Mortgage Round up for the year!

Gosh, I can’t believe that it has been another year in mortgage world! Received our years breakdown and I do like the look of what progress we have made in this time. Overpayments have varied, as life is never straight forward but overall we are seeing big reductions in the mortgage especially compared to when we first got this mortgage- the interest made up 3/4 of the monthly payment, my goodness that was a painful time!

In December I wrote a post about my plans for the mortgage, including projections on how OPs will shape it. As of the 1st August 2020 the mortgage stood at £147,254. The projection I made in December 2019, based on moneysavingexpert’s mortgage overpayment calculator, was – £147,459 by December 2020. So I am very very pleased to see that the OPs previously made meant we hit that 4months early!

So here is what we have achieved this past year:

£10,201.76 has been paid to the mortgage

£3,193.04 of which was in interest

£7,008.72 of which was capital

Based on the current mortgage balance and rate, another year with no OPs will see our mortgage stand at: £142,607 in August 2021. As it stands, we are still making a small OP of £50, this still makes a noticeable difference long term. We will pay the mortgage off 2years and 2months earlier, saving £4352 over the lifetime of the mortgage. In a year the mortgage would be: £142,001 knocking 601 pounds off the morgage in a year. That doesn’t sound as good as when we paid more, but it is better than nothing and over time makes a big difference. And you never know, we might be able to increase those payments again soon! 🙂

March Money Madness

I just wanted to use some alliteration there 🙂 It hasn’t been too mad.

I haven’t been able to logon to Tesco since December, very annoying, I try randomly and with everything going on in the world, am not going to ring up to check, presuming it is all linked to being moved over to Halifax. Hubby and I have been discussing stopping the overpayment with the current climate, including the uncertainty and fear around his job. Though as we are both earning this month, we decided that April should have the £250 OP still and we will play it by ear from there. We are hoping we can carry on as ‘normal’ if nothing changes financially.

I have made a guess that our mortgage should be around: £150,675 if I have paid £600 capital off a month, which I had paid previously when overpaying £250. I am happy with this, wish I knew precisely, but whatever!

We had to take a chicken to the vets and paid £56 for antibiotics and the consultation, sadly, despite treatment beautiful Echo passed away. We syringed her water and the antibiotic but she didnt make it. Blue, who was the first poorly one, got better really quick and is doing great, now Charlie is poorly. The vet wasn’t concerned it was anything contagious to other animals which is a relief and we are treating them all with antibiotics now. Today I will be collecting the dogs prescription then getting them filled, this will be an expensive day! Completely worth it though. £56 for the anti inflamatories and Desmopressin prescription, a further £123 for the prescription to be filled. Need to explore if we can get this cheaper somewhere else, plus they never have 90tablets in so I will have to go back again to collect the rest. What a pain in lockdown, plus I am working 12 hour shifts. Hopefully hubby might be able to go.

Hubby got a chimney sweep in- £70, he (hubby) has capped the chimney pots as birds then tried to nest in the clean chimneys! Got the caps for free, and some stone for the hearth for free. Paid for the fireboard which he has now installed. Unsure of the cost for this! Our current flue is too short, hubby’s dad left his spare outside their house, so when hubby was out with work he could collect it and not break any lockdown laws! This might mean that we can get the fire up and running! We are having issues with the underfloor heating, we think the boiler needs an expansion tank or something, can’t do anything in this situation though, plus the house is still heating just not well.

The shower downstairs has loose tiles which have been letting water in, so hubby has taken them off, this is another job that will need doing. We have been discussing re-doing the upstairs bathroom, getting rid of the downstairs shower and making a small utility area there instead. Luckily, even though the upstairs shower is crappy compared to downstairs, it is water tight and usable. The concrete floor in the lounge is loose in parts, so need to investigate this at some point. Possibly ouchies to the wallet all round!

This month we also paid hubby back what was owed from Florida, and have only had to pay for gas once. I have moved money across which includes £250 holiday, £150 that Aran had been paying on the old credit card that we have paid off, and then paid himself back with and finally £82 that we have saved by cancelling items during uber frugal jan! So we are moving money, the key is to keep it! Or keep saving to pay for all these things we keep finding wrong!haha. After all the bills go out tomorrow I will do a tilly tidy and work out whats left and what we may need to spend for the month.

In April, we may need two lots of gas, its hard to plan in advance as we don’t know what the weather will do! Got away with only one order in March, so we are probably very close to a new order! We will need to buy more raw dog food and treats, about £40 which lasts over a month, Council Tax will be going out again, boo!

Hoping April will bring the peak and decline of covid19, and some semblance of normality will begin to come back. I hope you and yours all safe 🙂

2020 Mortgage Goals

I have upped the overpayment back to £250, we should have enough for New York and that was the only big expense left really, therefore back to overpaying the full amount we can afford!

According to Money Saving Expert’s mortgage calculator, based on our current mortgage of £152,475 with 24years to run, we will pay £39,227 in interest over the remainder of the mortgage. By the end of 2020, our mortgage would stand at: £147,459 and we would be mortgage free by 2044.

It is good to know, so I can play with the overpayment calculator and find out what the overpayments will do!

So, with our regular overpayment of £250 a month, starting on January 1st 2020, we would pay £25,966 in interest, saving £13,261. We would be at £144,432 by the end of 2020, this would be paid off in 16 years- 2036. This seems like a great achievement long term!

Though I would like to have paid off 10k, you know, just to round this off nicely!

So I added 2k as a one off overpayment in December 2020, it would save us an extra £700 over the life of the mortgage, end date would be 2035, a year earlier.

And out of curiosity, I added a one off payment of £4500, this would take us into the 140’s at the end of 2020. We would pay off the mortgage in 15 years, same as the 2k one off payment though would be saving an extra £1610 in interest!

In reality, I think that the 2k may be managable, the 4500 not so much, maybe if all we did was overpay it might work but we have other things to save and do next year! Hubby is happy with the £250 overpayments, so I would have to see about anything extra!

October Mortgage Roundup


October Mortgage Stats:

Was: £153,817
Now: £153,420
Monthly Payment: £666.72 + £50
Capital Paid: £397
Interest: £319.72

Another month, and it is good to see that even with a reduction in overpayment, the money is still going down!

Mortgage Overpayments, Take 1001

So, the title is an exageration! I have played with overpayments many times since getting a mortgage for the first time in June 2011, but I wouldn’t hit the 100’s let alone 1000’s really…

After my last post, I was inspired to talk with the husband about re-starting the overpayments on the mortgage. We stopped as we bought a car on finance- good apr though- and we have been doing things to the house- had a patio outside the back and have saved for the driveway to be done at the front- and now, even though we have some holibobs coming up, I have noticed we should be able to spend an extra £250.28 a month on the mortgage without it having a huge impact on other things.

Bearing this in mind, I have today, increased our payments by £250.28! Taking us to £917 a month in payments, I can stop these at any time should I need to and even if I only manage to overpay a month it will still save a good amount ultimately!

So, with the overpayment we should be able to pay the mortgage of in 17 years- this still feels too long right now- I will be 48 and hubby will be 49. This is great progress really, but the problem with overpaying and looking into mortgages, is that it opens your eyes to the real cost of a mortgage,the interest is truely shocking!

I am looking forward to seeing what my wage will be in May, I have started a new job and this is 36hours a week so less unstable than working agency, plus I get paid my holidays! Hooray!

Looking forward to seeing the mortgage on May 1st….

Overpaying the Mortgage

Today I am playing with the Overpayment (OP) calculator on Money Saving Expert- I love doing this, its amazing how even a tiny OP can make a huge difference to the mortgage!

We currently pay £666.72- I like the 666 number, shame the pennies weren’t 00!

If I were to increase our monthly OPs by £333.28, for example, taking us to £1000 a month, we would save £19,964 in interest over the term of the mortgage, and we would pay the mortgage off 10years and three months earlier. Thats amazing! It would also be a lot of money extra to find to throw at the mortgage…

Even rounding the amount up to £700 a month- £3.28- would see us save £337 in interest and we would pay the mortgage off two months early, this would still be fantastic in the long run! Every penny really does count, and this is based on our fixed rate and the current base rate so this would fluctuate.

I *think* that we might be able to afford to OP 250.28 a month- the 28p is to round it to a whole number, sad I know! Hubby may not agree with this though!Haha. If we were to OP that amount, it would save us £16,742 in interest and we would knock 8 years and 7 months off the mortgage.

Playing with the calculator is addictive, I totally recommend anyone who is considering overpaying has a look at this, it really shows that every penny/pound counts when paying down the mortgage.

My aim is too have a good discussion with hubby and see if he agrees we could start OP the mortgage again, as we used to!

Below is the links to the basic mortgage calculator and the overpayment calculator:

https://www.moneysavingexpert.com/mortgages/mortgage-rate-calculator/

https://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator

Some ways I have been working towards Mortgage Freedom and things I have noticed!

Just a reminder, I am a Nurse, and in no way should what I say/do be taken as proper advice, I am merely sharing my novice ways of heading towards mortgage freedom! Any financial choices should not be based on my ramblings!

Always look at debts as a whole- if you have expensive debts, the advice would be to pay these off first. For us, the most expensive debt we have is the mortgage. We do have a loan, which is 4%, but this has set interest and we will pay the same amount regardless of how soon we pay it off! The mortgage is at 2.99% and our credit cards are all 0%- we TART our cards to ensure we dont pay any interest on them. This has been working well for us, we currently have a 0% spends card and a 0% balance transfers card. We make note of when these run out to ensure that we don’t get charged interest!

Martin Lewis from MSE (Money Saving Expert), points out that if you can get more from savings than OP (Over Paying) the mortgage, then that would make sense. For some people being MF (Mortgage Free) is the overriding desire- but bear this in mind, your money may work better in other ways. We are saving in a 1.5% current account and have a 5% savings account, there is a cap on this for £250 a month and we can’t touch this for a year to get the interest. As it stands, the mortgage rate is now much better for us, our first mortgage was over 5%! So some savings accounts are better than OP now.

OP my morgage helped when remortgaging, for example, I was able to get a better rate once I hit 10% comparative to 5%LTV. This is the same with other key LTV points, namely 90%, 75% and 60%, though when we most recently remortgaged and hit 80% and this made a big difference to us!

We are only able to OP 10% of our mortgage a year this has always been the case- there isn’t any chance we will reach 10% in a year currently. But as the mortgage decreases, 10% wont be as much, so maybe one day this could be an issue! For our first mortgage, we kept the term as long as possible as it was more affordable, then chucked OPs at the mortgage on top of this. Meaning the outcome is similar to a reduction in years, but we had flexibility with regards to our standard monthly payment being affordable. For our latest remortgage, we could afford the payments over 26years, shaving years off the mortgage. We then plan to OP on top of this when possible.

We have had a great mortgage advisor. I look on Money Saving Expert as well to see the kind of costs we would be looking at, and she always gets us a great deal. Having an expert you can trust is definately helpful, she was very impressed at how much we had taken off the mortgage! The second time we remortgaged, we did it by ourselves with the same bank- the deal was fine and incured no fees. When we were looking at remortgaging with another bank and a different term, I let Fiona lead the way!

When we first got our big mortgage, paying it down was the most important thing. I knew in the long run we would thank ourselves for two years of frugality in other areas when we could remortgage and the house would be a lot more affordable. Now, in theory, we can afford the house and bills with one wage, which is reassuring! I have been reading about mortgage neutrality recently, but we have other things to save for and do now, so OP the mortgage when we can fits better these days!

Remember, with OP, every penny/pound counts! For every pound borrowed we pay £1.51 back therefore everytime you pay off an extra £1, you save 51p in the future! That’s a motivating thought! A diary on MSE introduced me to Tilly Tidies- namely someone called Tilly, started to skim down their accounts. Rounding down to a whole number, what was skimmed was then OP or sent to a savings account to build up to be OPayed! This is something I am doing now as I have to save £1000 before I can send an OP, I am also considering setting up a regular overpayment again… get itchy not seeing any extra change to the mortgage!

WARNING- Mortgage overpayments can be seriously addictive and cause others in your lifes eyes to glaze over! Find other like minded folk to share with 🙂

MFW Part 2

Just to recap, horrified by the mortgage repayments for the new house, I planned to OP to get us to 10% LTV in two years when we would be able to remortgage. Without OPs, we would only be taking £163 off the capital a month, despite the £930 a month cost, ouch! We initially set up a £70 a month OP, but I realised this would still not be enough to be on target. I increased our OPs to £170 a month and threw anything else I could at it, this looked like it should just get us on target, I focused only on OPing on the mortgage and we cracked down on other spending to cover this!

On the 12th August 2015 I did a reality check to compare where we were vs where we would have been had we not been OP the mortgage:

Year one balance if no OPs made: £183,251 as of the 1st July 2015 balance: £180,404.24, a £2486.76 difference and not even at the year mark! Our original mortgage end date was 2049 and on the current trajectory would be 2033. The original expected interest costs: £207,475, based on new trajectory: £103,871

Obviously, the above figures are speculative based on fixed rate and estimated rates after that ends, but it does go to show how OPing makes a massive difference to the mortgage in the long term!

We hit our target of owning 10% of the mortgage on the 1st February 2016, I was so happy with this! Because of this, we were able to remortgage on August 1st 2016 with a rate of 2.98%, meaning that the payment was £685.87 a month, rather than £930! Massive win!

The next goal was to own 20% LTV of our home in two years, ready for the next remortgage! The difficulty at this time, was that we needed to focus on getting work done on the house, such as a large patio we had put in and buying a eco car on finance- got a very good loan rate! So our OPs steadily stopped over that time as we focused on other things. Last year, we went to see our mortgage adviser, she estimated our mortgage would be around the £170k mark, I was very pleased to show it was pretty much £160k! The house was valued at £210, this gave us exactly what we needed to lock into our current mortgage, we have locked in for five years as we knew I would be doing agency work which would possibly effect our desireability and eligibility.

Our mortgage information as it stands:

5 year mortgage with Tesco, at 2.11%, monthly payments: £666.72, current balance: £158,003, we reduced the term, our original mortgage was for 32 years, and this one is over 26years, hence the monthly amount remaining around the same as previous!

Focus on becoming mortgage free has been almost on hold, only one OP has been made with new mortgage- I was given the account number etc and sent over £60, then was told I had to send over minimum payments of £1k or set up a regular overpayment. Due to other things that are going on, I figured I will try to save up toward the £1k and not let this part of the journey slide, as actually, not having a mortgage would allow much more funds for saving and collecting for the future!

MFW Part 1

After all the hassle of selling our previous house and getting everything ready to buy our current home, I was horrified at how much the monthly cost of our mortgage was! Any money from selling our first home went on paying a 5%, YES, 5% deposit on the new house and all the associated costs of moving. We used a service whose name I cannot remember, where you say how much stuff you need moving and people with vans quote how much they will do it for. We paid £400 for our entire lives to be moved and did other bits ourselves! Bargain!

Initial Mortgage £185,250 over 35 years with 5% deposit of £9750, MF date 2049 (£195,000) this equates to £930 in repayments a month. The APR was 4.99%, ouch!

I found the Mortgage Free Wannabe (MFW) boards on Money Saving Expert (MSE), I loved reading others diaries and exploring different concepts, such as how even the smallest overpayment (OP) could make a huge difference in the longevity of the mortgage, and ergo how much interest we would pay over the length of the mortgage! I was acutely aware that buying this home on 5% deposit, with what seemed like a high interest rate and very high to us monthly payments was a massive risk, but it felt so worth it! This home is the dream home (in our price range!haha).

So, discovering MFW and starting a diary I started to wonder, what OPs we could make, on discussion we agreed we could afford to increase the monthly payment to £1000. An OP of £70 a month, I did this almost straight away and that £70 was taken on our first payment day. Honestly, it is addictive to look on OP calculators! I will add the link for MSE:

https://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator

Disclaimer!! Now, I have already said I am a Nurse, I am in no way a financial expert, more an interested novice! There are many things you could be doing instead of OP on a mortgage, eg, ensure any debts are on 0% if possible, OP on more expensive debts, put OP funds into a higher interest saving account than your mortgage etc. This is just what I chose to do! We had £1200 on a credit card, which was 0% and saving rates were pretty poor at that time!

The initial goal was very quickly established, reach 10% LTV by the time the current fixed rate mortgage ended to aim for a better % when we re-mortgaged. I quickly, and slightly depresingly calculated that without any OPs we took off a measly £163 off the capital every month, meaning that the rest was interest- £767. In the next post, I will bore you all some more with OPs, goals and all that jazz!