Getting rid of a London-sized Mortgage

Jessy103 · 3 October 2017 at 10:34AM

Oh tropically, what a dilemma with your parents and the wedding! At the end of the day you can't please everyone and just have to do what makes you and OH happy! Me and my DH had a small wedding which was at the registry office and then a nice meal at a local hotel/restaurant, I think there was 50 people there including us and that was enough for me! Good luck and I hope your parents are happy with whatever decision you make.

Tropically · 4 October 2017 at 8:54AM

It is a dilemma. It is so strange because I have not had a fight or disagreement with my parents since I was a teenager, and I would normally say that they are incredible parents who have always treated me with love and respect. They have been a little bossy, but only as a minor flaw! I am so baffled by the way they are feeling about this wedding.

I have other exciting news. I have discovered exactly why our bank recalculates our mortgage payments after each overpayment. An overpayment reduces the principal, and interest is charged on the principal. If our monthly payment remains the same, but the amount of interest due goes up, the rate that we pay our principal goes up.

In math terms:

MortgageRepayment = Interest + PaymentToPrincipal

If interest due goes down, then payment to principal goes up, and next month the interest is down further, and the payment to principal goes up, and you get that snowball effect which is so wonderful.

If they reduce the mortgage repayment, they reduce the snowball effect and keep the principal higher, and so more interest is due over time. This might be obvious to everyone but I have just had a major light bulb moment about how they calculate it.

They want to make about £440 from me every month. They don't want me to snowball, they want me to pay off my principal slower, so they reduce my monthly payment so that less goes to the principal!

I managed to update my spreadsheet so that after every overpayment, my monthly payments are recalculated based on my current remaining term, and that means that my calculations match the bank exactly. So much more motivation when I know precisely what is going on.

Based on Michelle's advice, WE MADE A £2K OP!!! Based on my new mortgage calc spreadsheet our mortgage is now £299,500!!!!!

NO LONGER in the THREE HUNDRED THOUSANDS!!

Tropically · 13 October 2017 at 4:24PM

OMG WHAT. I cannot even believe it.

I got a letter in the post from the bank.

Saying balance £300,400.

I think I must have my calculations a month behind? Devastating news!!! It will definitely be below £300,000 after our next payment but they sure like to confuse me.

daisy_1571 · 13 October 2017 at 9:07PM

Tropically wrote: »

OMG WHAT. I cannot even believe it.

I got a letter in the post from the bank.

Saying balance £300,400.

I think I must have my calculations a month behind? Devastating news!!! It will definitely be below £300,000 after our next payment but they sure like to confuse me.

That's sooooo annoying to see it back in the 3's. It may well be your calcs are a month behind but if you rationalise the spreadsheet back to the figure in the letter then you should be square going forward ?

Yeah, they will be keeping the term the same so any overpayment will mean they have to recalculate the monthly amount so you still pay it off at the original end date.

Re the wedding I have little to add other than: don't fall out with them over this - a wedding is half a day, the important thing is you both do the actual "I do" bit and then you have the rest of your lives for the marriage which is far more important in my view. (If poss, get them to scale it back tho as what a waste of so much money when you are desperately trying to reduce in other areas, it would be sooooo much better if they kept to your small wedding and gave you the rest of the money they were happy to spend so you could use it on something more long lasting than feeding loads of people it sounds like you guys barely know. No offence, just my thoughts on weddings, it's a huge market now but a fancy-shmancy-doves-out-the-wedding-cake-carpets-matching-the-bridesmaids-eyes-day doesn't give any guarantees of future happiness, maybe a couple of conversations will bring them more round to your pov ?)

Well done on getting this far with your mortgage tropically

katiegizmo · 18 October 2017 at 12:41PM

I'm glad I found this post, we are edge of Greater London and I always feel my mortgage is huuuuuuge!!!
You sound very much like me 10 years ago, we gave the mortgage a good bashing and got a nice bunch of equity when we moved a few months ago. Now things are very different - children and no longer having two people in full time jobs means our overpayments seem tiny compared to before but I am so glad we overpaid nicely when we could. Although our mortgage feels big we are in a great position compared to how it could be.
you're doing great

Tropically · 26 October 2017 at 8:34PM

Thanks for checking in Daisy and Katie.

We made a £1000 OP yesterday! And I have worked it all out with my parents, which is great. My mum and I had a heart to heart, and I made a Whatsapp group with her and my sister (my maid of honour and only bridesmaid). It's helpful to share quick thoughts and silly messages. Our friend made our invitations as well, so we just needed to print them, and they cost £40! Woo!! We are picking my dress just after Christmas, so I might not be able to eat to my hearts content on the 28th. Christmas Day and Boxing Day are uncontested!! My parents really see it as a day of coming together and celebration so they would not be persuaded if I wanted to spend it on something else!

Participated in some market research yesterday for £50. Or at least, I went to do so. They had overbooked the session so I got the money without doing any work!! Woo.

We still have our housemate, paying £600 per month to us. He was originally going to move out in October but now he is staying to December. He is the ideal housemate 100% so is more than welcome.

Tropically · 31 October 2017 at 9:45AM

Our shower hasn't delivered consistent hot water since we moved in. It always fluctuates between hot and cold, and there would be times when I would get caught huddled under the tap out of the stream until it got hot again. Since we have our lodger, and we had this issue, I thought I would call a boiler engineer to look at the heat exchanger and to do the safety certificate. He came last Thursday and then called me over.

He said there was a hole in the heat exchanger, and he pointed to a droplet of water. He said that he had to isolate the boiler and turn off our heating and hot water. He needed to order the part, but of course it's an unusual part and it would not arrive until today. My boyfriend is home now, hopefully it gets fixed. He warned me that this would happen, and that it's impossible for a boiler bill to be less than £500. This will be £700 all in. Thank goodness for the emergency fund!!

I have been having cold showers, while crying, each day since. As I am a MSE, not having heating has been fine - we haven't turned it on yet. But those cold showers... ick.... To cheer myself up, I have been getting a posh coffee in the morning. Hopefully tonight when I get home I can have a 3 minute shower with hot water non-stop.

I had a major mystery shopping win. I was given an allowance of £150 to go review a party!!! How incredible is that! Go to a party - have a brilliant time - have everything paid for!! There was an alcohol limit, so didn't manage to even spend up to the £150.
I also got a raise! A likkle raise, but still appreciated. It will be about £100 per month.

Tropically · 31 October 2017 at 7:50PM

I said F-it and OP'd another £772 to meet my MFW 2017 goal!

Got a letter today dated 26 October which says that we are down to £299434.14!!

SWSEGirl · 1 November 2017 at 10:28AM

Congratulations on being under £300k - what an achievement! We're a way behind you, but can't wait to be in the 200's, it feels so much less scary!

Also - an extra £100 a month will really help, I always think of those raises as my travel being paid or the Christmas bill being covered - it all adds up!

Really enjoying your thread.

chelseablue · 1 November 2017 at 10:30AM

Yay well done!

We're currently at £220,000 so first mini goal is getting under 200k, but cant really overpay until 2019 when wedding, car purchase and holiday to Australia are done.

Getting rid of a London-sized Mortgage

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