Mortgage Free by 55

VDOT47 · 30 October 2017 at 2:32PM

Hi all,

As the title would suggest, my aim is to be mortgage free by 55! Having read through a few diaries on here, I thought that starting my own might help me to keep focussed.

Right, background info! I am 35, OH 32 and DD 2. We moved house earlier this year, with a mortgage of £269,995 (with fees). We are on a 25 year mortgage with an initial 5 year fix at 2.19%, meaning repayments of £1169.xx per month.

I have just registered for online banking, so once the passcodes come through in the post I will find out the exact balance, but I estimate we are currently on c.£264,000 with a repayment date of Feb 2042!!

I don't intend to do a full SOA at this stage (maybe in the future) but will say that we are in the fortunate position that we can currently put £550 pcm into regular savers and have current easy access savings of c£7000.

The aim over the next 12 months is to get the savings up to £15,000 (from the regular savings accounts maturing and also from a bonus I should get from work next summer) and keep that as our emergency fund. From that point, whenever a regular saver matures (or I get a bonus) I intend to stick that directly into a lump sum overpayment, unless the emergency fund needs topping up of course (which it will do, as we need to do a couple of bits and pieces to the house still over the next couple of years).

In the meantime, I intend to make ad hoc overpayments as and when possible, hopefully averaging about £100pcm.

My motivation for this is of course to be mortgage free by 55 in order to then make saving for retirement easier (I have a work pension but not much else, although OH runs her own business which hopefully would have value when we reach retirement or could be passed to DD if she wanted to run it), but in the interim it is to allow us to build up as much equity as possible so as to be able to move again within 5 years.

The reason for this is twofold:
1) We always intended that this move was another step on the ladder, rather than our 'forever' home, and we originally thought we would live here for 10 years then move;
2) However, we (well, I in particular) are not happy where we have moved to. The area is SO noisy throughout the day (and during the evening over the summer too) with children shouting and screaming and frankly the noise is doing my head in! Also, we are in a semi so there is some noise through the wall too.

Think that is enough to start with, any comments would be welcomed and I will hopefully post a little more in due course!

Trixysticks · 30 October 2017 at 3:59PM

Welcome VDOT47!

I will join you on your journey, I'm in a similar boat- 29 with £138,000 to clear and an emergency pot I'm frantically trying to build! Impressed with where your savings are; I hope I can get to that point!

Your comments about your home made me smile. DH insists we are in our forever home but a year after buying our lovely terraced town house and I'm dreaming of a remote detached house in the woods...far away from everyone!!

ChipAway · 30 October 2017 at 4:39PM

Hey, your mortgage size and ambitions to pay it off sound similar to mine. Good luck with it! I'll be following your progress.

VDOT47 · 31 October 2017 at 10:41AM

Hi Chip - yes, your mortgage sounds almost identical in size to ours!

I have been having a think overnight at things we can do to make ad hoc overpayments, without having to go completely frugal (I know this may contradict the general ethos of these boards, but we don't want to go completely without now in order to save a few months of mortgage payments in 15/20 years time!):

1) Any cashback through our bank account
2) Reduced nursery fees (already slightly lower now DD is 2, and will come down again in Jan 2019 being the start of the term after she turns 3 and becomes entitled to the 'free' nursery hours)
3) NCT sale proceeds
4) Online surveys (although neither of us have much time for these, but the odd one here and there will help)
5) Selling old toys and other unwanted junk from the garage/loft on Facebook or similar selling sites
6) Any refunds from gas/electricity supplier, as I hope that we can get ourselves into a credit situation
7) Cashback on utility and insurance switches
8) Cancelling my current £10pcm iphone insurance (this is a priority)
9) Any spare money in our joint account at the end of each month
10) Any pay rises can go directly to overpayments

That's a few things to be getting on with!

greent · 31 October 2017 at 11:02AM

Hello and welcome

When paying off our mortgage I rounded up our monthly DD (so in your case I'd round from £1169.xx to £1200 - most mtge companies are happy to take a larger DD

) and then made ad-hoc payments of cashback, NNS sale monies, flebay monies etc. I also had a piggy-bank where all the shrapnel change would be saved (and £2 coins) and would pay this off too (I started by bagging it and banking it and then started spending it in the self-service tills at supermarket every month or so and rounding the amount up spent and paying that off - so if I spent £28.31 of change I'd make an OP of £30, etc) - lots of little ways to make extra payments (which really do add up!) without feeling deprived. Plus once you have online access to your mortgage, it becomes slightly addictive seeing all the little payments go through the account

We're doing it slightly different with BTL mtge, as we have other priorities too - and a big car loan and a new kitchen to pay for - but plan on upping the ante this time next year

Whilst your house might seem noisy now, things might change in a couple of years as others move/ neighbourhood children grow (teenagers are - in my experience- far quieter than smaller children!

)

VDOT47 · 31 October 2017 at 11:32AM

Thanks Greent - I like the idea of rounding up the DD, as I don't think we would really notice the additional £30.xx going out each month. We have a piggy bank for loose change, so will occasionally use that to make overpayments too.

Looks like you did fantastically well to pay off your mortgage 10 years early!

I had a quick play on the overpayment calculator, and estimate that if we stayed where we are now, then even without taking into account any future pay rises/bonuses/possible reductions in interest rates when remortgaging due to having a better LTV, we could pay off the current mortgage by 2031 (and I would hope to do it faster than that) but we would still be in a house which wasn't our dream forever home, so it is likely we will do what we can to reduce it in the next 4/5 years, then move and borrow more (!) and then work to pay that off ASAP (hopefully by 2037, which would tie in with the title of the thread!).

louloubelle79 · 31 October 2017 at 9:29PM

All the best on your MF journey

VDOT47 · 2 November 2017 at 2:23PM

It's hard work trying to cutback on outgoings isn't it? Seems like every day there is something or other that is flowing out of our account! The last few days for example:
- new bathroom scales after the previous ones broke
- we've decided we need a dimmer switch for the living room lights as they are far too bright (at least this might save electricity in the future though)
- birthday presents for mother and also a son of a good friend
- decided we need a draft excluder for the porch door into the living room (the porch is like an ice box and it is not even deep winter yet!)

On the plus side, after a good 6 months at work, I am coming up to a salary review ... so fingers crossed!

VDOT47 · 6 November 2017 at 10:46AM

Well, a mixed weekend.

On the plus side, online banking is now set up, so I could see our current balance sitting at £264,4XX (can't remember the exact amount).

On the down side, when we tried doing a sample payment to the mortgage account, our bank said it couldn't process the payment so I think the 'account number' for the mortgage account isn't a faster payments banking account number. Will need to ring mortgage co to ask about this.

I've decided my first aim is to get the balance below £260,000 by the end of March 2018 (which would be a couple of months before it will naturally get to that figure).

greent · 6 November 2017 at 1:25PM

Are you maybe using your mortgage account number? - Often you need to have a different account number and then the mortgage account number as a reference number.

If that's the case & you are with Lloyds mtge co the info is on several threads on here, or I can let you have it

VDOT47 · 6 November 2017 at 1:53PM

I think that is the problem greent - I will ring mortgage co (not Lloyds) and ask them to clarify.

Also seemed to discover that my plan to increase our DD to £1200 pcm won't work either (certainly not through online banking, as there is no option to change DD) - they don't like to make it easy to overpay do they!

Mortgage Free by 55

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