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Guest KingCharles1st

Mortgage Repayments

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Guest KingCharles1st

As I carry along the path of working out my projected "financial future" scenario's, I keep thinking that the only way to go is to follow my new rule of never having more than 2/3 of my total wealth tied up in property- going over this ratio is instant disaster I feel.

So now I look at splitting AVAILABLE financial resources (leftovers per month after mortgage & all other outgoings) three ways; 1/3 property, 1/3 savings and investments, 1/3 business (I run a small but reasonanble profitable business as a sideline from my day job.) The good thing about my business is that it is very low maintenance, and the returns are high compared to investment- so although it doesn't bring in a fortune per annum, the yield is +100%, so therefore I do not include it in the investments savings 1/3.

So I'm thinking either hold on now and finally buy the right property (ie stretch to find something very nice at the bottom of the crash- when it comes) or buy something horrid and cheap that gives an income.

The plan is then to attack a smallish mortgage in the same way as one would hopefully attack a large credit card bill, until it is paid off. At that point you can then upgrade property (with another reasonable priced mortgage) to the next level and then do the same again. Doing things this way should keep one on "the right side of the curve."

But I want to know can the 10% overpayment per annum be got around so as to get the balance down quickly?

Thoughts anyone?

Edited by KingCharles1st

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As I carry along the path of working out my projected "financial future" scenario's, I keep thinking that the only way to go is to follow my new rule of never having more than 2/3 of my total wealth tied up in property- going over this ratio is instant disaster I feel.

So now I look at splitting AVAILABLE financial resources (leftovers per month after mortgage & all other outgoings) three ways; 1/3 property, 1/3 savings and investments, 1/3 business (I run a small but reasonanble profitable business as a sideline from my day job.) The good thing about my business is that it is very low maintenance, and the returns are high compared to investment- so although it doesn't bring in a fortune per annum, the yield is +100%, so therefore I do not include it in the investments savings 1/3.

So I'm thinking either hold on now and finally buy the right property (ie stretch to find something very nice at the bottom of the crash- when it comes) or buy something horrid and cheap that gives an income.

The plan is then to attack a smallish mortgage in the same way as one would hopefully attack a large credit card bill, until it is paid off. At that point you can then upgrade property (with another reasonable priced mortgage) to the next level and then do the same again. Doing things this way should keep one on "the right side of the curve."

But I want to know can the 10% overpayment per annum be got around so as to get the balance down quickly?

Thoughts anyone?

Offset mortgage would achieve this, but the rates won't be as good as other deals.

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Offset mortgage would achieve this, but the rates won't be as good as other deals.

Offsetting mortgages can be good value, IF's (for example) start at 0.74% above base rate for the term and only cost £199 startup fee.

Most of the cheap interest rate deals now have large setup costs.

If you have lots of savings, it can really bring down the interest you pay. Really helpful if you have large income and less regular out-goings.

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But I want to know can the 10% overpayment per annum be got around so as to get the balance down quickly?

I don't understand. Unless one is locked into to a mortgage product by a penalty, you can pay whatever you want to reduce your mortgage.

In a low inflation world is is good to reduce debt.

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Guest KingCharles1st
I don't understand. Unless one is locked into to a mortgage product by a penalty, you can pay whatever you want to reduce your mortgage.

In a low inflation world is is good to reduce debt.

All mortgages I have enquired about state a maximium repayment of 10% of the outstanding balance per year- I certainly couldn't afford to pay ALL the mortgage back in one go.

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All mortgages I have enquired about state a maximium repayment of 10% of the outstanding balance per year- I certainly couldn't afford to pay ALL the mortgage back in one go.

Are you talking about say a fix for 2 years at x% and you can overpay with 10% in each year without penalty. If it is a floating rate I do not know of anything stopping the paying off entirely if you wish in any year.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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