's just me, him and our furry child at the moment, who is laid at my feet while I post (the dog not my DF)

    We put down a 13,500 deposit on a 135,000 3 bed semi-detached house, not a lot of money, but we worked very hard and it got us on the property ladder with a good interest rate.

    Mortgage taken out 121,500 at 2.21% (fixed for 2 years) with Santander with a term of 27 years and 3 months

    I'd never considered over paying before my plan was to get on to the property ladder and that's that. But then while house hunting and reading all these diaries and journeys it just made sense to put our disposable income to some good use!! We don't drink a lot, neither of us smoke, neither of us have any debts apart from the mortgage we now have together, we love to save and there are no children on the scene yet! So what better time to start cutting that mortgage down?!

    I wanted to start overpaying straight away but they aren't lying when they say the first 6 months are the most expensive!

    So we managed to make our first over payment last month of 200, I was so excited ringing them up I couldn't wait for payday, such a good feeling knowing you're one step closer to paying it off, even if it's one out of a thousand steps!

    200 is the monthly target I am setting myself for this year, so anything I manage over is a bonus So far this month 100/200 has been paid. Waiting for DF payday to pay his half team work makes the dream work and all that.

    Looking forward to sharing my journey, and hearing about everyone elses

    Going now to get a nice early night before work and the gym tomorrow!

    Labradorlove x
    Last edited by labradorlove; 24-04-2018 at 7:30 AM. Reason: spelling grr
Page 3
    • kev2009
    • By kev2009 7th Jun 18, 5:06 PM
    • 434 Posts
    • 602 Thanks
    kev2009
    No I don't think it works like that, as far as I'm aware at the end of your fixed rate you can remortgage elsewhere (which involves further credit checks, valuation of your home etc) or you can renegotiate with your current mortgage provider on a new fixed rate.


    In regards to car savings I'm not entirely sure I'm just going to continue saving as much as I can in the hopes that I'll be able to buy outright but we'll see when the time comes depending on my situation at that time. I'm in no rush for one as my DF works close and he takes me there and back. But planning ahead in case either of us gets a new job as we're both working on moving up in our careers.



    I wish we were spending that much on eachother! 360 each covers everything at Christmas, gifts for each other, our fur baby, our families, and alcohol all factored in


    Make sure you take advantage of the MSE energy club to compare and you can select an option to remove all those companies you haven't heard of and focus on the big suppliers. Good luck
    Originally posted by labradorlove
    HI,

    Thanks, when you say negotiate a new rate, I presume you mean you get to effectively move to the rate they advertise for a fixed rate for x years as opposed to getting a better rate?

    ah ok 360 not too bad then Yes i did join up but need to find my password. Last time I believe they didn't have any deals and typically after i signed up to my fixed deals there was one out a bit later on. As said I've found Zog to be fine and no problems so far so will hopefully remain with them subject to the prices of course, i found they are cheaper than the big 6. Electricity i didn't find any real solid good reviews of the cheaper providers when i was looking so went with a bigger company who were not too far down the list of cheapest suppliers and also still meant i was cutting my daily standard charge in 1/2 plus a cheaper unit rate

    I'm considering switching my car next year, it will be 3 years old then and out of warranty and will then mean paying for extended warranty. It still has a service plan till 2020 so that's ok but I found on my previous car if i leave it till towards end of the service plan, I don't get too much money back towards another so i'm currently thinking of either a) Keep my current one and run it until its no longer viable or B) trade it in and get a cheaper car such as maybe a Ford Focus and then have a small loan to pay back or if i'm lucky have nothing to pay back depending on the cost of the Focus, would be nice to get Brand new as never had a brand new car but also will consider a 1 year old one if price is better and spec is decent. So will have to see, ideally i would love to trade mine in and then pick up a focus for the value of the trade in as means no additional outlay for the car but will mean road tax is higher as my current car falls under the older cheaper road tax rates (30 a year) however my insurance is extremely high and unfortunately based on quotes for a Focus, it will only come down by 100 which isn't a lot. After some investigation a while back on a different forum i'm on, we concluded that i'm in one of the top 3 or 5 highest postcodes for insurance so that's what keeps my premiums up

    Kev
    • labradorlove
    • By labradorlove 8th Jun 18, 6:49 AM
    • 61 Posts
    • 100 Thanks
    labradorlove
    HI,

    Thanks, when you say negotiate a new rate, I presume you mean you get to effectively move to the rate they advertise for a fixed rate for x years as opposed to getting a better rate?

    ah ok 360 not too bad then Yes i did join up but need to find my password. Last time I believe they didn't have any deals and typically after i signed up to my fixed deals there was one out a bit later on. As said I've found Zog to be fine and no problems so far so will hopefully remain with them subject to the prices of course, i found they are cheaper than the big 6. Electricity i didn't find any real solid good reviews of the cheaper providers when i was looking so went with a bigger company who were not too far down the list of cheapest suppliers and also still meant i was cutting my daily standard charge in 1/2 plus a cheaper unit rate

    I'm considering switching my car next year, it will be 3 years old then and out of warranty and will then mean paying for extended warranty. It still has a service plan till 2020 so that's ok but I found on my previous car if i leave it till towards end of the service plan, I don't get too much money back towards another so i'm currently thinking of either a) Keep my current one and run it until its no longer viable or B) trade it in and get a cheaper car such as maybe a Ford Focus and then have a small loan to pay back or if i'm lucky have nothing to pay back depending on the cost of the Focus, would be nice to get Brand new as never had a brand new car but also will consider a 1 year old one if price is better and spec is decent. So will have to see, ideally i would love to trade mine in and then pick up a focus for the value of the trade in as means no additional outlay for the car but will mean road tax is higher as my current car falls under the older cheaper road tax rates (30 a year) however my insurance is extremely high and unfortunately based on quotes for a Focus, it will only come down by 100 which isn't a lot. After some investigation a while back on a different forum i'm on, we concluded that i'm in one of the top 3 or 5 highest postcodes for insurance so that's what keeps my premiums up

    Kev
    Originally posted by kev2009

    Yes but I think they offer your new rates based on your new LTV bracket, so the rates will be better than what you originally were offered before you fixed for 5 years.


    Oh no there's nothing you can do about the car insurance unless you're willing to move but a 100 saving is better than no savings!
    Mortgage left: 114,203.85
    Savings: 5,000/552
    OP Target 2019: 2,500/900
    Emergency fund: 1,000/500

    Christmas pot: 660/380
    • labradorlove
    • By labradorlove 8th Jun 18, 10:22 AM
    • 61 Posts
    • 100 Thanks
    labradorlove
    Done well with having a full 3 NSD this week, apart from Monday for DF birthday, we haven't eaten out/ordered food for 3 days now, will be 4 if we can make it through today (An achievement for us this past month) partly because I'm skint and refuse to dip into savings. Also we've taken pack ups to work everyday, the temptation to nip to the chippy was there (even today) but I'm resisting and will settle for my pasta lunch! Started to leave any loose change at home too so I can't use the vending machine.


    So still haven't had to use my 10! Cooking again tonight and nothing costly panned for the weekend so hopefully I can carry on this NSD streak
    Mortgage left: 114,203.85
    Savings: 5,000/552
    OP Target 2019: 2,500/900
    Emergency fund: 1,000/500

    Christmas pot: 660/380
    • kev2009
    • By kev2009 8th Jun 18, 7:00 PM
    • 434 Posts
    • 602 Thanks
    kev2009
    Yes but I think they offer your new rates based on your new LTV bracket, so the rates will be better than what you originally were offered before you fixed for 5 years.


    Oh no there's nothing you can do about the car insurance unless you're willing to move but a 100 saving is better than no savings!
    Originally posted by labradorlove
    Hi,

    ah ok so looking around at LTV, it seems the lowest on various bank websites is 60% LTV, is that the lowest? I mean can you get a 10/20/30/40/50% LTV bands? Also I noticed Santander no longer have a 60 or 65% LTV band, there lowest is 75% ? I wonder why they no longer have 60 or 65% whichever it was ?

    Well you could call it 100 saving BUT that is only IF i don't have any claims as my excess has had to go up from 350 total excess (vol+Compulsory) to 500 (Vol + Compulsory) and it is still higher than last year by around 30 - 40...

    Unfortunately moving isn't really a option, where I am is convenient to commute and moving elsewhere brings higher commuting fees let along the cost of moving itself and the headache of getting new mortgage etc so that's not really a option for now.

    Kev
    • kev2009
    • By kev2009 8th Jun 18, 7:14 PM
    • 434 Posts
    • 602 Thanks
    kev2009
    Done well with having a full 3 NSD this week, apart from Monday for DF birthday, we haven't eaten out/ordered food for 3 days now, will be 4 if we can make it through today (An achievement for us this past month) partly because I'm skint and refuse to dip into savings. Also we've taken pack ups to work everyday, the temptation to nip to the chippy was there (even today) but I'm resisting and will settle for my pasta lunch! Started to leave any loose change at home too so I can't use the vending machine.


    So still haven't had to use my 10! Cooking again tonight and nothing costly panned for the weekend so hopefully I can carry on this NSD streak
    Originally posted by labradorlove
    Congrats - the problem with NSD is after a while it gets boring and you think oh ok i done this for x period of time, i'll just have this or that.

    My typical "excuse" is I often say oh I bought this item but its a one off, i don't buy them every week etc so it gets classed as a one off. The problem is, i seem to have a lot of "one offs" lol. Some examples are:-

    Hard drives - classed as one of !!! don't buy them every month/year and will last a few years before i need to replace or they fail.

    TV - again don't buy a TV all the time so classed as a one off. However i'm still considering buying a new one this year as the one i bought was purchased in 2015, is a Samsung 40" 4k tv but the remote is sooo appalling its untrue - literally i turn it on and i have to wait a good 2 or 3 mins before the TV will respond the the remote control and then afterwards if i want to change channel/increase volume/bring up tv guide or anything, it an take 4 or 5 goes, even moving the remote around, before it will pick up the signal, very bad. Its a shame as the picture quality is pretty good and that's just on standard TV channels, I don't have any channels I can view in 4K and I've only watched one 4k movie on it and tbh it was a good picture but didn't really see a major improvement over 1080p for example so i'm considering a different model TV and maybe slightly bigger as the bezels have got smaller However i can't go too mad as i don't have alot of room for it so i'm thinking absolutle max is probably 48/49" tops and realistically probably 42 or 43" so it doesn't look too out of place.

    My immediate "one off" purchase I am looking at is a new Power supply for my PC as I've noticed over the last few months or so that every now and then when its really hot, there is a funny kind of burning smell. The only thing on in my room is the PC so the toe day i have a look and googled my power supply and sure enough it seems to be a common issue with the power supply as the top fan doesn't seem to kick in even though it shouldn't initially it should if too hot s its a silent power supply or meant to be so currently need a replacement, i can still use it but i no longer leave it on for several hours.

    Kev
    • labradorlove
    • By labradorlove 11th Jun 18, 9:56 AM
    • 61 Posts
    • 100 Thanks
    labradorlove
    So after just finding out my company had a pay rise in April and that my wage has gone up as I've passed my 6 months probation, I have completed a SOA on my new take home pay which is around an extra 1400 a year The SOA is calculated on my wage only, so all joint bills are halved


    Statement of Affairs and Personal Balance Sheet
    Household Information

    Number of adults in household........... 2
    Number of children in household......... 0
    Number of cars owned.................... 0
    Monthly Income Details

    Monthly income after tax................ 1285
    Partners monthly income after tax....... 0
    Benefits................................ 0
    Other income............................ 0
    Total monthly income.................... 1285

    Monthly Expense Details

    Mortgage................................ 250
    Secured/HP loan repayments.............. 0
    Rent.................................... 0
    Management charge (leasehold property).. 0
    Council tax............................. 60
    Electricity............................. 10
    Gas..................................... 10
    Oil..................................... 0
    Water rates............................. 10.5
    Telephone (land line)................... 0
    Mobile phone............................ 36
    TV Licence.............................. 6.2
    Satellite/Cable TV...................... 0
    Internet Services....................... 14
    Groceries etc. ......................... 60
    Clothing................................ 0
    Petrol/diesel........................... 0
    Road tax................................ 0
    Car Insurance........................... 0
    Car maintenance (including MOT)......... 0
    Car parking............................. 0
    Other travel............................ 40
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 0
    Pet insurance/vet bills................. 18.5
    Buildings insurance..................... 6
    Contents insurance...................... 0
    Life assurance ......................... 11
    Other insurance......................... 8
    Presents (birthday, christmas etc)...... 0
    Haircuts................................ 0
    Entertainment........................... 180
    Holiday................................. 0
    Emergency fund.......................... 20
    (Unnamed monthly expense)............... 0
    Christmas............................... 30
    Gym..................................... 20
    Sofa Interest free finance.............. 10.65
    Dog Walker.............................. 40
    Apple Music............................. 7.5
    Total monthly expenses.................. 848.35


    Assets

    Cash.................................... 500
    House value (Gross)..................... 140000
    Shares and bonds........................ 0
    Car(s).................................. 0
    Other assets............................ 500
    Total Assets............................ 141000


    Secured & HP Debts

    Description....................Debt......Monthly.. .APR
    Mortgage...................... 118782...(250)......2.21
    Total secured & HP debts...... 118782....-.........-

    Unsecured Debts
    Description....................Debt......Monthly.. .APR
    MBNA...........................1900......100...... .0
    Total unsecured debts..........1900......100.......-


    Monthly Budget Summary

    Total monthly income.................... 1,285
    Expenses (including HP & secured debts). 848.35
    Available for debt repayments........... 436.65
    Monthly UNsecured debt repayments....... 100
    Amount left after debt repayments....... 336.65

    Personal Balance Sheet Summary
    Total assets (things you own)........... 141,000
    Total HP & Secured debt................. -118,782
    Total Unsecured debt.................... -1,900
    Net Assets.............................. 20,318
    Mortgage left: 114,203.85
    Savings: 5,000/552
    OP Target 2019: 2,500/900
    Emergency fund: 1,000/500

    Christmas pot: 660/380
    • kev2009
    • By kev2009 11th Jun 18, 7:04 PM
    • 434 Posts
    • 602 Thanks
    kev2009
    HI, interesting SOA... Couple of Questions - the house value - is that the house's current value or what you paid for it?

    Mobile phone - 36 a month? how comes? I am with 3 and I have unlimited mins, unlimited texts and 4GB data for 10 a month. I did however buy the phone sim-free so maybe yours includes the phone? Maybe look at buying a phone sim-free? This is how i look at it - lets say from your "spare" month you saved 250 a month, thats 3k a year, lets say you buy a new phone every 2 years, so you saved 6k in that time, spend say 500 or 700 on a new model phone, keeps the monthly costs down, at least that's how I do it, i prefer to pay a larger one off cost and go that it done and dusted, now back to normal monthly outlay. I save a set figure every month I can - some months i can't as literally every penny is gone but most months i can and then every 2 years i buy a new phone mainly because the one I have starts to deteriorate i.e no longer keep charge for a whole day or some odd behaviour happening.

    Haircuts = 0?? How comes? You never cut your hair? lol

    Where did you get the SOA from, out of interest, might put mine in and see what it shows lol

    Kev
    • kev2009
    • By kev2009 11th Jun 18, 8:23 PM
    • 434 Posts
    • 602 Thanks
    kev2009
    Hi, just going through this SOA and does your 14 internet Services include the line rental? I pay my line rental upfront at around 200 odd quid a year.

    Also, does your building insurance include contents? mine does, all in one.

    Also, don't forget to factor in any regular savers you pay into or savings you want to make each month as i effectively class these as a bill so as i ensure i pay money into those accounts.

    Kev
    • kev2009
    • By kev2009 11th Jun 18, 8:33 PM
    • 434 Posts
    • 602 Thanks
    kev2009
    Hi,

    do you include pension payments? u don't see it listed.

    Kev
    • nickdentrinos
    • By nickdentrinos 19th Jun 18, 10:34 AM
    • 2 Posts
    • 2 Thanks
    nickdentrinos
    Best of luck in your quest to be mortgage free
    • kev2009
    • By kev2009 26th Jun 18, 6:16 PM
    • 434 Posts
    • 602 Thanks
    kev2009
    Hi any updates labradorlove?

    I been looking at mine and IF my calculations are right i'd end up owing a bit more than i originally thought my not reducing the term but the monthly amount so i'm now aiming to try and offset that with a over payment this year. From what I can tell the over payment can be between Jan and Dec, it doesn't go from when you took the mortgage out for example June to June... which i originally thought it would. I worked out if i can pay 2k this year then i should be in a good position to get to the figure i wanted to be at at the end of my 5 year term, providing i can make my following 2 over payments in 2019 and 2020 before the fixed rate ends.

    This should leave me in good stead i hope to offset any potential interest rate rises, fingers crossed.

    I'm thinking at the moment of phoning the bank maybe in October and discussing the overpayment option and see what they say.

    Ideally i want to keep the term the same and reduce the monthly payment BUT then just set my monthly payment to the same figure i pay now so effectively overpaying a small amount each month, then towards the end of the following year, make a larger one off payment, without going over my 10% limit. But that may not be possible. Will have to see.

    Kev
    • labradorlove
    • By labradorlove 12th Jul 18, 10:28 AM
    • 61 Posts
    • 100 Thanks
    labradorlove
    Update: STILL not made any overpayments! And don't plan to at the moment either, going to throw all my excess income at getting my car, so far I stand with 700, payday Monday will bring it up to 1,000 .... I'm hoping to have 4,600 by July next year by putting 300 aside a month which means I can buy the car I want outright without tying myself into any finance and pay my insurance up front for the year!


    I'm hoping this works out as planned, I've been putting 30 a month away for Christmas so that won't don't any excess money this year. Me and DF don't have any holidays booked atm but that could change next year so the 300 monthly savings might be amended during this time but who knows what the future holds


    That's the new plan of action, overpaying is being put on hold so I probably won't be updating my thread for a while unless I get a new bright idea to generate extra income


    Thanks for reading x
    Mortgage left: 114,203.85
    Savings: 5,000/552
    OP Target 2019: 2,500/900
    Emergency fund: 1,000/500

    Christmas pot: 660/380
    • labradorlove
    • By labradorlove 12th Jul 18, 10:31 AM
    • 61 Posts
    • 100 Thanks
    labradorlove
    I do have pension payments I pay around 94 a month into a workplace pension but I had already taken that out before my take home pay
    Mortgage left: 114,203.85
    Savings: 5,000/552
    OP Target 2019: 2,500/900
    Emergency fund: 1,000/500

    Christmas pot: 660/380
    • kev2009
    • By kev2009 16th Jul 18, 12:44 PM
    • 434 Posts
    • 602 Thanks
    kev2009
    Hi labradorlove

    Hope you manage to save what you need to buy the car you want. I'm currently working on the idea of paying off 2k of my mortgage this year. I know its not a huge amount and probably wont make much difference but i'm hoping to be able to pay off more next year as I have already setup some regular saver accounts which i'm hoping I wont need to touch and can use the money from those, fingers crossed. I've also been looking at my spreadsheet recently and I IF (big IF) i have worked it out right, paying 2k this year followed by a larger payment next year and the following year before my 5 year fixed is up, I'm hoping will make a good dent in ensuring any interest rate rises will mean my monthly payments wont go over what i'm currently paying. Plan is for now to reduce monthly payment each month and keep term the same, then when i re-fix my mortgage, I'm hoping to then overpay and then keep my monthly figure the same and reduce the term as I think this will work out ok for me, all being well.

    Good luck! Be sure to let me know how you get on when you come to re-fixing your mortgage as i'm keen to understand the process more as will be my first time in 2020, interested to see what they want to know (if anything) if you remain with the same provider, assuming they still competitive of course.

    Kev
    • jodles16
    • By jodles16 6th Sep 18, 6:10 PM
    • 1,453 Posts
    • 4,395 Thanks
    jodles16
    Hi Labradorlove!


    I think its so important to remember this is a MF journey and that making OP's is great, but so is the other stuff! We recently took a break from OPing the mortgage as we had hit the 80%LTV and it meant that we could get a good new deal which we were happy with and we could focus on other things for a little while! I will find the balance someday!haha.



    Saving for a car etc is a great idea, much better than having to pay for a loan! And great news on the payrise! I do love the idea of Cuba, its definately on my todo list!


    Jodles
    MFW2017 #29 1200.24/4524
    MFiT #66
    Overall aim 10,124.20/21,743 (156,000)
    2016- Jan-177,472, Apr-173,195.04, July- 171,417.47 Oct- 169,366
    2017- Jan- 167,347.80 Apr- July- Oct-

    • labradorlove
    • By labradorlove 11th Sep 18, 6:35 AM
    • 61 Posts
    • 100 Thanks
    labradorlove
    Hi Labradorlove!


    I think its so important to remember this is a MF journey and that making OP's is great, but so is the other stuff! We recently took a break from OPing the mortgage as we had hit the 80%LTV and it meant that we could get a good new deal which we were happy with and we could focus on other things for a little while! I will find the balance someday!haha.



    Saving for a car etc is a great idea, much better than having to pay for a loan! And great news on the payrise! I do love the idea of Cuba, its definately on my todo list!


    Jodles
    Originally posted by jodles16

    Hi Jodles!


    You know what, you're absolutely right! I've missed updating this thread and it's all part of the journey so I'm going to start again as there's been some changes now anyhow!


    Updates to follow


    Congratulations on hitting your 80% LTV that's a big achievement
    Mortgage left: 114,203.85
    Savings: 5,000/552
    OP Target 2019: 2,500/900
    Emergency fund: 1,000/500

    Christmas pot: 660/380
    • labradorlove
    • By labradorlove 11th Sep 18, 7:06 AM
    • 61 Posts
    • 100 Thanks
    labradorlove
    Hi all


    Ok so I put the thread on hold because I had to put the overpayments on hold. But I will no longer be paying for the MBNA card for as long as I thought


    Just a list of things that have changed recently


    1. DF has a new car as of the weekend just gone, is now finance free, and has agreed that we're going to pay off the MBNA card by Feb 2019 instead of original end date being January 2020. By paying this off sooner, it means that once funds are freed up in Feb, we can go back to overpaying!! so excited for this. It means instead of paying 100 each a month we'll be paying 300 each off the card. Bye bye credit card debt.....


    2. With DF new car, I'm now on the insurance with him to gain confidence in my driving skills. Also means I'm now not in a rush to buy a car myself. Also applied internally for a higher position which will be located in the city centre. If all goes well I won't need a car as parking is expensive there so I'll continue using public transport.


    3. Pay rise went well. Monthly income after tax is now 1,306. Once all outgoings are set aside including my monthly spending moneys, I have 429. 300 of that goes straight to MBNA and then I'll have 129. I get paid Friday but we're going for a weekend away with the dog the first week in October so I'm using the spare 129 for that weekend. This means savings are on hold but looking good at 1,200 and haven't dipped in to them yet.


    4. Had my first cash out from OnePoll, at 30, so building that up again now, I also won a FB competition they had going so I was credited 10 to my account which gave me a boost! Set up a prolific account and cashed out a total of 22 so far. Have just been spending these as they come not sure exactly what on I'm thinking maybe I should start a spending diary as me and DF get a bit silly on a weekend, mainly with takeaways and meals out!! But also bits and bats like scratch cards, chocolate, new (expensive) toys for the dog when he's more than happy with a 2 charity shop teddy


    Anyway. I can't wait to get the MBNA card GONE!! To focus on hacking away on the biggest chunk of our outgoings and looking for more ways to generate income as prolific seems to have forgotten about me and haven't had a survey for over a week hmmm.


    Hope everyone is well feels good to be posting again and not just lurking...
    Mortgage left: 114,203.85
    Savings: 5,000/552
    OP Target 2019: 2,500/900
    Emergency fund: 1,000/500

    Christmas pot: 660/380
    • kev2009
    • By kev2009 22nd Sep 18, 11:38 AM
    • 434 Posts
    • 602 Thanks
    kev2009
    Congrats on the pay rise, hope the new position materialises If you get it and wont be needing a car any time soon, would you be keeping the cash for emergency or using that towards your MBNA card which would reduce the time to pay it off, assuming your signature figures are up to day

    Look forward to the new updates to your post.

    I haven't paid any over payments yet, looking to hopefully do that next month, all things being well. Need to go to the bank and with draw some money and then pay it into another account as with 1 bank i only have a book account and they don't allow me to transfer money to different accounts online

    Fingers crossed for next month when i figure out what I need to do to make the OPment

    Kev
    • lhoney
    • By lhoney 20th Nov 18, 1:17 PM
    • 24 Posts
    • 4 Thanks
    lhoney
    Hello, just wanted to add my name to this since it's something I've been thinking far more seriously about over the last few months.

    I got the mortgage in 2014 with my husband for a 115,000 property value (three bedroom semi-detached in the East Midlands) with 10% deposit and 30 year term. Until this summer, I never really understand what overpayments were, I think because my initial appointments with the bank were quite confusing and they seemed to be trying to put me off even considering doing it (which I understand now, since it's better for them if you don't) so I always thought of it as "a bad thing". Thanks to this forum and reading all your encouraging posts I've learned a lot more about how mortgages work and what the various terms mean.

    I think realistically we can pay our mortgage off within the next 12 years, so cutting nearly 14 years off the term. Neither of us are on high salaries (our combined income before tax is around 32,000), but we don't have children or a car or credit cards, so we can afford to do what we like plus put savings away every month. (I've never really understood why people compare incomes as if it means anything anyway since people's lifestyles are so different and everyone has different priorities. People I work with who earn much more than me, including my manager who is on four times my salary, always seem to be complaining that they have no money!) For the last few years we'd just been putting savings into our ISAs every month since we didn't really know what else to do with it, but thankfully we know better now.

    My annual overpayment "resets" in January and I can overpay by 10% of the remaining mortgage every year. I by 5000 in August to make up for the missing months, then 400 in September, 600 in October and next week hope to pay 250 (my roof needed some work, plus outgoings were higher with Christmas coming up). I think I'm better off just calculating an amount at the end the month from what's left over instead of committing to an exact amount, since what's left after outgoings can vary quite a bit and we both want to put away some cash savings every month too.
    • kev2009
    • By kev2009 22nd Nov 18, 7:09 PM
    • 434 Posts
    • 602 Thanks
    kev2009
    Hi lhoney,

    When you make your overpayment(s) do you pay it off the capital? if so, do you then reduce the term or reduce your monthly payments?

    I'm inquired on my Mortgage a month or so ago and i was told the total i coudl overpay (whcih was more than i thought as i thought it was 10% of what i owed a the tie i made the payment but look more into it, it seems maybe its 10% at the anniversary of the accountor Jan eachyear).

    As you may of read above, I've only had my mortgage since 2015 so I've not over paid anything at all yet, just been making the monthly payments but I plan to make a relatively small (in comparison to the 10% i could pay) over payment in December and keep my term the same and reduce my monthly payments. Reason being my 5 year fixed term is up in 2020 and if predictions of interest rate rises are true then having a longer term will help keep my monthly payments down. So my plan is to overpay small this year, overpay as much as I can next year and in 2020 to reduce the mortgage still reducing monthly payments. Then once I re-fix for 5 years, i then plan to overpay what I can and have it reduce the term. Then all being well at the end of that 5 years (making 10 years overall) I should be in a much better place in terms of the mortgage and owe much less so in that respect hopefully any interest rate rises wont have the high impact they would have at the moment.

    Kev
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