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Page 7
  • Cupcakesjo
    Interest only mortgage
    Hi, can anyone help, we have an interest only mortgage and I want to know if I can make over payments and is it worth doing, we have 172k and 15 yrs left to pay. Thanks
    • edinburgher
    • By edinburgher 20th Apr 15, 10:44 PM
    • 11,076 Posts
    • 59,399 Thanks
    Hi, can anyone help, we have an interest only mortgage and I want to know if I can make over payments and is it worth doing, we have 172k and 15 yrs left to pay. Thanks
    Originally posted by Cupcakesjo
    Check your mortgage T&Cs re. can you overpay. Re. is it worth it - what is your mortgage interest rate and are you a basic or higher rate tax payer?
    • Lee252
    • By Lee252 9th Jun 15, 6:33 PM
    • 3 Posts
    • 0 Thanks
    Confused - with choices

    We are looking at overpaying the mortgage with a plan of remortgaging after we have completed a extension and paid off up to 15,000 before we remortgage.
    Below are the choices that we have, any good advice.

    Pay off your mortgage earlier by reducing your mortgage term. (This option is only available if you have a capital and interest repayment mortgage)

    - Reduce your future monthly repayments

    - Keep your existing payment and term 'as is'. At the next natural mortgage payment change; for instance an interest rate change, your repayment will be automatically recalculated.
  • AineC
    I have read a lot of the posts under this heading, but cannot find one that is similar to my own, so here goes and thank you to anyone who replies!
    I have 9 years left on my mortgage - 4.99% - and am facing a sizeable cut in pay next year, which is making me nervous i.e. mortgage and life insurance (on mortgage) monthly payments. I have a bond coming up in October and that would pay off the mortgage, which carries over 3000 early repayment penalty (Leeds Building Society/shame on you!), with a few thousand left to put into an ISA. Over the 9 years left on the mortgage, if my calculations are correct, even with that hefty repayment, I would still be 10K ahead, based on what the money would earn in savings versus paying off the mortgage.
    At first, this seemed like a no brainer, getting rid of the monthly burden AND the long term savings, but I am nervous about using most of my 'at hand' savings in case the pay cut means having to dip into savings. I feel as if I'm missing something here!
    Any thoughts fellow members?
  • jbrenc
    Hello! Since taking out my mortgage just over a year ago I am lucky enough to have received a pay rise and I can afford quite a bit more each month, I'm struggling to figure out the maths though to decide on the best course of action:

    - Mortgage = 4.6% fixed rate until May 2017- approx 70k to pay, 25 year term taken out in May 2014
    - I currently pay 447.61 per month
    - I have an ISA which pays 1.4% interest
    - I can make over-payments of up to 999 per month without penalty however they do not have any affect until the mortgage is recalculated every February
    - I can make capital repayments of 1000 or more but pay a penalty of 3% until May 2016 then 2% until May 2017
    - At the end of each month I typically have at least 500 leftover (sometimes up to 8/900).

    What I am trying to work out is, is it better for me to:
    - Put any left over amounts in my ISA each month, earn the interest, then each January pay whatever is in there off my mortgage, knowing there is a fee.
    - Pay any left over amounts as overpayments on my mortgage but know they will not affect my mortgage interest but also know that I have not paid a fee (I guess I should consider the lost ISA interest of 1.4% as my fee)
    - Something else? I have read about reducing the term of the mortgage but this seems to be discouraged in the article? I guess the downside here is that I am locked into a payment which could be problematic when my fixed term ends and interest rates may have increased, plus I wouldn't have the option to use the money to save for a holiday or something else if I choose one month.

    Thanks for any help - I want to get it right as it seems to have the potential to save big money over the course of the mortgage!

  • barry mac
    Interest only v Repayment
    I would like to make overpayments to my mortgage but am confused as to which would be of most benefit! My mortgage is made up of 2 parts - Interest only - 41800 - 2.79% Fixed and
    Repayment - 15955 - 2.79% Fixed
    I have 10 years left to repay the loans and can afford to over pay 100 a month.
    I am really really confused and would gratefully appreciate any advice! Many thanks!
    • ViolaLass
    • By ViolaLass 3rd Sep 15, 5:47 PM
    • 5,303 Posts
    • 7,336 Thanks
    Do you have a plan for paying off the interst only part? If not, sensible to tackle it.
    • diamonds
    • By diamonds 8th Dec 15, 1:02 AM
    • 5,987 Posts
    • 1,603 Thanks
    Having me new DEBT FREE status (and badge MSE! thanks ) I would just like to say to others about is a (working) lifetime debt for the most part and well given the current climate savings are best for now.

    Secondly, if you like most people want to leave your kids something let it not be a physical asset, let it be time, love, support and financial and food prep education because with these things your kids will flourish in life for themselves - it is more important to have these things than a bought house over time, love and financial education etc.

    If you can downgrade house size or move to rented property and downgrade your work hours to a work/life balance for your kids DO IT! or at least like debt reduction, start now, being debt free is one thing and that includes a mortgage. It pays more to ethic to childmind your grandkids and ensure you & your kids have a work/life balance than anything, corporations are not there for you as a priority as a employee nor as your creditor.

    I'm going all out to buy a cheap apartment OUTRIGHT in Spain in 2016 for the future to remain debt free for life, the pound is too strong a currency to work too hard in life at the expense of time with those you love.

    Enrich yourself/yourselves, not corporations - humanity - we got this far looking after each other until the late 1800's when commercialism became priority over loved ones.

    Is a mortgage and assets to leave your adult kids really that important over regret/s or are we sold on corporation$ advantage$.

    Keep swimming Nemo's

    Last edited by diamonds; 08-12-2015 at 1:08 AM.
    SO... now England its the Scots turn to say dont leave the UK, stay in Europe with us in the UK, dont let the tories fool you like they did us with empty lies... You will be leaving the UK aswell as Europe
    • gzoom
    • By gzoom 8th Dec 15, 3:29 PM
    • 241 Posts
    • 229 Thanks
    Enrich yourself/yourselves, not corporations
    Originally posted by diamonds
    We're expecting our first child next year, and my view points on debut - mortgage debut in particular is starting to come round to echo what your saying.

    My parents are fanatical about saving, they worked hard all their lives, and have now retired. But after a life long habit of saving, they just break the mould of detaching away from life experiences. No matter how many times I tell them I don't need a single of inherence, all they still want to do is save up their pension.....what for, I'm not sure. Having a massive lump of saving when death is banning on the door isn't going to make anyone feel more comfortable.

    Similarly up-untill recently we've been obsessives about paying off the mortgage, and now we are in a position to do it....But than I realise, what's the point?? Our mortgage is small, but regardless, is there to enable to you to enjoy life, provide for your family. As long as your monthly out-goings isn't more than your income, who really cares....

    Ofcourse part of my newly found thought process is to enable us to justify spending 50K on a car rather than clearing the mortgage
    • Jonnypilgrim
    • By Jonnypilgrim 25th Apr 16, 9:24 PM
    • 1 Posts
    • 0 Thanks
    Hi, I'm 55 years old, having taken out a 120k repayment mortgage with my partner 4 years ago with the Nat West on a 5 year fixed deal at 3.79% interest. Our property is currently valued approx 250k. We have been making over payments on top of the monthly payments and owe 96k. I have various pension pots worth about 220k and am wondering whether it's worth drawing down 25% of my pensions to pay off part of the outstanding mortgage next April when the early repayment penalty of 960 ends. The reason why we are considering this is because I'm currently earning a good salary and a higher tax band payer but my job is not looking secure and I'm unlikely to be able to earn as much as I do now if I have to change jobs. We do not have any other debts.

    Any advice will be greatly appreciated.
    • adon30
    • By adon30 25th Apr 16, 11:42 PM
    • 179 Posts
    • 54 Thanks
    Mortgage or savings
    Last edited by adon30; 27-04-2016 at 8:06 AM. Reason: No one answered post
    • gcoops
    • By gcoops 22nd Jun 16, 11:57 PM
    • 9 Posts
    • 2 Thanks
    Completely Pay-off my Mortgage or keep it off-set?

    Should I completely pay-off my mortgage?

    I am debt free apart from my mortgage of 110,000. This mortgage is an off-set mortgage, outside of it's fixed rate tie-in period and is now at a variable rate of 3.27%

    Earlier this year I was made redundant from my job that paid 60,000 a year. I received a post-tax lump sum of 70,000. I already had in my off-set account 40,000, so my savings now completely off-set the mortgage debt.

    In addition to the off-set savings I have 15,000 in my current account.

    I am now self-employed (as a limited company), so future finance is a little uncertain. My wife has a regular income of 18,000.

    We also jointly own 2 buy-to-let properties. These are both on interest only mortgages (126,000 & 100,000). From these we currently make about 10,000 a year but expect this to go down with the new taxation.

    So, should I pay-off my mortgage completely? Or because I am off-setting the full amount with savings and hence paying no interest should I just keep the money in the bank, making my repayments to reduce the capital, so keeping the money there in the event I may need it - for example if my new business doesn't go so well?

    It would be nice to have no mortgage and no monthly mortgage payments but it's also reassuring that I have the money for when times are tough.

    All advice greatly appreciated.

    • wildenglish
    • By wildenglish 31st Aug 16, 8:51 AM
    • 1 Posts
    • 1 Thanks
    Value of mortgage outstanding
    Hi there,
    Not sure if i am being really thick but in terms of the calculator you provide should it not have some factor for the value of the outstanding mortgage? It's all very well saying if my savings interest rate is x on 10,000 and my mortgage rate is y on 10,000 then I would be better off continuing to save.
    However in reality people's savings may be in the 10s of thousands but their mortgage will probably be in the 100s of thousands, bearing in mind then the additional impact the mortgage interest rate will have on a significantly higher sum, are you not better to pay off the mortgage if your outstanding balance is significantly higher than your savings? Even potentially if the savings rate is a little higher but on a much smaller sum?
    • cheekymonkeynotts
    • By cheekymonkeynotts 3rd Oct 16, 2:08 PM
    • 11 Posts
    • 1 Thanks
    Mortgage Debt 80k
    I have a mortgage on a rented property which is making some profit each month.
    The interest rate is 2.64%

    I have 22 years left on the mortgage, i haven't overpaid.

    Shall i use the profits each month to overpay mortgage to make it come down even quicker?
    • hildosaver
    • By hildosaver 3rd Oct 16, 2:54 PM
    • 296 Posts
    • 432 Thanks
    I have a mortgage on a rented property which is making some profit each month.
    The interest rate is 2.64%

    I have 22 years left on the mortgage, i haven't overpaid.

    Shall i use the profits each month to overpay mortgage to make it come down even quicker?
    Originally posted by cheekymonkeynotts

    Hello - is it an interest only mortgage or repayment?

    If it's interest only then you need to think about what you plan to do with the property long-term (also be aware of the tax changes coming in the next couple of years which may eat into any profits you have). You will need to find either the total mortgage amount after 22 years or be in a position to sell the property.

    If it is repayment then it's more about your own financial situation - do you have savings? Can you get a better return elsewhere?
    Mortgage balance September 2012: 121,086 (First ever OP)
    Mortgage balance March 2018: 77,650
    • cheekymonkeynotts
    • By cheekymonkeynotts 4th Oct 16, 4:47 PM
    • 11 Posts
    • 1 Thanks
    Its a repayment Hildosaver.
    I haven't declared it as such to hmrc as its main residence *naughty i know*

    Yes i have savings, premium bonds/ISA. No real pension hence why i decided to get the property.

    I just don't like having debt & paying bank all the extra interest.
    • Thrugelmir
    • By Thrugelmir 4th Oct 16, 4:57 PM
    • 58,201 Posts
    • 51,574 Thanks
    Its a repayment Hildosaver.
    I haven't declared it as such to hmrc as its main residence *naughty i know*
    Originally posted by cheekymonkeynotts
    You may not be laughing if they do catch up with you.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • cheekymonkeynotts
    • By cheekymonkeynotts 4th Oct 16, 4:59 PM
    • 11 Posts
    • 1 Thanks
    Fingers crossed
    • jackie1975
    • By jackie1975 22nd Mar 17, 4:14 PM
    • 1 Posts
    • 0 Thanks
    whats the best way of saving money on my morgage?
    I have a fixed capital and repayment morgage of 3.5% and have 11 years term still remaining. I now owe 47000 and pay 428 per month. What is the best way to save money and how much can i save? Many thanks for any advice
    • bob808
    • By bob808 3rd Jun 17, 12:28 PM
    • 4 Posts
    • 0 Thanks
    Should I keep a small balance on my mortgage
    It's likely we shall be in a position to pay off my mortgage this month.
    Would it be worth considering keeping a small balance on our mortgage instead? We may wish to move in a few years and may need to get a small mortgage. We're both nearly 50 so wonder whether we may find it tricky to get a new mortgage but easier with our current Mortgage co (Woolwich) if we keep a small balance on our current mortgage.
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