New Year Resolution V
Bit of a break and onto a nice financial resolution which is not entirely in my control and therefore perhaps shouldn't be a resolution but, what the hell . . .
5. Get the mortgage down to a less scary number
Our current mortgage started out a couple of years ago when we moved from a two bedroom flat to a four bedroom house as a scary number. It has been reduced by about 13% since then but I would sincerely like to get it under 50% of the house value. By a combination of a good year at work and the finalisation of a relation's estate, it looks like this will be achievable in the next couple of months and, coincidentally, our current mortgage deal finishes in May.
The goal for this year is to get onto a good five year fixed rate mortgage which the reduction to 50% LTV will help with hugely. I'm not overly concerned about interest rates moving upwards in the short term and I know that I would be able to pay the capital down a fair bit quicker if I went onto a tracker again. However, with professional hat on, the risks on the downside of getting the interest rate prediction wrong are both unquantifiable and pretty high as the repayments could become unaffordable. The benefits of taking a tracker, on the other hand, are completely quantifiable and not that big.
My real aim is to get the mortgage as close to being cleared as possible by the time a) I'm 40 and b) the fixed rate comes to an end. This seems both nice from a psychological point of view and also in terms of long term financial planning. Who knows where interest rates will be in five years time and being entirely debt free will allow a certain amount of smugness should they be back at 1990 levels.
As I said, this one is not something that I have to work very hard on as it's largely done; it's more a question of getting my finger out to actually do something, trusting that work pays up and the good mortgage rates don't disappear in the next two months.
Last one to follow at some point (probably before March)
5. Get the mortgage down to a less scary number
Our current mortgage started out a couple of years ago when we moved from a two bedroom flat to a four bedroom house as a scary number. It has been reduced by about 13% since then but I would sincerely like to get it under 50% of the house value. By a combination of a good year at work and the finalisation of a relation's estate, it looks like this will be achievable in the next couple of months and, coincidentally, our current mortgage deal finishes in May.
The goal for this year is to get onto a good five year fixed rate mortgage which the reduction to 50% LTV will help with hugely. I'm not overly concerned about interest rates moving upwards in the short term and I know that I would be able to pay the capital down a fair bit quicker if I went onto a tracker again. However, with professional hat on, the risks on the downside of getting the interest rate prediction wrong are both unquantifiable and pretty high as the repayments could become unaffordable. The benefits of taking a tracker, on the other hand, are completely quantifiable and not that big.
My real aim is to get the mortgage as close to being cleared as possible by the time a) I'm 40 and b) the fixed rate comes to an end. This seems both nice from a psychological point of view and also in terms of long term financial planning. Who knows where interest rates will be in five years time and being entirely debt free will allow a certain amount of smugness should they be back at 1990 levels.
As I said, this one is not something that I have to work very hard on as it's largely done; it's more a question of getting my finger out to actually do something, trusting that work pays up and the good mortgage rates don't disappear in the next two months.
Last one to follow at some point (probably before March)