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Anyone paid their mortgage off in 5 years or so ?

(42 Posts)
mamatomany Fri 31-Dec-10 12:16:37

I really really want to get rid of ours asap.
Any good sites or advice please ?

indigobarbie Fri 31-Dec-10 12:22:30

marking my place on here with interest

TDada Fri 31-Dec-10 12:22:58

I think it is merely a matter of getting low rate + making capital payments, terms permitting.

HSBC has some very good mortgages with capital flexibility and low fees. Ony snag is that you need to have 40pc equity to get the best mortgage. Despite what expected increased in rates i still think that their tracker (2.3pc) is a good bet.

There is no real magic other than getting low rate and paying off as much as you can and watching out for fees and IR volatility

TDada Fri 31-Dec-10 12:23:55

Offset mortgages (First Direct has good ones) are another useful tool.

ChasingSquirrels Fri 31-Dec-10 12:24:31

pretty straight forwardly you have to save a lot more than you spend.
Plus, depending on the size of your mortgage, have a reasonable amount of good luck.
We paid ours off in 2008, having brought the house in 2001.
The factors enabling us to do this included - reasonable inheritance from ex-H's grandmother, pretty good household income, not spending a lot on other things, capital gain on the sale of out first home that we kept as a rental property, having brought the house in 2001 when prices were relatively cheap (although it didn't feel cheap at the time compared to the amount we paid for first home in 1994).
The most important of those factors were the income and the lack of other spending.

TDada Fri 31-Dec-10 12:25:05

....if you have lumpy/irregular income as you can offset you savings/lumpy income with your debt and pay interest on the net amount.

Anything specific you have in mind?

mamatomany Fri 31-Dec-10 12:26:06

We are tied in until 2012 which with the threat of interest rates rising I wonder might not be a bad thing.
Our LTV is dreadful and I imagine will get worse as prices drop, in fact i know we are in negative equity hence needing that to change by the time we're ready to remortgage.
I guess i'm looking for tips on reusing teabags twice that sort of thing grin

allnightlong Fri 31-Dec-10 12:26:52

Moneysavingexpert has a forum where many people discuss this type of thing many have done it within 5 years it can be done but it does take dedication.

TDada Fri 31-Dec-10 12:27:01

We bought in 1997 paid off in 2006 and then proceeded to buy bigger house at the top of the market in 2007......when this one is paid off then I am done.

TDada Fri 31-Dec-10 12:30:20

mamatomany - we were tied in for 5 years at 5pc fixed which looked good for a few months but is not great....managed to mostly get round it though: if you have access to large savings/cash many lenders will let you shorten the term of your mortgage from say 20 years to 1 year for a nominal fee (say gbp 50). You can thereby pay large chunks off without suffering penalty.

Let me know if you need more info.

ChasingSquirrels Fri 31-Dec-10 12:38:52

You need to look at your financial budget - properly (squeezing teabags isn't going to save you the amount you are looking at).
And then having fully itemised EVERYTHING you spend in a year you need to look at what you can cut back on.

Do you have Sky - that can be £40pm? That's nearly £500pa. A freeview+ box would cost you under £100, so that's £400 saved in the first year.
Look at all utilities and whether you can get them cheaper.
Look at your utility usage - tumble drier, heating down a notch etc.
Food bills - can you "go down" a level, move from finest to normal, from normal to value. There are things where you wouldn't notice any difference other than in your pocket.

Cars - do you run 2, could you live with 1?

Hobbies, sports, gyms etc

The coffee on the way to work, or the sandwich for lunch every day.

If you really want to do this you, and everyone else in the family, needs to be committed to seeing where the money goes, and to cutting back on it.

As a final point, I have a friend who is repaying approx £800 pm extra off the mortgage - but after that has very little spare cash. She as talked about how in 5/10 years they will be able to take the kids on nice family holidays, etc.
TBH this seems a bit mad to me - if they didn't repay that extra it would be £10k a year. They could repay say £5k, and have more to spend on life now - and still repay the mortgage early. Or not repay any, and still have the mortgage repaid by the end of it.

There are happy medium's - yes plan for the future, but not at the expense of the present.

TDada Fri 31-Dec-10 12:45:26

-review direct debits to see who the parasites are
-replace gym membership with outdoor exercise?
-do look at what mortgage product you have. If you are sure about rates then consider going for 50pc fixed rte, 50pc tracker.

-my personal view is that n HSBC tracker for the next 2001 is worthwhile but you might consider fixing after that or fixing 50pc now. As I said there is no penalty for redeeming HSBC trackers early. Also First Direct, I believe.

As previous Chasing said your kids are only young once so don't make your life miserable just to pay the mortgage off.

mamatomany Fri 31-Dec-10 12:47:22

I'm hoping we'll have about £40k next January to pay off and DD1 will finish prep school so there's another chunk we're currently paying which can go towards the mortgage.
Sky I agree has got to go it drives me bloody mental anyway and DH has it on his phone.
Racking my brains as to what else we can do without too much misery, we had a hard year in 2009 so I think we need a happy medium, that was too miserable.

amigababy Fri 31-Dec-10 12:53:00

If you do spreadsheets (can do on paper but not as much fun), set a 2011 budget (good time now, new year etc)
Income at the top, expenses below, broken down into type - food, car, mortgage, holidays etc, whatever suits. Start with your bank balance today and work out the projected new balance at the end of each month, to see what you could be left with this time next year (have lines for DIY etc in case something breaks)

then each month, work out what you really did spend and change January from a budget to an actual.If you have extra in any month, that goes on the "repaying the mortgage" line. Apply any of the other advice given to reduce the actual numbers in the boxes to a level you can live with each month and still be happy.

It takes us about half an hour a month to balance up and the mortgage got paid off last year.

cat64 Fri 31-Dec-10 12:57:07

Message withdrawn

TDada Fri 31-Dec-10 13:15:58

udgets are like diets...they need to be sustainable and are best over a longer period for best effect

TDada Fri 31-Dec-10 13:17:04

mamatomany - remember that if you are tied in there is sometimes a way round it.

SauvignonBlanche Fri 31-Dec-10 13:19:59

I will come into some money next year, enough to pay off our mortgage. I can't decide whether to do that, or look for a bigger house.

mamatomany Fri 31-Dec-10 13:24:02

SauvignonBlanch - I guess it depends on the drop in house prices locally, where we are there simply haven't been any in the next step up but apparently ours has dropped 20%.
The trouble is for us the next step up is a 4/5 bed detached and as we all know they are owned by retired doctors who have no mortgage so are in no hurry to sell at all so they remain for sale at 2007 prices, it's very frustrating.

mamatomany Fri 31-Dec-10 13:25:19

TDada - we should have got out of it in year 1, but now the penalties exceed any savings so we might as well stick out the next 15 months. It has been sickening though, we would have been paying £240 a month instead of £950 a one point

cat64 Fri 31-Dec-10 14:08:23

Message withdrawn

mamatomany Fri 31-Dec-10 14:12:07

I think i will have get a 16 hour a week job, great timing eh, and put that all towards the mortgage.
Next time we have 7 years of feast remind me to may hay whilst the sunshines instead of buying tat blush

TDada Fri 31-Dec-10 16:39:11

mamatomany- same boat here, paying 5pc. So I reduced the term from 20 yr to 1 year to allow me to pay off big chunks. Now the penalty on the remaining balance is not to bad...next month we switch to HSBC tracker at 2.2pc.

mamatomany Fri 31-Dec-10 16:47:09

I didn't know you could do that, we need to speak to an FA maybe.

TDada Sat 01-Jan-11 02:08:15

mamatomany- it depends on the lender. I was able to shorten mine to a year to accelerate payments and then extend it back to 20 years. Each change costed GBP 50. I still haven't understood the reason for my FInancial adviser not telling me that I could do this- I came up with this independently.

When shortening and then lengthening the mortagage term, just ensure that you don't miss any payments as that would be very bad for your credit rating.

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