I fixed the heat and I liked it

[ailbhe]

It's all warm now. I R Genius. The children are warm and I've cooked them breakfast and lunch, done a load of laundry and a load in the dishwasher, added the meat and hot water to the slow-cooker full of veg Rob prepped last night, et cetera et cetera et cetera. I even tidied the kids' room, which will just show you how motivating heat can be.

I'm still trying to decide whether to call the bank and change our mortgage to reduce the payment and extend the term. We did get it with the specific backup plan of extending the term if we ever needed to; I can't decide whether now is that time.

Comments

[clanwilliam.livejournal.com]

Unless you're in severe difficulty, I wouldn't. Pay off as much as you can while interest rates are low. There may be a point at which rates go a *lot* higher, which is when you'd want the option to be able to reduce capital payments. And the more you pay off now, the less interest you'll have to pay when rates rise again.

[ailbhe]

We've been living in our overdraft for a while and I'm very uncomfortable with it.

[clanwilliam.livejournal.com]

In that case, yes, I'd sit down first and work out how much a difference you need to make and then talk to the bank. Apart from anything else, unless you have an offset, your overdraft is much more expensive.

[the0lady.livejournal.com]

What she said. Unless and until you actually can't meet your existing mortgage payments, your priority should be to pay off as much as you can as quickly as you can, speed being of the essence not just because interest rates are currently low, but also because it will reduce the overall amount of debt.

With interest rates and oil prices so low, it's inlikely that you are ignificantly more cash poor than this time last year, anyway, so why now?

[ailbhe]

The cost of food has gone up so much that we're overdrawn every month. Debt and I don't get on at all well.

[naath.livejournal.com]

Are you getting *more* overdrawn? or was there one really bad month that set you back? If you are getting steadily more overdrawn then you need to reduce your mortgage payments, if you aren't then you don't really.

If you do choose to reduce payments now, try to go for something that will let you overpay without penalty the difference between current payments and new payments so that if (when!) your financial circumstances improve you can pay off faster again without going through the pain of remortgaging.

[ailbhe]

I *think* we might be beginning to hold our own after months of getting more and more overdrawn. We have just had Christmas, after all, and the expensive pre-Christmas train travel.

[naath.livejournal.com]

It might be worth trying to cling on then? Perhaps the mortgage people might be happy with you making a reduced payment in one month (especially if you have previously overpaid at all) to allow you to shove the "end of month" balance into the black so you can be more comfortable with it - that would obviously lengthen the mortgage but perhaps by less than agreeing a lower monthly payment for the forseeable future (or perhaps not, depends how much by I suppose).

[ailbhe]

Oh - and I always go for no-penalty overpayments, whenever I juggle the mortgage; we've reduced the term a few years already that way.

[(Anonymous)]

Don't know who your mortgage is with, but can you get back some of the money you've overpaid? We're with the Nationwide, and anything we overpay can be drawn back down if necessary. If you got back a little chunk you could reset your baseline?

Alison

[the0lady.livejournal.com]

A mortgage is also debt - lots and lots of debt. There's no point making it bigger unless it's absolutely unavoidable. While it is often true that oversrafts have punitive interest rates on them, it's not a universal rule - I have a 0% overdraft for example. I can't help you with the actual maths - numbers are not my forte - but it's worth while looking at the current and *eventual* costs of one type of debt vs. the other very carefully.

[ailbhe]

I think I'm going to see how things are at the beginning of *next* month. The pit of my stomach is happier about secured debt than unsecured but that's not enough, on its own, to change the mortgage back to the original end-date.

[the0lady.livejournal.com]

Fully agree.