No hurry to pay off the mortgage
Discussion
Depends what your outgoings are.....
Expensive leased car or car loan?
Expensive Monthly Phone?
Eating out all the time?
Gym?
Buying Coffees?
Expensive Clothes?
Kids?
I spent the last 3 years averaging about £800 a month over-payment on £2,800 a month take home by not having any of the above.
Expensive leased car or car loan?
Expensive Monthly Phone?
Eating out all the time?
Gym?
Buying Coffees?
Expensive Clothes?
Kids?
I spent the last 3 years averaging about £800 a month over-payment on £2,800 a month take home by not having any of the above.
rossub said:
Depends what your outgoings are.....
Expensive leased car or car loan? - nope both owned outright
Expensive Monthly Phone? - £15 a month each
Eating out all the time? - hardly ever
Gym? - free with work
Buying Coffees? - don't drink the stuff
Expensive Clothes? - h&m is as expensive as it goes
Kids? - non
Rarely go on fancy holidays either, usually just going to see friends/family in different parts of the country
I spent the last 3 years averaging about £800 a month over-payment on £2,800 a month take home by not having any of the above.
I think I need to start logging expenses and see where it goes, help stem an leaks. I won't be quite that much but close to it so I reckon I can get about £250 a month over payment but I suppose it also depends what your standard payments are v mine. Expensive leased car or car loan? - nope both owned outright
Expensive Monthly Phone? - £15 a month each
Eating out all the time? - hardly ever
Gym? - free with work
Buying Coffees? - don't drink the stuff
Expensive Clothes? - h&m is as expensive as it goes
Kids? - non
Rarely go on fancy holidays either, usually just going to see friends/family in different parts of the country
I spent the last 3 years averaging about £800 a month over-payment on £2,800 a month take home by not having any of the above.
I think part of it is just financial anxiety, not exactly from a well off background & worry about making sure I always have more in savings but I reckon between the mrs & I we could easily pay £800 overpayment, getting rid of the mortgage asap is the aim.
Edited by bobski1 on Saturday 10th June 02:04
bobski1 said:
I think I need to start logging expenses and see where it goes, help stem an leaks. I won't be quite that much but close to it so I reckon I can get about £250 a month over payment but I suppose it also depends what your standard payments are v mine.
I think part of it is just financial anxiety, not exactly from a well off background & worry about making sure I always have more in savings but I reckon between the mrs & I we could easily pay £800 overpayment, getting rid of the mortgage asap is the aim.
To be honest, I would have expected anybody with a mortgage to already know their expenses vs income in some detail. Many of the mortgages that fail and cause debt/repossession are because people don't do proper budgeting - and then wonder where the money went.I think part of it is just financial anxiety, not exactly from a well off background & worry about making sure I always have more in savings but I reckon between the mrs & I we could easily pay £800 overpayment, getting rid of the mortgage asap is the aim.
Edited by bobski1 on Saturday 10th June 02:04
bobski1 said:
Haven't got one yet but will do in the next 12 months, plan is to get it over a 30 year term but over pay as much as possible to get it down.
Once paid off then the toys can start coming in, not sure I agree with just paying the minimum. Yes it is nice to have money now & be able to do things but with so much uncertainty going on at the moment I'd rather have the lesser life style for a while in order to have a house paid off that nobody can take.
Question for those who have paid it off so quickly, aside from earning a high salary, what tips do you have in order to pay it off quickly?
Be aware that when a mortgage is in its discount/fixed period there is usually a restriction on how much you can overpay. When mine was fixed i couldn't overpay by more than 10% of the owed amount in any year. When taking the mortgage make sure you know the terms, i seem to recall some products having a similar clause for longer than the fixed period which may not be ideal for your situation.Once paid off then the toys can start coming in, not sure I agree with just paying the minimum. Yes it is nice to have money now & be able to do things but with so much uncertainty going on at the moment I'd rather have the lesser life style for a while in order to have a house paid off that nobody can take.
Question for those who have paid it off so quickly, aside from earning a high salary, what tips do you have in order to pay it off quickly?
Edited by bobski1 on Friday 9th June 13:21
A spreadsheet was key for me aswell. When I started making overpayments, I set one out by month showing everything until 2020.
I intended paying in the full 10% a year but inevitably had to treat myself sometimes (you'll go crazy otherwise) and ended up about £10k short of my plan after 3 years because of that - however I shifted just over £40k of it in 3 years which isn't too shabby.
Plan now is to finish it in 7-8 years, which would be a total of 15-16 years.
I intended paying in the full 10% a year but inevitably had to treat myself sometimes (you'll go crazy otherwise) and ended up about £10k short of my plan after 3 years because of that - however I shifted just over £40k of it in 3 years which isn't too shabby.
Plan now is to finish it in 7-8 years, which would be a total of 15-16 years.
It does really depend on what he size of the mortgage is.
Take for example a £500k mortgage unless you have massive investmentreturns inheritance buy to let you simply cannot clear that scale of debt too quickly - even if you throw an extra £3k a month at it you'd still have a huge number of years to go.
Take for example a £500k mortgage unless you have massive investmentreturns inheritance buy to let you simply cannot clear that scale of debt too quickly - even if you throw an extra £3k a month at it you'd still have a huge number of years to go.
Welshbeef said:
It does really depend on what he size of the mortgage is.
Take for example a £500k mortgage unless you have massive investmentreturns inheritance buy to let you simply cannot clear that scale of debt too quickly - even if you throw an extra £3k a month at it you'd still have a huge number of years to go.
Starting with a £500,000 mortgage at 3.5% interest you would pay it off in 8 years overpaying by £3000 per month. Of course with a lower fixed interest it could be quicker, and if you wanted to have the odd holiday and not live on baked beans it could take longer. Take for example a £500k mortgage unless you have massive investmentreturns inheritance buy to let you simply cannot clear that scale of debt too quickly - even if you throw an extra £3k a month at it you'd still have a huge number of years to go.
Cheers,
Tony
Tony427 said:
Starting with a £500,000 mortgage at 3.5% interest you would pay it off in 8 years overpaying by £3000 per month. Of course with a lower fixed interest it could be quicker, and if you wanted to have the odd holiday and not live on baked beans it could take longer.
Cheers,
Tony
To overpay by £3k a months means @40tax rare a spare annual gross salary of >£60k to fund it. Cheers,
Tony
Clearly mathematically you've calculated it's doable but round my way a 3 bed semi is £500k+ people who own these do not have an additional £60k salary otherwise they would have bought the next step up.
Also cutting out on £3k spending a MONTH unless you use Coke & hookers or bathe in Dom P would be challenging.
I took out a 32 year mortgage last year, that'll take me up to age 70. Went for a 2 year fix at 1.4%, so the repayments are about £400/month to start with, up to about £575 when it goes onto the SVR. I only went for the 32 year term (longest available to me), to get the lowest monthly repayment - you can always overpay, but it's not so easy to underpay/payment holiday.
I have the full intention to overpay and reduce the term down as I want it cleared well before I'm 70. My mortgage allow for overpayments to the value of 10% of the balance each year, during the fixed rate. And since the initial fixed rate is quite low, I'm earning more interest putting the money into savings accounts (for now at least). That gives me the flexibility to overpay the mortgage further down the road, or use it for other things - home improvements etc.
With rates being so low at present, there doesn't appear to be much to be gained by overpaying the mortgage now. But as soon as rates go up, you want to be in a position to pay down the mortgage if at all possible. And they will go up - they can't really go down from here (unless they go negative, but then there'd be much bigger problems), but they can go up. Everyone is (or at least has been saying), that they can't see rates going up anytime soon. But they would say that, until it's too late. The paperwork for my mortgage included an example of if rates went up - they used 11% (not sure why, specifically) and that the repayments would triple, which is quite sobering. The more you can repay before/when rates go up, the more you'll shelter yourself from the rate rise.
My other 'strategy' is that I can put (extra) money into my SIPP in place of overpaying the mortgage. Whilst rates are low and the markets are doing better, I think that makes sense? As long as they don't change the rules and I can still access a lump sum before I'm 70!
On a sidenote: there are plenty of fixed rate deal about now at very low rates, but the moment that there's even a sniff of the base rate going up, the banks will pull all the long fix offers and put up the rates substantially on what's left (in anticipation of an upward trend). I reckon that'll happen in the blink of an eye, when it comes.
I have the full intention to overpay and reduce the term down as I want it cleared well before I'm 70. My mortgage allow for overpayments to the value of 10% of the balance each year, during the fixed rate. And since the initial fixed rate is quite low, I'm earning more interest putting the money into savings accounts (for now at least). That gives me the flexibility to overpay the mortgage further down the road, or use it for other things - home improvements etc.
With rates being so low at present, there doesn't appear to be much to be gained by overpaying the mortgage now. But as soon as rates go up, you want to be in a position to pay down the mortgage if at all possible. And they will go up - they can't really go down from here (unless they go negative, but then there'd be much bigger problems), but they can go up. Everyone is (or at least has been saying), that they can't see rates going up anytime soon. But they would say that, until it's too late. The paperwork for my mortgage included an example of if rates went up - they used 11% (not sure why, specifically) and that the repayments would triple, which is quite sobering. The more you can repay before/when rates go up, the more you'll shelter yourself from the rate rise.
My other 'strategy' is that I can put (extra) money into my SIPP in place of overpaying the mortgage. Whilst rates are low and the markets are doing better, I think that makes sense? As long as they don't change the rules and I can still access a lump sum before I'm 70!
On a sidenote: there are plenty of fixed rate deal about now at very low rates, but the moment that there's even a sniff of the base rate going up, the banks will pull all the long fix offers and put up the rates substantially on what's left (in anticipation of an upward trend). I reckon that'll happen in the blink of an eye, when it comes.
With those flagging up mortgages in the hundreds of £ you can see why it's easier to overpay by such a large %
Ie no sky no fags no booze pay as you go £10 phone could pretty much represent 50% of the monthly repayment mortgage.
But the big £ mortgages you are reliant on bonus and investment returns. that is if you stretched Cutting out the low or easy costs will not make much of a dent.
Worth doing to a degree but impact will be low.
I'm on a £70/pcm phone contract (it's shared data 20Gb over two phones) I don't think I've ever used more than 4Gb a month so I could shave £35pcm off of that bill maybe.
I could ditch sky and go free view and save £40pcm
We could shop in Aldi v Costco & Waitrose I'm sure this would actually be a pretty solid pcm saving and from all the reviews the quality is very good and sometimes better for a fraction of the price.
I. Ours cut down on booze - but it's all booze at home not at the pub. A saving none the less possibly £60-80pcm
We could avoid skiing hols and Med hols in the summer.
Ie no sky no fags no booze pay as you go £10 phone could pretty much represent 50% of the monthly repayment mortgage.
But the big £ mortgages you are reliant on bonus and investment returns. that is if you stretched Cutting out the low or easy costs will not make much of a dent.
Worth doing to a degree but impact will be low.
I'm on a £70/pcm phone contract (it's shared data 20Gb over two phones) I don't think I've ever used more than 4Gb a month so I could shave £35pcm off of that bill maybe.
I could ditch sky and go free view and save £40pcm
We could shop in Aldi v Costco & Waitrose I'm sure this would actually be a pretty solid pcm saving and from all the reviews the quality is very good and sometimes better for a fraction of the price.
I. Ours cut down on booze - but it's all booze at home not at the pub. A saving none the less possibly £60-80pcm
We could avoid skiing hols and Med hols in the summer.
Welshbeef said:
We could avoid skiing hols and Med hols in the summer.
You could, and you could also end up dead in 3 years time having worked your arse off to pay the bank.... There is obviously a balance to be struck between the 2. Most people do not pay off their mortgages in 10 or 12 years, most people do not over pay by £1k/month, and most people ensure they have a decent quality of life as well as paying back what they owe.
This thread at times has been absurd with people 'boasting', if you will, about how quickly they can clear their debt while living off beans. As long as you can afford what you're paying, and enjoy life at the same time, then feel free to carry on.
I do also wonder, with people who are paying back 1k/month overpayments, how much of that is 'them' or how much of that is 'my wife and I'? With 2 incomes, obviously it is going to be a lot easier than with 1.
Condi said:
You could, and you could also end up dead in 3 years time having worked your arse off to pay the bank....
There is obviously a balance to be struck between the 2. Most people do not pay off their mortgages in 10 or 12 years, most people do not over pay by £1k/month, and most people ensure they have a decent quality of life as well as paying back what they owe.
This thread at times has been absurd with people 'boasting', if you will, about how quickly they can clear their debt while living off beans. As long as you can afford what you're paying, and enjoy life at the same time, then feel free to carry on.
I do also wonder, with people who are paying back 1k/month overpayments, how much of that is 'them' or how much of that is 'my wife and I'? With 2 incomes, obviously it is going to be a lot easier than with 1.
Basically the same post as you did in the other thread?There is obviously a balance to be struck between the 2. Most people do not pay off their mortgages in 10 or 12 years, most people do not over pay by £1k/month, and most people ensure they have a decent quality of life as well as paying back what they owe.
This thread at times has been absurd with people 'boasting', if you will, about how quickly they can clear their debt while living off beans. As long as you can afford what you're paying, and enjoy life at the same time, then feel free to carry on.
I do also wonder, with people who are paying back 1k/month overpayments, how much of that is 'them' or how much of that is 'my wife and I'? With 2 incomes, obviously it is going to be a lot easier than with 1.
Can you not get your head around the fact some people live in modest houses and earn good money, or live in expensive houses and earn lots of money? It isn't common, but its not exactly rare.
Me personally, I can only overpay 10% per year, is that the same for everyone generally?
We are a prime example of the this...
We bought our current house for £92k 5yrs ago and we have a net annual income higher than the property value, that's the key for us, we overpaid massively in the 1st / 2nd year then settles in Y3 when we sold our rentals, had we not have some that it would have been paid by Y5 no matter what
Mortgage was only £320pcm so hardly a great length to quadruple or more the payment and suck up the excess overpayment fine
The joys of living up norf in the quiet outskirts of Newcastle haha
We bought our current house for £92k 5yrs ago and we have a net annual income higher than the property value, that's the key for us, we overpaid massively in the 1st / 2nd year then settles in Y3 when we sold our rentals, had we not have some that it would have been paid by Y5 no matter what
Mortgage was only £320pcm so hardly a great length to quadruple or more the payment and suck up the excess overpayment fine
The joys of living up norf in the quiet outskirts of Newcastle haha
I don't know the right or wrong answer for this as everyones situation is different.
I put a decent deposit down and had my term over 30 years. Thinking i will have a small mortgage every month let me enjoy myself a bit after saving my deposit. It should be paid off early anyway.
I do over pay but not a massive amount so i have thought is it even worth it?
I was employed when i started, after a few years i got made redundant. I have ended up contracting now. So my priority now is to have a safety net in the bank just in case i amout of work.
However the thought of interest rates going up does worry me a bit. I have thought about selling my Elise and knocking a bit of the mortgage.
But life is to short you need to enjoy yourself as well
I put a decent deposit down and had my term over 30 years. Thinking i will have a small mortgage every month let me enjoy myself a bit after saving my deposit. It should be paid off early anyway.
I do over pay but not a massive amount so i have thought is it even worth it?
I was employed when i started, after a few years i got made redundant. I have ended up contracting now. So my priority now is to have a safety net in the bank just in case i amout of work.
However the thought of interest rates going up does worry me a bit. I have thought about selling my Elise and knocking a bit of the mortgage.
But life is to short you need to enjoy yourself as well
I'm in the "no hurry" camp. Always been the plan to let the LA pay it off. Working out so far, tho' it's now time to buy the retirement property which will probably be burden free using the equity built up via inflation and improvement over the decades.
Might try for a mortgage tho'. No hurry. But don't suppose anyone'll lend a pensioner IO money.
Might try for a mortgage tho'. No hurry. But don't suppose anyone'll lend a pensioner IO money.
I'm a mix, I do overpay but not as much as I could preferring to boost my pension instead while rates are low. I could easily pay more into both but I want some fun as well and that generally costs money. For me it's all about balance, fun is important and what makes the 9-5 worthwhile but I'm also making sure my future is secure.
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