FinancialBliss: My mortgage free journey…

OK. As the year is drawing to a close, I’ve been working on some mortgage numbers and targets for next year. Already have a figure in mind, but I’ve been using this little chart to plot not just next year but the remainder of the challenge.

I’ll attempt to describe it first, then I’ll put the picture towards the end of this post.

I’m presuming you’re starting a new sheet:

In cell A2, enter “Year”
In cells B1 and B2 enter “Ending” and “Balance”
In cells C1 and C2 enter “Reduction” and “Required”
In cells D1 and D2 enter “Interest” and “Charged”
In cells E1 and E2 enter “Interest +” and “Reduction”
In cells F1 and F2 enter “Monthly +” and “Payment”
In cells G1 and G2 enter "Standard" and "Payment"
In cell H2 enter "Overpayment"
In cell A3, enter 2008.
In cell B3, enter your year end balance for 2008.

In A4, enter: =A3+1
In B4, enter: =B3-C4
In C4 enter amount you want to reduce mortgage by in 2009
In D4, calculate interest for 2009: =AVERAGE(B3:B4)*0.0479

Note: Mortgage rate is 4.79% - change to your own rate

In E4 add reduction and interest, enter: =C4+D4
In F4, determine the monthly payment, enter: =E4/12
G4 downwards: enter your standard monthly payment.
H4 downwards: enter =F4-G4

If you’ve followed the above, it should look something like this:


So this is telling me (roughly), that if I want to reduce my mortgage by 10k in 2009, I’ll need to pay 12,610.55 as I will be charged 2,610.55 over the course of the year in interest. This equates to a monthly payment / overpayment of 1,050.88

Note: This isn’t going to be massively accurate, as it’s taking the average mortgage from just two values and estimating the interest, but it’s another little sheet to try out.

Oh, and you didn't think I'd give out the 2009 objective just yet did you? - the 10k's are just examples.

Please do let me know if you’ve tried it.

Financial Bliss.

nursefrantic wrote: »

Hi all, only 10,645.54 pounds to go on my mortgage. Could someone explain to me how you work out the interest?
10,645.54 + 3.75% I am paying 1,201.40 per month

Hi nursefrantic.

Nice small mortgage there

Multiply your mortgage balance by the rate:

10,645.45 * 0.0375% gives 399.21 per year in interest.

Dividing the yearly amount by 12 gives 33.27 a month in interest charged
Dividing the yearly amount by 365 gives 1.09 a day in interest charged.

Note: These are approximations as you've gave me a snapshot mortgage amount.

Your 1,201.40 a month payment is yielding a net reduction of 1,168.13 off the capital as you're being charged 33.27 in interest per month.

Guess you mean you wil be mortgage free in 2009 though?

I'm guessing you'll be mortgage free in another 9 or 10 payments. Difficult to say without access to more data

Financial Bliss.

Quick post. I've added two new columns to my earlier graph.

G4 downwards: enter your standard monthly payment.
H4 downwards: enter =F4-G4

This will break the monthly payment down between your standard mortgage payment, ie the one that is dictated from the schedule you got from your lender and the overpayment required to "top up" your standard payment to the monthly payment required to attain the reduction goal.

I'm sure you lot understand the graph - my wording leaves a little to be desired though, I think!

FB.