Do you overpay your mortgage?
Discussion
I was just thinking that in December we'll have been in our first owned place 4 years already. From day one we were aware that for every pound borrowed on the mortgage we were gonna be paying over double back so needed to get this down as much as possible. Made a real effort to try and overpay the mortgage resulting in that by end of this fourth year out of 230k originally borrowed, 170k will be left which I'm happy with as a bit of equity in these uncertain times is reassuring. How are you guys getting on with yours?
We don't now for the simple reason that we haven't got one.
Back in the day when we were on a straight repayment mortgage we increased payments as the interest rate rose and then kept them at the same level when rates dropped. After a few months you got used to paying the extra and it was eating down the capital and thus reducing next year's payments and effectively increasing our overpayment. We also paid in a lump sum when an insurance policy matured, again knocking back the capital because it was money "we'd never had so didn't miss".
It does sound crazy and I had a lot of stick from the "economists" at work, but the result was the mortgage being paid off in 15yrs. In the end though I don't care how wise or foolish it was, knowing we really did own our home made us both feel incredibly secure in our outlook on life. (and the economists still had 10yrs payments left)
Back in the day when we were on a straight repayment mortgage we increased payments as the interest rate rose and then kept them at the same level when rates dropped. After a few months you got used to paying the extra and it was eating down the capital and thus reducing next year's payments and effectively increasing our overpayment. We also paid in a lump sum when an insurance policy matured, again knocking back the capital because it was money "we'd never had so didn't miss".
It does sound crazy and I had a lot of stick from the "economists" at work, but the result was the mortgage being paid off in 15yrs. In the end though I don't care how wise or foolish it was, knowing we really did own our home made us both feel incredibly secure in our outlook on life. (and the economists still had 10yrs payments left)
Not at the moment!
2007 was a financial nightmare, with my wife giving up work (planned), a third baby (unplanned), a job move (planned) and my new company getting acquired 10 days later (unplanned by me) resulting in zero commission for 9 months.
As a result, with a mortgage interest rate of 1.86%, there's other debts which it makes sense to clear first.
2007 was a financial nightmare, with my wife giving up work (planned), a third baby (unplanned), a job move (planned) and my new company getting acquired 10 days later (unplanned by me) resulting in zero commission for 9 months.
As a result, with a mortgage interest rate of 1.86%, there's other debts which it makes sense to clear first.
We overpaid by about 50% of monthly payment for a couple of years. Decided about 12 mths ago we'd rather use the money to do stuff with the kids whilst they're still young so we save the same amount and blow it on family holidays, weekends away etc. Heart over-ruled the head on that one..!!
Mortgage is quite a paltry amount by todays stds and will be paid off in 10 years so am not too bothered.
Mortgage is quite a paltry amount by todays stds and will be paid off in 10 years so am not too bothered.
Yep!
I have a repayment mortgage and used to put in as much money as I could, including some cashed-in investments, work annual bonuses, etc. I've paid off about 80% of the amount borrowed in 6 years!
I now pay a little more than the minimum and can see the balance reducing quickly as the repayments now equte to about 90% capital, 10% interest/month (if that makes sense?) I plan to be mortgage free in about 3 1/2 years, so 9 1/2 years to repay a 20 year mortgage.
I have a repayment mortgage and used to put in as much money as I could, including some cashed-in investments, work annual bonuses, etc. I've paid off about 80% of the amount borrowed in 6 years!
I now pay a little more than the minimum and can see the balance reducing quickly as the repayments now equte to about 90% capital, 10% interest/month (if that makes sense?) I plan to be mortgage free in about 3 1/2 years, so 9 1/2 years to repay a 20 year mortgage.
been paying an extra £400 a month ever since the interest rates dropped. Was on target to pay off 12 years early (One Account) but now agreed a deal to buy a farmhouse which needs work whilst prices/rates are low and then rent the other property out which will only cost £100 a month covering the rental shortfall.
I always overpaid my mortgage-keeping the repayments high when interest rate dropped,fixing the rate put still paying as much as possible and lopping chunks off when I received bonuses when I was a profit share partner in a business years ago.I've not had a mortage for 7 years and as I bought my first property when I was 18 I was mortgage free by the time I was 33.This has allowed me to buy rental properties-I bought well so the yield has always been decent.Once again I have overpaid these as much as possible(I used all the rent to pay as much as poss off the mortgages plus paid bonuses and some spare cash off)and now have 7 paid for and 2 with small mortgages on which I plan to have paid off in the next 12 months or so.
ringram said:
limpsfield said:
I love these threads as before long they should just evolve into a willy waving competition so I will kick off:
No, my butler over pays it for me.
+1No, my butler over pays it for me.
Edited by ringram on Wednesday 22 September 02:08
limpsfield said:
I love these threads as before long they should just evolve into a willy waving competition so I will kick off:
No, my butler over pays it for me.
From the man with a Maserati and a Lotus Elise? No, my butler over pays it for me.
I drive a Ford and choose to pay for my house.
If you thought the content of this thread amounted to "willy waving", don't look in the one about having a Titanium American Express card!
I started seriously overpaying my mortgage about ten years ago. Essentially, whenever the mortgage rate fell (as it tended to do at the time) I maintained my payments at the higher level - preventing the mortgage company from automatically reducing the monthly amount. As a result, I finished the mortgage in 2008 rather than its original target date of 2014.
It has made a world of difference to my ability to save - as well as knowing that my house is truly mine.
It has made a world of difference to my ability to save - as well as knowing that my house is truly mine.
I do overpay (£500/month)and have done so whenver possible but my rate reduces to 1.49% next month so my financial advisor is saying it's better to invest the money........I've agreed that's fine but as soon as the yield on the investment is lower than the mortgage rate then I'll take it out and pay chunks off the mortgage.
Bing o said:
limpsfield said:
I love these threads as before long they should just evolve into a willy waving competition so I will kick off:
No, my butler over pays it for me.
I only buy my houses with cash, same as my cars. Peasant.No, my butler over pays it for me.
5potTurbo said:
From the man with a Maserati and a Lotus Elise?
Those are the nanny's and gardener's cars, you fool!I bet you are the sort who buys their own furniture.
I would never lower myself to actually sitting up front and driving a motor vehicle.
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