OLTB wrote:I think the most likely use of (very) limited spare cash would be to chuck a few quid at getting the mortgage down as I'm sure that once that is repaid, and your home is your own, life becomes a whole lot easier! Not too sure what a few quid at the mortgage actually saves in real terms though...
I made a spreadsheet, I think the columns were something like
Date
Total amount left
Monthly amount paid
Interest rate
Interest amount
New total amount left
One off funds added
I probably could have done without one of the total columns, but anyway. It was fairly belt and braces, and used to drift off course as I was working out interest monthly, and it was actually calculated daily.
I used it to model changes to interest rates, but also used it to model changes to monthly payments, and add bonus payments/one off payments, and see what happened to the end date, what date the new total amount left went negative. You could also see the effect of the compound interest over time, and with one off payments, e.g. if you paid off £1000 in one go, and it had made £1100 difference by the end - I'd just "earned" £100! Or if you up your monthly payment by £25, it knocks x months off the end of your mortgage.
Basically felt I had to do this as we spent our savings and some poorly performing endowments on an extension, so we owed the mortgage co £90k (yes, going back a bit) and had no savings vehicle or fund to pay it back.
The spreadsheet focussed the mind. Almost became slightly addictive. It worked a treat anyway, we paid it off I think 2-2.5 years early.