7 Year MF Plan

Cicatriz_2 · 12 December 2017 at 4:03PM

With another year around the corner, and the current one disappearing barely noticed, I thought it about time to start to start being serious about being mortgage free.

Currently I’m at £97,700 of a £112,500 mortgage, 21 years remaining @2.24%

I’ve made a few overpayments so far, which have mostly been focusing at hitting LTV thresholds* for better rates. The early costs for furnishing and supplying a house from scratch are over and no [good] excuses left to not boil the mortgage off as fast as possible.
I’ve got a 6-month emergency fund built up and am now paying £200 in overpayments per month. Crunching the figures, over the coming months I should be able give myself £100 per week pure spending money and overpay £700 per month and be rid of it in 7.5 years. If I include excess in there, I might just manage it in 7.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 0

Monthly Income Details
Monthly income after tax................ 2055
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 10
Total monthly income.................... 2065

Monthly Expense Details
Mortgage................................ 481
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 80
Electricity............................. 38
Gas..................................... 0
Oil..................................... 0
Water rates............................. 20
Telephone (land line)................... 18.99
Mobile phone............................ 25
TV Licence.............................. 12.12
Satellite/Cable TV...................... 7.99
Internet Services....................... 14.99
Groceries etc. ......................... 120
Clothing................................ 15
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 10
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 10
Contents insurance...................... 21
Life assurance ......................... 0
Other insurance......................... 31
Presents (birthday, christmas etc)...... 25
Haircuts................................ 6
Entertainment........................... 90
Holiday................................. 75
Emergency fund.......................... 0
Bank account charge..................... 5
Service charge.......................... 14.5
Ground rent............................. 16.5
Total monthly expenses.................. 1137.09

Assets
Cash.................................... 6000
House value (Gross)..................... 130000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 136000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 97700....(481)......2.24
Total secured & HP debts...... 97700.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Total unsecured debts..........0.........0.........-

Monthly Budget Summary
Total monthly income.................... 2,065
Expenses (including HP & secured debts). 1,137.09
Available for debt repayments........... 927.91
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 927.91

Personal Balance Sheet Summary
Total assets (things you own)........... 136,000
Total HP & Secured debt................. -97,700
Total Unsecured debt.................... -0
Net Assets.............................. 38,300

Created using the SOA calculator at stoozing.
Reproduced on Moneysavingexpert with permission, using Firefox browser.

The SOA shows slightly different figures to my estimates as it wants monthly costs/budgets for entertainment, holidays etc. Perhaps no bad thing, but following this lead, I have more spare cash than expected.

*A possible tip here. When I first came to switch mortgages with the Halifax at the end of the initial 2 year fixed period the first thing I did was check the websites automatic tool. I wasn’t expecting too much from this but I was very pleasantly surprised to see that my house had been valued £150,000, which is significantly higher than its market value (£25k more than paid). This resulted in a better LTV and consequently rate. A colleague saw something similar with a different bank – we don’t live in a place with a 10% YOY house price inflation so I’ve no idea what’s happening here. Moral is to check what the website says before going to a branch.

pinkypig · 12 December 2017 at 10:21PM

You look super organised :beer: The very best of luck on your journey xx

getmore4less · 13 December 2017 at 5:16AM

Does the SOA feel right, do a spend diary and a last 12month analysis to see where the money really went.

Halifax are not a cheap lender for small mortgages shop around at the end of your current deal. eg. Nationwide

2.24% is quite high for a 75.15 LTV should be under 2% get under 75% and can be looking at around 1.75%

£97700 7 years
@ 2.24% needs a payment of £1,258 interest £7,951
@ 1.75% needs a payment of £1,237 interest £6,177

short term does not make a massive difference per month but saves approaching £2k over 7 years

Cicatriz_2 · 13 December 2017 at 11:05AM

The SOA isn't far off. I use moneydashboard and it can give accurate reports if the user is judicious enough in breaking down what cash withdrawals are used for.

This year has seen the final bits of furniture added to the house and also getting stung for four years of service charges (I blame Morris Homes incompetence, they blame my conveyancer for that) and completion of the six month emergancy fund.
It's perhaps a little low on entertainment costs but the remaining slack can go there if needed (but no more) after the £700 in overpayments.
I'm also overpaying on insurance, which I plan to fix as soon as its up for renewal. I meant to address that earlier in the year but the window coincided with a heavy workload period.

Point noted on the mortgage. I'll have to switch in 2 years to something more suitable anyway due to the 10% overpayment soft limit.

getmore4less · 13 December 2017 at 11:21AM

Good, if you have the history and it feels right an looks like you have a bit more might as well round the mortgage payment to £1200pm

Also a good idea to have a top up to the emergency fund as if you do use it you have to put something in then, if it gets too big you can overpay a bit more as a one off or use it to buffer any new planned spends.

Thing with the mortgage is if you get the rate down overpayment limits are less of a problem as you can get better rates saving.

juststuff123 · 13 December 2017 at 7:55PM

Good Luck. I'm sure you'll smash it!

edwink · 14 December 2017 at 4:49PM

Just to say the very best of luck.

We paid ours off some years ago and it has made our lives so much easier now. Well worth it if you can achieve it.:dance:

All the best

Edwink

Cicatriz_2 · 3 January 2018 at 1:43PM

Okay, Christams done for another year. Other than the fairly high food spend when family came over (mixed game from Booths*) got away with things fairly cheaply.

Some Wiggle vouchers will come in fairly handy as I get my bike ready for some winter cycling. No matter how much I try, I can't get along with an indoor trainer, so I might look at selling that.

2018 brings with it an immediate spanner in the works with a work related trip to the US that I couldn't really turn down. At the least it's meant a passport renewal (definitely an inefficient overpriced service...) and probably a lag on getting expenses back.

Still, I hopefully should manage that £700 target overpayment on payday.

*First year doing this, turkey is fine next time!

Betterthanever · 3 January 2018 at 2:35PM

I too am learning that "less is more" as far as Christmas food spending is concerned - no one is worried about what we serve up as long as it is yummy and there is plenty of it!

I'll be looking to clear my own mortgage in the same 7 years so I will follow this with interest! Good luck!

Cicatriz_2 · 3 January 2018 at 5:41PM

Thanks.

It's ambitious but doable. A lot will depend on my work situation which can definitely go either way. I'll definitely look at your progress and wish you the best of luck, too.

It was nice doing something a bit different for Christmas, but it's been done now. Hopefully expectations have not been raised too high for the future

sofarbehind · 3 January 2018 at 5:59PM

Hello!
Great to read your diary and SOA as we are in a very similar position, though my mortgage is a lot bigger. I'm replying to you here instead of on pinkpig's diary so I don't clutter up her thread. Thanks for taking the time to reply. You are right about batch cooking I know and your food spend is low. I have a half empty freezer waiting to be filled. I can make a decent chilli so will get off my bum and do that. I am thinking about buying a slow cooker and using it to batch cook. I'm a big fan of spicy food and the thought of walking in to yummy food is a good one. I have been and bought a lot of stir fry ingredients, that is quick, very easy and healthy. I have just bought ready made sauces but will look for some homemade Thai sauces. If I batch cook the sauce that will be a good start..

Your overpayments are amazing as a percentage of your income.

7 Year MF Plan

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