First step, in the long road to being mortgage free.

A question about : First step, in the long road to being mortgage free.

We bought our first house in July 2010, and being intially quite clueless about buying a house this forum was quite useful in helping me out. It was reading this forum that gave me the idea of being mortgage free, so I thought this would be a good place to keep a record.

From the even before buying the house, the idea was that we would overpay, but we didn't start straight away due to

a) Wanting to build the savings up a bit.
b) Having to buy furniture and appliances from scratch.
c) Getting new windows installed and general work on the house.

Neither of us have any debts whatsoever (apart from little thing called a Ј200k mortgage), and I'm personally very adverse to debt due to my parents having financial problems when I was younger and never owning their own home. While I love them to bits, that probably pushed me to being the first person to go to Uni in my family and owning a home.

Anyway the mortgage we got was for 75% off the property value, along with fees the balance as of July was Ј200,999.

The mortgage is with the Post Office at 4.99% fixed for 5 years, which allows overpayments of 10% per year. It doesn't reduce the term of the mortgage but reduces the payments. As we shouldn't be anywhere near 10% per year for the 5 years I'll just increase the monthly payment to make up the difference.

Anyway to summarise.

Balance as off 15/07/2010 = Ј200,999
Regular Monthly payment = Ј1173.85

First overpayment was made today of Ј500. I hope to do that every month, which would bring the mortgage down to 14 years. But it will probably be once every two months.

Joint income is around Ј65k.
I'm also starting to work one evening a week doing three overs overtime, which will give me about Ј120 per month towards overpayments.

I just realised that rather detailed, so sorry if it bores anyone.

Best answers:

• Welcome to MFW world Tony!
  Your overpayment amounts look great.
  Good luck with your journey - will keep watching!
• That's a great summary. Good luck on your journey!
• Good luck on your journey Tony!!
• Thanks. When I get the letter confirming my overpayment and outstanding balance i'l update the signature.
  As I said in my first post I started doing Thursday nights as overtime which is basically not doing a lot and being here in case anything happens, which it never does.
  I think someone is thinking about cutting back on the overtime, as they do three nights, so I might do two nights a week which will be around Ј240 a month extra after tax.
• Hello Tony and welcome to MFW boards!
  you have a very similar mortgage figure to myself so it will be interesting to keep tabs on your progress
  Good luck!
• Great to have more 6 figure mortgages - especially when they are bigger than mine I'm down at 130 but if you make a big dent in yours you'll wizz past me in no time
  Welcome to MFW
• I didn't quite realise just how much interest would be saved by my one Ј500 overpayment today.
  I discovered this spreadsheet, which i'm sure people already know about.
  https://forums.moneysavingexpert.com/....php?t=1157173
  But, by paying Ј500 today I'll be saving Ј1,168 in interest alone, which is roughly a month already.
  I think this overpaying lark, may become addictive.
• Addictive it certainly is... we plug away !
• well done in taking the first step Tony! Keep up the good work!
• Today I received confirmation of our first overpayment, our current balance and the new monthly monthly payments.
  Our payment will reduce each month, due to the term not being allowed to reduced.
  To counter that instead of paying the regular of Ј1170.89, we'll round it up to Ј1200 each month + another Ј500.
  Oh yes, i've created a signature with the details.
• Thanks for posting the link to the spreadsheet. I'm downloading it now. I'm starting my MF journey this week. Good luck with yours x
• Thanks for the tips.
  As my mortgage still has 24 and a quarter years i've decided to set myself a a target as I'll be in this for the long hall, and I want a more relatively short term target.
  I'm currently on a 5 year fixed rate until July 2015 at 4.99% with the Post Office with an original mortgage of Ј200,999.
  If I made no overpayments whatsoever and I'd still owe Ј178,000 in 5 years time.
  Instead I plan to get the target to below Ј150,000, preferably nearer Ј140,000. Knocking Ј50,000 to Ј60,000 off in the next four and a quarter years.
  That would give a LTV ratio of around 56% when we are up for the mortgage renewal. Getting it below 50% would be especially good.
• So I've managed to stick to my guns and make a second monthly overpayment.
  This time it is Ј529.11.
  So thats Ј1029.11 in two months.
• Im another 6 figure MFW. Reckon someone should start a 6 figure club!!??
• Not that I don't appreciate all the other posters (as I definitely do!), but agreed that is nice to have another 6 figure mortgage to the pile. Of course we are all secretly jealous that we are not down in the magical world of 5 figures!
• I also have a 6 figure mortgage, currently at Ј196000, fixed rate ends in March