Ben G
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Registered: 12th Jan 07
Location: Essex
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quote:
Originally posted by Ian
You know what I find funny, most people when offered the mortgage for 25 at that price say no I want lower payments.
Everyone had the option to get a 15/20/25yr deal and I bet the majority of people turned it down as inflexible and expensive.
same as colin, had a lot less money coming in back then and a lot of bills to pay. now i have excess cash and keep spending it on shite.
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Ian
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Registered: 28th Aug 99
Location: Liverpool
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It's not whether you'll miss it, it's whether you'll either not pay £97 off something of higher interest or whether you'll borrow to buy things with the £97.
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Ben G
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Registered: 12th Jan 07
Location: Essex
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i plan on getting a loan for a car in the near future so i have to plan that into things also.
in colins situation earning what he does on the rigs, i would overpay as much as i could without needing to cut back on having a life.
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Ian
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Registered: 28th Aug 99
Location: Liverpool
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Doesn't matter what you're earning or not, the maths is still the same, you should only do it if you're not borrowing the £97 (for example) elsewhere.
Whether that is because it's not paid off other stuff or whether you go in to o/d for a night out or something.
If not and it's just sitting there doing nothing then yes, get it spent on the mortgage.
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Colin
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Registered: 4th Apr 02
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Put it this way if I dont put £xxx towards something constructive (paying my home off!) then i'll just end up taking said loan to buy some daft car I dont really need!! So i'd be better committing it toward something sensible. If I see that chunk of cash gone each month then i'll not have the enthusiasm to spend it unwisely.
I'll get my 911 when im 40 & have no monthly bills 
[Edited on 09-11-2011 by Colin]
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Ian
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Registered: 28th Aug 99
Location: Liverpool
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Sounds nice if you can stick to it!
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Rob_Corsa
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Registered: 4th Apr 02
Location: Derbyshire
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I'm with the Nationwide and they let you pay off £500/month without incurring any early repayment fee's. 3 Years ago I had a play with one of those mortgage overpayment calculators like yourself and realised how much I could save and how much quicker my mortgage would be paid off. I've Paid an extra £500/month ever since and now only have 2.5 years to go. Thankfully i've also just exited from the 5 years fixed rate of 5.18% to their BMR which is currently 2.5% so paying half the interest I was previously.
If you can afford it i'd go for it, I decided to get a cheap motor for a few years to make things easlier financially until i'd shrunk the mortgage somewhat.
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Colin
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Registered: 4th Apr 02
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Oft well done, must be a great feeling getting the mortgage statements in seeing it getting munched away!! 
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Aaron
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Registered: 9th Aug 04
Location: Cottingham, East Riding
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It looks like this thread has ran its course, but, here's my two cents.
Over paying on your mortgage is great, however, as others have stated, your money is tied up in the property.
Here's what i did:
I looked into the idea of over paying my mortgage, in order to pay it off asap. However, i'm one of these people who thinks too much, and therefore worried about the prospect of being laid off from my job etc, so, i wanted/needed to know that i had savings to fall back on.
Anyway, i saved and saved and saved my money, then, made a number of HUGE down payments on my mortgage...and, here i am. This way, i had the money there if/when i needed it.
My theory of course depends on the value of your property (£80k in my case), and your wage.
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Ian
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Registered: 28th Aug 99
Location: Liverpool
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With regards tieing the money up, most lenders will offer the facility to borrow back.
With mine I can arrange to extend it and they take a fee of £150. Done that in the past for the car, mortgage was ticking over nicely slightly overpaid but I was able to buy the car at 4% plus that fee on the day. Cheap loan and comparable in flexibility to having the money sitting there in a savings account, except that in the period prior to borrowing back, I was slightly better off because the mortgage was lower.
With the completely flexible approach - ie. keeping hold of your money and doing a lump sum, your savings typically aren't earning as much as the interest on the debt, although if the difference is less than £150 you're still up.
[Edited on 09-11-2011 by Ian]
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Colin
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Registered: 4th Apr 02
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Another option however you wont get the benefits month on month of overpaying frequently.
I think maybe a one account would be better than a short fixed term regarding job security etc.
I owe around 120k which is roughly 2x my annual salary.
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baza31
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Registered: 19th Apr 03
Location: yorkshire
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101k interest jeeeeze I couldn't bear to think that. When people say they paid x amount for house if the actually counted what payments they made I think they would be quite shocked
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Colin
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Registered: 4th Apr 02
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Tell me about it, got it here in front of me £2.06 paid back for every £1 borrowed 
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Ian
Site Administrator
Registered: 28th Aug 99
Location: Liverpool
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That must have been on your original paperwork somewhere, it's an FSA requirement I think
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Ben G
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Registered: 12th Jan 07
Location: Essex
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Mine is 156k mortgage, 297k total repayment
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Ian
Site Administrator
Registered: 28th Aug 99
Location: Liverpool
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Mine is £116k and if the BOE rate stays the same I'll pay back £132k
Tracker taken out prior to a recession FTW. 
Obviously if it goes up I'm screwed but for the moment, wooooo
Interest only £105.37pm spend more on fuelling the Disco.
[Edited on 09-11-2011 by Ian]
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Ojc
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Registered: 14th Nov 00
Location: Reading: Drives : Clio 197
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quote:
Originally posted by Ben G
Mine is 156k mortgage, 297k total repayment
Fuck a duck
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Jules S
Premium Member
Registered: 24th Dec 03
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quote:
Originally posted by Ian
With regards tieing the money up, most lenders will offer the facility to borrow back.
With mine I can arrange to extend it and they take a fee of £150. Done that in the past for the car, mortgage was ticking over nicely slightly overpaid but I was able to buy the car at 4% plus that fee on the day. Cheap loan and comparable in flexibility to having the money sitting there in a savings account, except that in the period prior to borrowing back, I was slightly better off because the mortgage was lower.
With the completely flexible approach - ie. keeping hold of your money and doing a lump sum, your savings typically aren't earning as much as the interest on the debt, although if the difference is less than £150 you're still up.
[Edited on 09-11-2011 by Ian]
Quite frankly, IME this is something that is a bloody nightmare.
You know full well doing something about over payments is a good thing, but actually 'doing' it is a daunting prospect.
It's a shame you cant reference previous posts while posting (cough - Ian)
Having done the same, i certainly wouldn't be fixated on spending shed loads of disposable income on paying the mortgage of by the time you are 40. Kids invariably get in the way, and despite what Ian posted above IME I haven't found the banks (Santander) particularly great about re-lending you back the overpayment at an worthwhile rate.
My situation is a bit complex, but doing it again I'd be looking at a mix of payment/overpayment/savings.
If my understanding of Colins situation is correct, I'd be considering finding a rock steady woman with a house and renting mine out
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Ian
Site Administrator
Registered: 28th Aug 99
Location: Liverpool
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Yeah I was referring only to my case where I got one I can draw back on, I know that isn't available with every product.
They also need to value the house in a lot of cases, you are right in can get a bit more involved.
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Robbo
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Registered: 6th Aug 02
Location: London
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quote:
Originally posted by Colin
Im 29 now I reckon the target is to be mortgage free by 40
mortgage free at 30 
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stuartmitchell
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Registered: 24th Apr 04
Location: Kirkliston, Edinburgh
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Is there any tax implications for overpaying x amount in a tax year?
I put a lump sum into my penion every year but may just pay off more of the mortgage?
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VrsTurbo
Premium Member
Registered: 8th Jun 10
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quote:
Originally posted by stuartmitchell
Is there any tax implications for overpaying x amount in a tax year?
I put a lump sum into my penion every year but may just pay off more of the mortgage?
why would there be? as long as your fully employed you have already done your tax bits. if your self employed you can just take it from profits.
[Edited on 10-11-2011 by VrsTurbo]
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stuartmitchell
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Registered: 24th Apr 04
Location: Kirkliston, Edinburgh
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Thanks for the reply, thats what I thought too but wanted to double check. I recall that when getting my mortage sorted the advisor said there may be tax implications of overpaying.
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James
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Registered: 1st Jun 02
Location: Surrey
User status: Offline
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quote:
Originally posted by Colin
Im 29 now I reckon the target is to be mortgage free by 40
CS income police will be all over this like cheese on toast.
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Robbo
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Registered: 6th Aug 02
Location: London
User status: Offline
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quote:
Originally posted by stuartmitchell
Is there any tax implications for overpaying x amount in a tax year?
I put a lump sum into my penion every year but may just pay off more of the mortgage?
no
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