How did you pay your mortgage off early?

[HailEdmundLordofAddersBlack]

We are early 30. Mortgage of about 130k left until age 65. I'd like to pay it off sooner but a little each month seems a drop in the ocean! I know over 30years it will add up but still... we have the choice between savings, a life or paying off mortgage really. If we spread between all three then nothing will be done well.

If I pole everything into mortgage and pay it off 10years early it will mean not much in savings or no holidays...I kind of worry I will die with no mortgage but life not being lived!

Do I just commit to £50 off extra a month and just forget about it? I think £50 a month over 30 odd years would probably add up? Seems a crap amount.

How did you pay yours off early? Not really interested in stories from people who had an inheritance or who were high earners. Not being rude, just isn't something I will ever be/do so it won't help! Thank you

Here's an overpayment calculator - have a look!!

www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator

Thank you!

Ok so £50 a month reduced it by nearly 4 years... £100 a month by 6years. Bit pathetic but I suppose mortgage free at 60, when we want to go part time, is good. I might try £60 a month... unless I win the lottery I don't think I will be mortgage free any earlier sadly

We overpaid by about £300 a month for some years and then my dh inherited money and we paid off the remaining 30k with that.

Font forget that your salaries will go up (maternity/redundancy wouldaffect this obvs.) so you can up your overpayments and the mortgage amount will be decreading steadily anyway. I'm now late 40s and basically overpaying by nearly 100% each month

Oh god so many typos and no edit button!

Yeah I don't want to pay £300 a month off as then the rest of our lives suffer. I need to strike up a balance of some kind really!

Yes good point about the wages rising etc.

I think it is one of those situations where a small amount will make 5years difference but only if I start NOW...I will look at organising it tonight.

It doesn't have the be the same amount every year though- you can change it depending on your circumstances. Sometimes we've paid a lot, other times only £10/month but it all chips away at it. We haven't paid ours off but it is now comfortably low.

There is a balance though between living for no and living for later. I would start with £50/month and see how it affects your everyday life. After a year, maybe up it to £80, or if you have some windfalls, add those in.

I paid mine off early by buying in a cheap area (moving 250 miles in the process) and not having any children (houses near good schools are more expensive)

I was then fortunate that my salary rose and interest rates went down, so I kept to the same payments or more. I was very fortunate that my salary went up enough to have a reasonable life too.

I do think you need some savings (an emergency fund). Overpaying on your mortgage is like pensions, in that even a little can go a long way.

Come up with a plan, try it for six months to see if you've got the over payment vs savings vs life balance that suits you. If you have, make a note to review it annually. If you haven't, tweak it and try again.

Every time I had a pay rise (not massive ones), I channelled the extra money into the mortgage because I wasn't used to having that money anyway. Not paid off yet, years to go, but I've knocked something like 8 years off the mortgage term so far.

Those offset mortgages with a linked savings account are a genius way of taking the sting out of the interest while still having that money available for emergencies or holidays or whatever.

We kept our monthly payment the same amount (static payment arrangement) after each annual review or interest rate change which generally would have lowered the monthly payment.
We started with a monthly payment of just over £1k and could now be paying £550 a month, so overpaying by £450 a month, but don't miss the extra money because we've never had it.
Could do loads with the extra £450 now but overpaying will mean our mortgage is paid off when the oldest dc could go to uni, so that's our incentive to keep overpaying.

We haven't paid ours off yet, but I'm hoping to.

Whenever we manage to reduce costs somewhere, e.g. when DD's nursery fees went down because she was in an older age band I put the money we saved into additional monthly contributions.

30-35 years on a £130k mortgage does sound like a very long term. Is your repayment quite small due to income, if so, can you increase your earning potential somehow? Are you paying around £500/month currently? What’s your monthly income?

We originally had a 30 year term for a £600k mortgage but have managed to reduce the term down to 19 years, and hope to reduce that a bit more. We did that through paying off lump sums when we had available savings, and changing providers when better interest rates were available. Then, we kept the payment at the original level so we’re overpaying without missing it.

Remember though, a mortgage is one of the cheapest loans you’ll ever get in terms of interest rates, especially if your lender allows you to overpay. That’s why I’m wondering about your term against value of mortgage. If you can commit to reducing the principal through overpayment, you should be able to reduce the term significantly.

Like SchoolNight said, decide what is the amount/proportion of your income that you're comfortable paying and kepe it at that level even after each new deal. We have just had out first deal change after buying four years ago and our payment has reduced by £120 pcm. By keeping our payment the same, we're now overpaying without having to take money from elsewhere.

Overpayed massively by sacrificing non essentials like Holidays. Op these things only generally happen reletively quickly if you are prepared to make sacrifices.

Paying 100 reduces it by 6 years.... but over time you can add more when your circumstances change.
In 15 years you wont have childcare costs. You would be able to pay 100s then..You need to look at the big picture. Make sure your not over paying what your allowed in the t&c of your mortgage.

Thanks all!
That's a good point about not paying childcare fees forever but that is a good few years off yet. Mind you, so is the mortgage term!

I double checked and we owe £136k. We pay £585 per month. Income is good but we were pouring money into doing some major house improvements. Those improvements are finished now but we have no savings left apart from £500! So I guess we want to build that back up again sharpish in case the car goes bang etc.

Earnings; we currently earn 45k between us so we aren't low income as such. Just not rolling in it. We have several financial commitments like helping family out etc.

My husband will also be going part time to study by the end of the year so we will be down to about 35k per year. £50 a month is more than doable, but I would rather put the 100s into savings.

You are all right though, I need to just start and view it as something that will change over the years!

Not prepared to do without a holiday per year though...I work bloody hard and one thing that keeps me working hard is a holiday.

I am nearer late 30s, but we have been overpaying since we had our first mortgage about 10 years ago and have brought it down a lot! Never regular overpayments but we sell a lot on eBay etc and try and save up a little chunk to pay off. It all makes a difference! Definitely make sure you are on the cheapest rate you can be. It also could save you more interest wise if you could pay off at the start of the year as a lump if you have enough savings eg) if you overpay £50 per month = £600 per year if you paid £600 in January then put the £50 a month back into savings. Appreciate this only works if you have the savings, but I think interest is usually calculated on a daily basis.

We are mid 40s started overpaying 2 years ago- have 11 years left on a mortgage about your amount. Going to try to get it to 7 years. We would have half the mortgage by now but remortgaged for school fees about 10 yrs ago. Wish we had put in an extra £100 a month or so 20 years ago when we took out the mortgage. Now looking at a £700 overpayment a month which would mean we would have to be pretty frugal.

You have inspired me everyone. Have done a bit of cost cutting on my budget sheet and can now pay off £70 a month without really feeling it. That's until September when my husband goes part time. Will rethink nearer the time!

We have an offset mortgage linked to our savings account - I can really recommend it, as you have the money there in savings for when you need it, but it reduces the interest you are paying on the mortgage and so we overpay each month by the difference in interest automatically.

It’ll become much easier for you in the longer term, don’t beat yourself up about it now. Costs go down, incomes go up, most people find their mortgage much more manageable 10 years in, that’s when you can focus on increasing payments.

I do the same as a PP, increase by about 50% of any pay rise I receive, from the day I get it so I never get used to it.

I would spread it over all 3 but I would plan it carefully. So if you want £5k in savings then save that first with the main focus being on that and having a "life" being secondary - so some fun but budget friendly. During this period I wouldn't overpay on the mortgage or would only pay £10/month. Once you've reached your first savings target I would make overpaying the mortgage a priority - then savings and then a "life", the latter two more or less 65/35. You'd need to play with the figures to work out what's the right balance.

We overpaid our mortgage for a while but savings became lower so we stopped and started topping those up. You don't have to stick with one plan. I also read once that someone overpaid their mortgage by transferring the pence over to their mortgage at the end of every day. So if they had £98.72 in their account then they'd transfer the 72p. They would also overpay when they had a bonus or some unexpected money. I save our two council tax free months money towards our summer holiday but you could use that too. Our council tax is £150/month so automatically a lump sum of £300.

Asking how we did it ? - We started our mortgage paying an interest rate of about 14%. Each time, the rate came down slightly, we kept our payments at the higher rate - I figured what we'd never had, we'd never miss.

We also do what BackForGood does. We have paid the same amount for our mortgage since we took it out 5 years ago. We've changed rate twice, with the same lender in this period. It doesn't sound much, but in doing so, it equates currently to £250 overpayment a month and we've reduced the term by over 14 years in just this short time. We haven't missed the money as we'd been used to paying it anyway.

We are overpaying substantially per month but this is now the only debt we have; ds is through university so those costs have gone, amd we will be clear in November, just as dh retires at 58, and the mortgage is gone 2 years early.

We overpaid what we could when we could whilst we were doing the child bit, but now ds is older we have more free money and have everything we need and most of the stuff we want, s have more money to put to the mortgage.