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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

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Original poster

How much do you over pay on your mortgage

128 replies

Metoodear · 19/05/2018 21:22

We managed to scrape together some money and move not to for form London were we used to live

Our house was 190
We borrowed 160
It worth 280 now

We pay 800pm
we have been overpaying only £30 a month due to me not working but I have just got a pt job with nominal childcare costs so will bump the payments up to £130

Aibu to think anyovwpayment is better than none

OP posts:

Elliepurplestar · 20/05/2018 07:40

We over pay by £50 a month, it’s what we can afford, it makes dh feel like he’s doing something :)

supersop60 · 20/05/2018 07:50

None. Having the extra income to do it would be nice. It's a sensible idea.

Gin96 · 20/05/2018 07:52

We over pay £400 a month, only 4 years left to go, mortgage is 50k, we might just pay it off next year with a lump sum. Is it better to leave a small amount on your mortgage?

Onlyoldontheoutside · 20/05/2018 07:52

Have just remortgaged to a longer term fixed rate so no early repayments.Im still tucking money away for my DDS uni days (if she goes) as the repayment on the loans there are eye watering.

OrcinusOrca · 20/05/2018 07:54

It will be paid off before I'm 48 at this rate anyway and I'm mid 20's so earnings likely to go up still. Will consider it further down the line perhaps.

FancyADoughnut · 20/05/2018 07:54

Gin96 lots of people still suggest leaving a small amount in case you ever want to borrow more. However, just knowing that debt is gone and we are very unlikely to ever move again we decided to pay it off completely.

PatchworkGirl · 20/05/2018 07:55

None at all. I've considered it but the rate is currently so low that any spare money is better elsewhere. It would be an emotional decision to overpay (the idea of no debt) but I can't justify it logically at the moment.

JustSeeingHowManyCharactersWeC · 20/05/2018 07:56

We took out a mortgage of £180k three years ago and now we owe £110k and house is worth £280k.

We were capped at 10% a year but then we remortgaged and now we pay off what extra we can. Every little helps and as interest on savings is so low we 'earn' more by paying off the mortgage.

Yura · 20/05/2018 07:57

Depends - in nof so great months we overpay 30-80, in better months more. most of our bonuses get paid directly into the mortgage though

Ghostontoast · 20/05/2018 08:04

Yes paying to reduce the capital is better, rather than reducing the term.

Also read the contract carefully to see how the interest is calculated. If the interest is calculated once a year then it makes sense only paying a lump sum annually off just before this. (Also check there's no penalty for paying off too much I had a mortgage where you could pay off up to 10% of the amount borrowed each year without a penalty). However if you have a mortgage where every time you make an overpayment the capital is reduced then it makes sense to overpay every month.

NinaMarieP · 20/05/2018 08:05

It's 10% of the yearly amount, but we decided to do it as a monthly overpayment rather than a lump sum. Hopefully we will be able to overpay more once our fixed term ends.

FancyADoughnut · 20/05/2018 08:14

Our mortgage interest was calculated daily so it was very addictive to overpay online as the next day you could see the balance drop by that amount.

CuntinuousMingeprovement · 20/05/2018 08:16

£30 is something, OP. All goes to chip away! I asked for ours to be calculated daily so we could make overpayments as and when. Only have the facility for 10% per annum without penalty, but that's much more than enough for us at the moment. We owe about 90k and certainly aren't in a position to overpay more than 9k a year!

It is worth bearing in mind whether the money could do more for you elsewhere though. I'm a believer in rounding up to the nearest £50 or £25 if you can, just as a way to sort of knock a bit off without noticing much, but more substantial than that and that's when you start to consider savings rates. And also how long your current term is.

PlumsGalore · 20/05/2018 08:17

I started by rounding mine up, so say it was 1103.00 I would pay 1200, then each time the fixed deal came to an end I would take a new deal but knock a couple of years off the term. Any pay rises I would also where possible add to the overpayment, so a monthly in hand pay rise of £50 and I would up the payment to 1250.

Paid a 25 year mortgage off in 18 years doing this.

ohamIreally · 20/05/2018 08:21

I'd love to overpay and reduce the term but for now I think it's better to pay into a pension- makes much more financial sense to me.

Panda81 · 20/05/2018 08:21

I can understand overpaying if you have surplus savings or income but I can't understand cutting out luxuries and holidays for years just to shave a couple of years off the end of the term.

I would prefer to have a longer mortgage but better quality of life now.

FancyADoughnut · 20/05/2018 08:26

Panda81 you are right it's a balance. We never went without holidays but we didn't do unnecessary things to the house such as replacing furniture or decorating when things were adequate but tired looking.

ifeelsoextraordinary · 20/05/2018 08:28

As much as we can. We are limited to 10% a year until next year then will overpay a lump sum (again as much as we can). My primary goal is to get the mortgage paid off as soon as possible. We’ve already knocked about 8 extra years off the term. I’ll feel so much more secure when I own it outright and means we can start saving for our kids education and future.

SensoryOverlord · 20/05/2018 08:28

Same as the pp - there are quite a few people saying they scrape the overpayment together or struggle to do so - I just don't get it.

It's not worth it for a couple of years off the term imo - life is for living too and I wouldn't sacrifice all enjoyment for years just to pay it off sooner.

CuntinuousMingeprovement · 20/05/2018 08:29

I entirely understand it. It's a perfectly logical thing to do if you're more interested in being free of the mortgage earlier than you are in holidays, other luxuries etc. We'd never be that disciplined but I get it.

Guna100 · 20/05/2018 08:38

We overpay 150 a month, limited to 10% but we also have an online savings account and every time we choose a slightly cheaper option or save money or my DH does a nixer, we put the money there to offset after our fixed term ends. We also remortgage every few years to get best deals on market - quite a lot of work! Unfortunately our mortgage is still very high but that is because we bought a crappy house in a good area and stretched to get house fixed up.

seven201 · 20/05/2018 08:41

Nothing! Hopefully will be able to a bit once dc are not in nursery anymore. Our mortgage term ends when I'm 68...

UserInfinityplus1 · 20/05/2018 08:52

Again Mumsnet is a parallel universe it would seem...

I hate these kinds of threads. What does it matter how you or strangers on the internet manage their finances? It’s just another way for some to show off and others to feel, at best like shit and at worst a sense of worry and dread, at their own financial situation

OuaisMaisBon · 20/05/2018 08:53

Please excuse my ignorance, but I thought that if you overpaid a mortgage, so that the amount you borrowed, plus interest, was paid off before the end of the mortgage term, you were penalised for paying it off early? Maybe things were different when I got my mortgage in 1988, but my mortgage still wasn't paid off until I sold my flat 26 years later, having extended the mortgage term at one point in order to borrow a larger sum.

Original poster

Metoodear · 20/05/2018 08:54

SensoryOverlord
100 per
Month if worth five years less of paying and also saving around 40k in interest

We are off on three holidays this year we both have cars
I only work pt and finish at 3 husband is full time and finishes at 3 we have a good home work balance it’s taken a while and when wile everyone else is still serving their mortgage into there 60s and having to work we will be off on the type of holidays we like

Btw were not wealthy our joint income is 45k we have 3 children

OP posts:

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