Well done keep at it. It’s like running a marathon. You never know what the interest rate will do. Our experience was we had a 1.89% rate for years and then this year our fixed rate ended and the interest rate shot up to 6.99. We could of remortgaged but the restrictions on over payment were far too restrictive. We were so glad we had regularly overpaid to have less of an impact of such a high rate. This month we made our last mortgage payment, I didn’t think we would manage it but every extra penny was thrown at it to free us up. Best Christmas present ever. Good luck on your journey
Hi mate. Good video and well done on your personal finance journey! Every person has their own circumstances and feelings toward this sort of stuff, that not many keyboard warriors take into consideration (they just go with what % interest rate is higher to suggest where to put money). I would like to put forward my thoughts for you to also think about. For your remortgage, have you thought about actually increasing your mortgage term to the maximum possible length? It sounds counterintuitive especially when you want to reduce it to 10 years at around £900pcm to be debt free by then. But as you say, you don’t know what is around the corner and your household could face difficult times. Therefore maxing out the term means your payments will be low, and any extra money you have you can then overpay (which comes off the principle directly). Let’s say for example your monthly payment is now £400 due to increasing the term, the £900 you were originally planning would have been paying off interest as well as the principle, whereas the £500 overpayment would come off the principle only instead. You can usually overpay 10% of the original loan per year. Therefore that’s around £10,000 per year of overpayments to play with for you, which from the above video seems like you won’t reach in a typical year. It also takes pressure off of you for months you may need cash flow e.g. boiler, washing machine or car breaks down, unexpected bills etc. you will now have the money to pay this, or at least the option. Whereas £900 means it will cause you stress for the next 10 years and god forbid any major interest rate increases, kids, family situations. This is just another strategy of reducing your mortgage term to 10 years like you have already suggested but in a very different way. Don’t be scared by a long mortgage term, the term length itself doesn’t exist and it is theoretical, it is a guide. As a real example I am on 5.3% therefore I have a real incentive to overpay as opposed to your low %, but in my first year I maxed out my overpayments and it reduced my “theoretical” mortgage term to 28 years from 37. When I remortgage soon I will be increasing it to 35 years to bring the monthly payments down again, and allow me to overpay off the principle directly. It’s a cheat code. By doing this I will be mortgage free in less than 10 years if I don’t lose my job, and if I do, I will have a smaller mortgage payment each month to rest on whilst I find work. I hope this provides you with an alternative view, but as I say everyone is different and in my opinion there is no right way of doing it for every person, just a right way of doing it for yourself.
Thank you so much for the considered and well articulated comment, I really appreciate it. I totally agree that having a low contractual payment has massive benefits in taking the pressure off when expenses come up. I hadn’t considered extending longer but you’ve definitley given me food for thought 👍👍
Thanks and you’re welcome! Also there is a reason banks only allow 10% overpayment per year, they know it’s not good for their business. I’d also recommend inputting different scenarios into ChatGPT, this will also give you food for thought! All the best.
My logic when remortgaging was keep the term long and overpay as/when I can (as I’ve overpaid for the first term of my mortgage significantly), I can always reduce the term when I remortgage again at the end of my next fix. If I’ve got one piece of advice it’s be flexible!
I lumped at the end of every fix some people dint realise you can do this i didnt at first just paying the allowed 10% so remember when your agreeing your new fix you can pay as much as you like off that ballance they ask off the capital or interest 😂 hard choice paid mine off last year now building stock market portfolio 😎
I dont understand why you would overpay on such a low interest rate of 1.1%? You're making yourself thousands of pounds worse off compared to if you had just invested it and put in a lump sum payment at the end of the mortgage term. And the argument that overpaying into a mortgage 'locks it away' isnt true - almost all banks keep it in a virtual seperate pot and will allow you to withdraw it
@@thegeordiesaver My comment explains why your reasons dont make sense - I've also just looked at your stocks&shares video. If you had invested that £26k in overpayments in the exact same way, you'd be an extra £7000ish up in returns. If that same tragectory keeps up, you'll be £10k worse off by the time your mortgage renews. Even in a 5% interest account (7% £300/month accounts are currently avaiable), youd be earning £1300 a year interest on £26k
I don’t think you are doing anything wrong by paying off at such a low rate. The more you pay now the lower the sting will be when your rate jumps up. I wouldn’t lock your mortgage into 10 years. Keep it at 20 (or whatever it is) and have the flexibility to overpay as and when you can afford it.
@@thegeordiesaver are you with nationwide? I can change the term on the app any time I want. I recently came into money and now have almost exactly in savings as my mortgage amount. It’s taking all my willpower not to press the send button and clear it 😂
@@thegeordiesaver I really like Nationwide… I know, considering I’m obsessed with paying it off, I’m surprised I haven’t. My mortgage is 44,000, so with fees it’s about 45,500 to clear. I have just over 41k in savings. It will clear itself in 7 years. So idk what to do. I worry that if I don’t do it the savings will end up getting gradually spent
At a rate of 1.1 percent I would not overpay.I would invest it for average returns of 7 percent a year.Remember the bank could take your house if you had no income.You would better having built up a lump sum while investing it and pay the mortgage in one lump sum.I totally respect your reasons though.At 4 percent there could justification for over paying.
@@thegeordiesaver dazza is right but if your uncomfortable investing use a saving account paying higher rates of interest then pay a lump sum when you re mortgage in 2026. But I get it payed mine of in 11yrs 6 yrs ago and it fells great ;-- )
Well done keep at it. It’s like running a marathon. You never know what the interest rate will do. Our experience was we had a 1.89% rate for years and then this year our fixed rate ended and the interest rate shot up to 6.99. We could of remortgaged but the restrictions on over payment were far too restrictive. We were so glad we had regularly overpaid to have less of an impact of such a high rate. This month we made our last mortgage payment, I didn’t think we would manage it but every extra penny was thrown at it to free us up. Best Christmas present ever. Good luck on your journey
@@purplekitiarakitty3355 wow that’s amazing! Well done on being mortgage free. It’s really motivating to hear 👍
What an achievement! Roll on mortgage free, we only over pay £160 a month, but we’re aiming to pay ours off in the next 4 years (cutting the term)
@@sidehustlereliance thanks 👍good luck with your mortgage overpayments 😃
Well done! 🎉 keep up the good work 🙌
@@burwin74 thanks for the support 👍
Well done, think of all that interest you've started saving.
Thanks for the support :)
Awesome vid and such amazing progress, defiantly the sensible option to add money next month to the emergency fund pot especially with it lacking :)
@TheGeordiePig thanks mate! Yes I think I’ll follow my plan and add to Emergency fund 👍
Ya doing awesome Geordie
Awesome achievement
Keep it up
Regards from Makem land 😊
@@boyasaka thanks so much for the support 👍👍
Hi mate.
Good video and well done on your personal finance journey!
Every person has their own circumstances and feelings toward this sort of stuff, that not many keyboard warriors take into consideration (they just go with what % interest rate is higher to suggest where to put money).
I would like to put forward my thoughts for you to also think about.
For your remortgage, have you thought about actually increasing your mortgage term to the maximum possible length? It sounds counterintuitive especially when you want to reduce it to 10 years at around £900pcm to be debt free by then. But as you say, you don’t know what is around the corner and your household could face difficult times.
Therefore maxing out the term means your payments will be low, and any extra money you have you can then overpay (which comes off the principle directly). Let’s say for example your monthly payment is now £400 due to increasing the term, the £900 you were originally planning would have been paying off interest as well as the principle, whereas the £500 overpayment would come off the principle only instead. You can usually overpay 10% of the original loan per year. Therefore that’s around £10,000 per year of overpayments to play with for you, which from the above video seems like you won’t reach in a typical year.
It also takes pressure off of you for months you may need cash flow e.g. boiler, washing machine or car breaks down, unexpected bills etc. you will now have the money to pay this, or at least the option. Whereas £900 means it will cause you stress for the next 10 years and god forbid any major interest rate increases, kids, family situations.
This is just another strategy of reducing your mortgage term to 10 years like you have already suggested but in a very different way. Don’t be scared by a long mortgage term, the term length itself doesn’t exist and it is theoretical, it is a guide.
As a real example I am on 5.3% therefore I have a real incentive to overpay as opposed to your low %, but in my first year I maxed out my overpayments and it reduced my “theoretical” mortgage term to 28 years from 37. When I remortgage soon I will be increasing it to 35 years to bring the monthly payments down again, and allow me to overpay off the principle directly. It’s a cheat code. By doing this I will be mortgage free in less than 10 years if I don’t lose my job, and if I do, I will have a smaller mortgage payment each month to rest on whilst I find work.
I hope this provides you with an alternative view, but as I say everyone is different and in my opinion there is no right way of doing it for every person, just a right way of doing it for yourself.
Thank you so much for the considered and well articulated comment, I really appreciate it.
I totally agree that having a low contractual payment has massive benefits in taking the pressure off when expenses come up. I hadn’t considered extending longer but you’ve definitley given me food for thought 👍👍
Thanks and you’re welcome!
Also there is a reason banks only allow 10% overpayment per year, they know it’s not good for their business.
I’d also recommend inputting different scenarios into ChatGPT, this will also give you food for thought!
All the best.
My logic when remortgaging was keep the term long and overpay as/when I can (as I’ve overpaid for the first term of my mortgage significantly), I can always reduce the term when I remortgage again at the end of my next fix. If I’ve got one piece of advice it’s be flexible!
@@marshallexi great advice! Yes I agree that I love flexibility longer mortgage term gives
I lumped at the end of every fix some people dint realise you can do this i didnt at first just paying the allowed 10% so remember when your agreeing your new fix you can pay as much as you like off that ballance they ask off the capital or interest 😂 hard choice paid mine off last year now building stock market portfolio 😎
Wow that’s amazing well done 👏 and great tip about paying at end of fix 👍
I dont understand why you would overpay on such a low interest rate of 1.1%?
You're making yourself thousands of pounds worse off compared to if you had just invested it and put in a lump sum payment at the end of the mortgage term.
And the argument that overpaying into a mortgage 'locks it away' isnt true - almost all banks keep it in a virtual seperate pot and will allow you to withdraw it
Hi I explain in the video my reasons for overpaying 👍
@@thegeordiesaver My comment explains why your reasons dont make sense - I've also just looked at your stocks&shares video. If you had invested that £26k in overpayments in the exact same way, you'd be an extra £7000ish up in returns. If that same tragectory keeps up, you'll be £10k worse off by the time your mortgage renews.
Even in a 5% interest account (7% £300/month accounts are currently avaiable), youd be earning £1300 a year interest on £26k
Fair enough
@@thegeordiesaver Don't get me wrong, you're doing great - but you're shooting yourself in the foot and could be doing much better
@@toxichazard5015 Thanks for sharing your thoughts 👍I am intending to focus more on my investments and my emergency fund in 2025
I don’t think you are doing anything wrong by paying off at such a low rate. The more you pay now the lower the sting will be when your rate jumps up.
I wouldn’t lock your mortgage into 10 years. Keep it at 20 (or whatever it is) and have the flexibility to overpay as and when you can afford it.
@@Nick-ew2cb yes I agree the flexibility is useful to keep! Thanks for sharing your thoughts 😊
@@thegeordiesaver are you with nationwide? I can change the term on the app any time I want.
I recently came into money and now have almost exactly in savings as my mortgage amount. It’s taking all my willpower not to press the send button and clear it 😂
Wow that sounds flexible to be able to change it within the app!
If I was in your position I don’t think I’d have the will power not to clear it 😂😂
@@thegeordiesaver I really like Nationwide…
I know, considering I’m obsessed with paying it off, I’m surprised I haven’t.
My mortgage is 44,000, so with fees it’s about 45,500 to clear. I have just over 41k in savings. It will clear itself in 7 years. So idk what to do. I worry that if I don’t do it the savings will end up getting gradually spent
@ that’s amazing, how long has it taken you to pay down your mortgage?
At a rate of 1.1 percent I would not overpay.I would invest it for average returns of 7 percent a year.Remember the bank could take your house if you had no income.You would better having built up a lump sum while investing it and pay the mortgage in one lump sum.I totally respect your reasons though.At 4 percent there could justification for over paying.
@@dazza9859 I appreciate you sharing your thoughts 👍
@@thegeordiesaver dazza is right but if your uncomfortable investing use a saving account paying higher rates of interest then pay a lump sum when you re mortgage in 2026. But I get it payed mine of in 11yrs 6 yrs ago and it fells great ;-- )
@ wow that’s a great achievement, well done!