the richest man in atherstone

A while ago, I wrote that one of my goals for 2008 was to review my mortgage, gas and electric suppliers and see if I could get a better deal elsewhere.

Well, I jumped right in and used the excellent energy price comparison website Energy Helpline to find the cheapest supplier. The top result was Atlantic Electricity & Gas, so I switched there and then.

Over the next couple of weeks I received letters from them to formalise the signup process, however it wasn't until recently that I discovered that although most energy suppliers have increased their prices, Atlantic hadn't yet but were due to do so at the end of March. So, although they were the cheapest when I checked, it wasn't a level playing field!

So, I made a bit of a cock-up due to my lack of proper research - a lesson learned!

Fortunately, Atlantic Electric & Gas are still one of the best buys for my circumstances, however they're not the best. I need to check my paperwork to see if I am tied in to a deal with them and for how long. If not, I'll probably switch again in the Summer.

I recently wrote that, as part of my expenditure review for 2008, I would be looking to remortgage to a better product.

I spent a lot of time in March trying to find mortgage that improves upon the 6.09% Standard Variable Rate I am currently getting with ING Direct. I checked a number of price comparison websites and consulted with ten mortgage brokers but none of them have a mortgage that I believe to be better.

My personal view is that basic mortgage rates won't rise too much higher than they are at the moment so I was looking for something that was around quarter of a percent less than the 6.09% I was on at the moment and with no fees. I also wasn't too bothered about it being another standard variable.

Despite hunting high and low, there doesn't seem to be anything better than the deal I have at the moment. The mortgage brokers I spoke to were actually more of a hindrance than a help. A couple went through a lengthy process of collecting my details before telling me they couldn't offer me anything and the others lured me in with their promises of superior products that weren't available to the general public and then went on to offer me mortgages that were significantly poorer than what I currently have. There was also a certain amount of what I would describe as 'scaremongering' with regards the UK economy. One broker even advised me that if I didn't fix at 7% right now, I'd be paying over 10% by the end of the year as the world goes into economic meltdown!

On the whole the advice and experience was poor and I went away feeling very sorry for the people that don't know better and are convinced to remortgage. It will be a long time before I use the 'expertise' of a mortgage broker.

So, I will be sticking with my current mortgage for a little while longer. Although it's not the absolute best, it's at the right end of the scale and with no redemption fees, it will be easy to change once a significantly better product comes along. Plus there's an unlimited overpayment facility which I plan on making the most of this year.

Of course, I'm just a common bloke and these brokers may be completely right and I completely wrong...but I doubt it

One of my goals for this year is to review our utility bills and see if we can get better deals by changing our providers. The last time I overhauled our expenditures was two years ago, so things are about due a change.

First of all, here's a list of the expenses that we are unable to reduce along with the reasons why:

• Grocery bill - We currently pay around £300 per month on groceries for a family of five. This has more than doubled since we brutally slashed our shopping budget around 18 months ago but the kids are growing up and with the extra addition of our 1-year old comes extra expense in terms of nappies and associated baby products. Also, our two first-schoolers are constantly being invited to friends parties, which requires the customary card and present. My wife and I have looked at this and unfortunately decided that we can't knock it down any lower.
• Telephone and Broadband - Toward the end of last year, I signed an agreement with my telephone and broadband provider (Plusnet) that tied me into a contract for twelve months in exchange for a £30 discount over the year (this works out at around one free month). Consequently, I cannot change provider this year. Judging by some of the deals I've seen advertised I'm starting to regret tying myself in but we live and learn
• Council Tax - Although it is possible to get a council tax band regraded (see this great article at MoneySavingExpert), mine is already in the correct band (around £130 a month).
• Water - Our water bill is fixed and not based on consumption and it is not possible to change provider so, again, there's not a lot I can do to reduce it. It costs around £18 per month.
• Mobile Phone - I spend about £2 a month on this contraption so there is not much room for improvement.

So that leaves me with the following expenditures that I can potentially make improvements on.

• Gas - I'm currently with NPower for my gas, as they offered me the best deal two years ago. Since the recent energy price rise (and possibly even before that) I believe they have become uncompetitive, so I'll be looking to see if there are any better offers on the market. I currently pay £60 per month, double what I was paying last year!
• Electricity - Ditto for my 'leccy bill. I'm currently with NPower and pay £43 each month.
• Mortgage - I'm currently paying ING Direct's standard variable rate of 6.09% AER for my mortgage, which costs me a smidgen over £420 per month. It has never been the most competitive rate but it was suitable for my needs when I took it out nearly a year ago when we moved house. I knew I'd probably have a fair bit of cash left over from the move but wasn't sure if I would need to use it for DIY on the new property. Therefore I had to keep the cash liquid but still have the option to overpay the mortgage if needed. ING's mortgage allows unlimited overpayments and no redemption penalties, so I applied for it with the view that I could keep it for a year until I knew where we stood financially before changing to something with a better interest rate. That time has come

So, there it is. To complete the second goal on my list, I need to find the best deals for my Gas, Electric and Mortgage and swap. I'm guessing it will only take around a week to do the research and I should be able to make the changes before the end of April.

Having settled into our new home and got used to our new mortgage, we've decided to make a concerted effort to overpay our mortgage to reduce the overall amount of interest we pay and reduce the term.

Ideally, we would like to pay it off as soon as possible, but doing this also gives us a bit of a cushion should we fall upon hard times - overpaying now will give us the option to take payment holidays in the future.

We chose a mortgage with ING Direct because it has a decent variable interest rate (5.8% at present) and gives us the flexibility to make overpayments as and when we want. It also has no upfront fees (the valuation fee was returned upon completion) and no leaving fees. The lack of redemption penalties was important for us in case ING Direct suddenly made their Standard Variable Rate uncompetitive once they had their quota of customers like they did with their savings account. It would seem inertia is a good money-maker for banks!

When we moved house a couple of months ago, our mortgage was £64'950. This month we paid off an additional £1000 of the loan with cash left over from the money we put aside for moving expenses - I find it's always best to over-budget.

On top of that, two monthly repayments of just over £400 have reduced the debt to £63'741.

After a little bit of jiggling with our accounts, we have budgeted a further £150 per month of mortgage overpayments for the rest of the year. This should reduce the capital by around a further £1000 by Xmas.

(By the way, I used my MORTGAGE CALCULATOR to help with the calculations. As well as working out your monthly payments and showing a complete amortised schedule, it will also show the effects of making overpayments to your mortgage - and best of all, it's free to use.)

Whilst I was playing with the figures, I got to thinking about how the interest rates on my savings compare with the interest rates on my mortgage. I then realised that unless my savings and investments interest rates can at least equal my mortgage interest rates, the money would be better spent on my mortgage because the interest earned would be less than interest spent. This is something I've never considered before and puts forward a good argument for putting more money into my mortgage.

Well, that's something to think about some more and discuss another day...