Now that we've waved goodbye to 2022 and can look forward to 2023, it's time to reflect on some of the finances over the past year.
To start with I've had a look back at our mortgage overpayments for 2022! I know there's some debate among personal finance bloggers over whether it's best to overpay the mortgage or invest the money instead. For me and my husband overpaying works for us, but I'm very aware that it's not for everyone.
Last year our total was just over £900. My target had been £1000 a year. And this year we managed it!
The payments
I keep track of our overpayments every month just though a notepad document on my laptop. They're a combination of a standard overpayment made at the beginning of the month, and then account sweeps several times a month and a few cashed out side hustles during the year.
Our monthly payments this year were:
Jan - £133.42
Feb - £134.77
Mar - £126.63
Apr - £134.91
May - £129.56
Jun - £197.58 < This included a train delay repay claim.
Jul - £132.99
Aug - £138.59
Sept - £128.01
Oct - £133.51
Nov - £130.91
Dec - £177.02
Total - £1697.90!
How we did it
You may be wondering how we not only hit the target, but smashed it (yes, to me that's us smashing our target).
The key aspect was that our previous mortgage deal ended at the end of 2021 and our new one started in January 2022. We stayed with our mortgage provider but managed to get a lower interest rate thanks to a combination of lower interest rates at the time along with our house value increasing, which combined with our overpayments meant we'd shuffled down an LTV bracket.
We weren't struggling with our previous mortgage payments. Reducing them wasn't freeing up money that was essential for anything else. So when our payments reduced from £636, to £576 we decided to make regular monthly overpayments that meant we were still paying our previously monthly amount.
On top of that I also continued with account sweeps, and also used some side hustle money that trickled in.
If we wanted to hit £2000 in overpayments we would have needed to make regular payments of £167 a month. This wouldn't be an over reach but the past year included buying a new car (a necessity as mine kept breaking down), repairing my emergency fund, having a weeks holiday, and starting to save for baby things.
The arrival of baby, in spring 2023, will also mean we can't commit huge amounts to the mortgage in 2023 as we're not sure what our budget will look like with nappies and things to pay for. So we'll take a "steady as she goes" approach and continue what we've been doing.
I'm reluctant to give myself any big challenges this year when it comes to finances, as having a baby will be challenge enough. I suppose if I want to do anything it's simply try to beat this years total, but if I don't make it then I won't stress out. Baby will be the focus, everything else is optional!
2 comments:
Well done on the overpayments. I overpay my mortgage and can see the way it reduces the interest.
This is so interesting. We're hoping to pay off our mortgage sooner than the remaining 26 years we have on it. We currently pay a fixed term of two years and tend to go for fixed terms every time we renew. But this coming year we're up for renewal but want to over pay a portion first. We're just not sure how that works. But I know it that overpaying, even by a few hundred, will help us become mortgage free by the time I'm 45 (15 years). We're planning on speaking with our bank in around September to ask their advice on how to best do this.
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