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  • FIRST POST
    • SWSEGirl
    • By SWSEGirl 12th Oct 17, 9:02 AM
    • 48Posts
    • 88Thanks
    SWSEGirl
    Mortgage free & able to live the dream!
    • #1
    • 12th Oct 17, 9:02 AM
    Mortgage free & able to live the dream! 12th Oct 17 at 9:02 AM
    Hi all,

    I've followed these boards religiously during my epic daily commute & had a thread over on debt free wannabe - although was terrible at keeping up with it

    My husband & I bought our first flat in London a year ago with 15% LTV & a mortgage of £322,000
    This seems to be miles higher than most people on here. We've got a 35yr term & are currently due to finish paying by time I'm 65 obviously the plan is to pay it off much sooner than this.

    We're both in reasonably well paying jobs & put roughly £1300 in savings a month, we've got a pot of £10k - but I'm now wondering if we should channel £1000 a month to a mortgage OP (this is the maximum OP we're permitted to make without charges). We're currently OP'ing by £200-£300 pm. If we OP'd by the maximum we could be mortgage free in 15 years!!!!

    Our ultimate plan would be to buy somewhere close to where we're both from & hold on to our London flat. This is obviously a long way off - but that's what we'd work towards. The problem is I cant work out if we should be paying off our current mortgage quicker or saving for a deposit.

    The added complication is that we would like to start a family in the next year - which will definitely impact one of our earnings & probably our savings pot

    At least this diary will help me stay accountable & help us acheive the end goal!
Page 1
    • SWSEGirl
    • By SWSEGirl 12th Oct 17, 9:10 AM
    • 48 Posts
    • 88 Thanks
    SWSEGirl
    • #2
    • 12th Oct 17, 9:10 AM
    • #2
    • 12th Oct 17, 9:10 AM
    A bit more info on our mortgage we're 1 year in to a 3 yr fix at 2.24%.

    I'm keen to start throwing what we can save at the mortgage now, especially as I'm nervous about interest rates rising by the time our term has come to an end.

    Recent money changes I've made are the basics - taking lunch into work, not spending money on clothes (before the January sales anyway )

    I'm trying to tackle both my & my husband's financial complacency (ie. Laziness) we need to shift our savings into a higher rate interest account for starters.

    I'm also keen we both switch accounts to First Direct & use the switching bonus to put towards Christmas.

    I'm just generally trying to become more mindful financially & hopefully I can apply this to our mortgage too!
    • pjcox2005
    • By pjcox2005 12th Oct 17, 9:18 AM
    • 478 Posts
    • 527 Thanks
    pjcox2005
    • #3
    • 12th Oct 17, 9:18 AM
    • #3
    • 12th Oct 17, 9:18 AM
    All the points you mentioned around financial discipline is a great start.

    There is no clear answer, and probably depends on whether you think you can continue having discipline to save and not access them if they are easily accessible.

    Personally I'd have a balance of overpaying the current mortgage slightly as you are but putting the majority in other savings options - start with high paying current accounts & regular savers at around 5%, and I'd then split the rest to start saving in peer 2 peer and a stocks and shares ISA (assuming you are already making pension contributions as if not that would come before it).

    For me, that gives greater flexibility for the future to access money if circumstances change, and for I'd expect you'll be getting higher interest than you pay on your mortgage (but worth checking).

    When you come to remortgage you could always pay off a chunk then if you need to get to a better LTV by accessing the savings you'll have set up.
    • SWSEGirl
    • By SWSEGirl 12th Oct 17, 10:43 AM
    • 48 Posts
    • 88 Thanks
    SWSEGirl
    • #4
    • 12th Oct 17, 10:43 AM
    • #4
    • 12th Oct 17, 10:43 AM
    Thank you pjcox2005!

    I hadn't really considered paying a chunk off when the time comes to remortgage - that is a really valid point.

    I think to secure a lower interest rate when the time comes to remortgage, we need to have paid off an additional 5% in equity - in order to get there we need o be paying £800 pm in overpayments, which I don't think we'll hit - although we are able to at the moment.

    I just have to hope that interest rates don't increase too much come 2019!

    Now to research and get ourselves organised on the savings accounts....
    • pjcox2005
    • By pjcox2005 12th Oct 17, 11:21 AM
    • 478 Posts
    • 527 Thanks
    pjcox2005
    • #5
    • 12th Oct 17, 11:21 AM
    • #5
    • 12th Oct 17, 11:21 AM
    [QUOTE=SWSEGirl;73250763]

    I think to secure a lower interest rate when the time comes to remortgage, we need to have paid off an additional 5% in equity - in order to get there we need o be paying £800 pm in overpayments, which I don't think we'll hit - although we are able to at the moment./QUOTE]



    It may be easier to hit than you expect as the other side of the loan to value calculation comes in to play, so as well as lowering the loan amount by overpaying over the next couple of years, you'll also probably have an increase in house value meaning you ultimately need to overpay less to make that 5%.
    • SWSEGirl
    • By SWSEGirl 12th Oct 17, 12:51 PM
    • 48 Posts
    • 88 Thanks
    SWSEGirl
    • #6
    • 12th Oct 17, 12:51 PM
    • #6
    • 12th Oct 17, 12:51 PM
    That's also a really good point, thank you! According to Zoopla (unreliable I know) our property has increased in value by roughly £8k in a year - so hopefully we can rely on a rise in the value to help us with interest rates. I just hope the current instability doesn't mean that prices drop.

    My first steps in maximising our savings & making a little additional cash here and there are as follows:

    Switch to First Direct – get £125 bonus
    Open Regular Saver Account w/ FD – start SO for £300 pm. (locked away for 12 months) = £3600 over 1 year = £180 interest.
    Start SO for £500 to Mortgage – call to check if amount can be split into 2 payments
    Put existing £10,000 svaings into high interest Harrods account (fixed for 1 year 1.9% = £190 interest)
    Put £400 pm into an easy access account

    This should make us around £800 in the next year if my calculations are correct - which would be a nice bonus!
    • Tropically
    • By Tropically 12th Oct 17, 8:21 PM
    • 158 Posts
    • 432 Thanks
    Tropically
    • #7
    • 12th Oct 17, 8:21 PM
    • #7
    • 12th Oct 17, 8:21 PM
    Hello! I am in London too. £318,000 over 25 years! Welcome, good luck.
    Mortgage started at £318,000 in June 2016. Original MF - 2041
    2017 OPs: £7000/£7000
    Mortgage in Nov 2017 - £297,808
    • SWSEGirl
    • By SWSEGirl 12th Oct 17, 11:40 PM
    • 48 Posts
    • 88 Thanks
    SWSEGirl
    • #8
    • 12th Oct 17, 11:40 PM
    • #8
    • 12th Oct 17, 11:40 PM
    Hello Topically! Do you live in SE London by any chance? I have to say seeing someone else with a similarly terrifying debt is quite comforting! Xx
    • pjcox2005
    • By pjcox2005 13th Oct 17, 3:53 PM
    • 478 Posts
    • 527 Thanks
    pjcox2005
    • #9
    • 13th Oct 17, 3:53 PM
    • #9
    • 13th Oct 17, 3:53 PM
    Can't get the full £10k but may be worth considering Tesco or Nationwide current accounts paying 3% or 5% respectively on I think £3k and £2.5k balances. You could basically open second current accounts to benefit from the rate.


    Ratesetter as an alternative which is peer to peer lender has 4.5% rate currently. Higher risk as not protected under FSCA but it is regulated and has had no issues to date. If you're referred in you'll get £50 for £5k invested too, so then refer your husband for the other £5,000 and you'll get another £50 each. So you'd get more like £600 in the first year rather than £190 with Harrods.

    Edited to say it appears to now be £100 for the new member so £700 in total with interest for the first year
    Last edited by pjcox2005; 13-10-2017 at 7:00 PM.
    • Tropically
    • By Tropically 13th Oct 17, 4:38 PM
    • 158 Posts
    • 432 Thanks
    Tropically
    I do live in SE London! It was the best option for buying a house, as I lived SW before, in Wandsworth, and couldn't find anything I liked to buy.
    Mortgage started at £318,000 in June 2016. Original MF - 2041
    2017 OPs: £7000/£7000
    Mortgage in Nov 2017 - £297,808
    • SWSEGirl
    • By SWSEGirl 14th Oct 17, 9:10 AM
    • 48 Posts
    • 88 Thanks
    SWSEGirl
    Blimey - thanks pjcox! That sounds like sound advice - I'm having a financial management day today - so I'll look into all those suggestions - thank you!

    Nice to know you're in the neighbourhood Tropically! It's hard leaving the areas you're familiar with, but I'm fond of SE London now & glad that my mortgage is affordable (despite being really high!)

    So I'm having a morning of financial shuffling - applyimg for the best accounts etc. I'm also going to draft an email to my employer detailing the reasons I should get a payrise in the new year, so fingers crossed.

    I also need to reassess our joint budgets - my husband has had a payrise & my student loan is gone, so we're £600 a month better off than when we bought our flat - although goodness knows where we've been frittering that!
    Original Mortgage as of September 2016 = £322,999 Paid off by 2051
    Current Mortgage Balance as of September 2017 = £316,649
    Emergency Savings = £9,661 £10,000 £10,500 £11,200
    Mortgage OP's Total = £1500 £2200 £2900
    • SWSEGirl
    • By SWSEGirl 16th Oct 17, 8:42 AM
    • 48 Posts
    • 88 Thanks
    SWSEGirl
    How is it Monday already? As I've been finding the past couple of months - there seems to be far too much month at the end of my money....I need to look back over my last few bank statements to try and understand why.

    This week I'm determined to take my lunches into work - I actually have a voucher for somewhere today - it pays to complain on twitter!

    I need to do some batch cooking this week, in order to avoid the temptation to buy lunches after payday.

    I've got a couple of birthdays coming up which I need to budget for. And Christmas of course.

    When it comes to January I'm going to excersize the power of saying no...I need to reduce the number of social engagements, drinks, dinner etc that I go to!
    Original Mortgage as of September 2016 = £322,999 Paid off by 2051
    Current Mortgage Balance as of September 2017 = £316,649
    Emergency Savings = £9,661 £10,000 £10,500 £11,200
    Mortgage OP's Total = £1500 £2200 £2900
    • chelseablue
    • By chelseablue 16th Oct 17, 3:32 PM
    • 2,296 Posts
    • 2,822 Thanks
    chelseablue
    Hi, I'll cheer you on!

    My mortgage is quite high, currently £221,000. Its quite comforting when I find people with a bigger mortgage than me

    My last property was a 2 bed flat and when we moved the mortgage was down to £92,000. How I miss those days!
    Mortgage starting balance 26.02.16 £231,294
    Mortgage after Year 1 £225,078
    • spendinglikemad
    • By spendinglikemad 16th Oct 17, 3:43 PM
    • 211 Posts
    • 1,509 Thanks
    spendinglikemad
    Hey there - nice to see your update and big mortgage here too! Lots of economising to do here with lunches for work (usually leftovers but now trying to eat a bit healthier) I need to get through this week without buying anything non essential!!!

    SLM
    Family of 4 plus cat!
    • SWSEGirl
    • By SWSEGirl 23rd Oct 17, 3:28 PM
    • 48 Posts
    • 88 Thanks
    SWSEGirl
    So it's payday - and I'm resisting the temptation to spend.....!

    I have a couple of big expenses this month, my Mum has a big birthday coming up, and I have my brother's family coming to stay (5 of them in my 2 bed flat!!!) So I have done a big food shop to keep us going while they are here & invested in a few air beds. My best friend is due to have her first baby any day - so I need to get together a gift for her.

    I've also had my husband's family to stay over the weekend - so that always results in additional food & wine spends.

    One good piece of news - my husband got a pay rise at the end of last week, so that will be an additional £300 per month that we could throw at the mortgage - I just need to make sure we do & it doesn't get frittered on the everyday - I've actually worked out that we will be £1000 a month better off than we were at the beginning of the year - this is a combination of pay rises & both of us having paid off debts & student loans. The odd thing is I don't particularly feel any better off, or that it's any easier each month...even though I know we are incredibly lucky. I guess our debts are significantly reduced & our savings have increased, but even so, I'm sure we could be more financially efficient.

    I think it's certainly true that you learn to live to your means - and both my husband and i can be very complacent - our savings currently make about 15p a month, so we really need to change this!

    One thing I am determined to do is reevaluate our finances every time our circumstances change - we need to be far more mindful of where we fritter funds.

    My targets for this month are as follows:

    * 2 NSDs a week (minimum!)
    * Schedule in batch cooking
    * Say no to expensive plans!
    * Start Christmas shopping (I've been putting £60 a month in a saving account for the past couple of months, so this is budgeted).
    * Make a £500 mortgage OP
    *Confirm bank account switch
    Original Mortgage as of September 2016 = £322,999 Paid off by 2051
    Current Mortgage Balance as of September 2017 = £316,649
    Emergency Savings = £9,661 £10,000 £10,500 £11,200
    Mortgage OP's Total = £1500 £2200 £2900
    • SWSEGirl
    • By SWSEGirl 24th Oct 17, 12:07 PM
    • 48 Posts
    • 88 Thanks
    SWSEGirl
    So I finally got round to doing an SOA....and now the full horror of our frittering has hit me.....
    We do generally put around £1400 per month in savings/ towards mortgage OP's - but we could do better. Much better!

    Here goes:

    Household Information

    Number of adults in household........... 2
    Number of children in household......... 0
    Number of cars owned.................... 0

    Monthly Income Details

    Monthly income after tax................ 2839
    Partners monthly income after tax....... 3139
    Benefits................................ 0
    Other income............................ 0
    Total monthly income.................... 5978

    Monthly Expense Details

    Mortgage................................ 1110
    Secured/HP loan repayments.............. 0
    Rent.................................... 0
    Management charge (leasehold property).. 160
    Council tax............................. 128
    Electricity............................. 35
    Gas..................................... 35
    Oil..................................... 0
    Water rates............................. 30
    Telephone (land line)................... 0
    Mobile phone............................ 32
    TV Licence.............................. 11.66
    Satellite/Cable TV...................... 12
    Internet Services....................... 29.17
    Groceries etc. ......................... 350
    Clothing................................ 45
    Petrol/diesel........................... 0
    Road tax................................ 0
    Car Insurance........................... 0
    Car maintenance (including MOT)......... 0
    Car parking............................. 0
    Other travel............................ 192
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 15
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 0
    Contents insurance...................... 12
    Life assurance ......................... 25
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 81
    Haircuts................................ 40
    Entertainment........................... 250
    Holiday................................. 208
    Emergency fund.......................... 50
    Total monthly expenses.................. 2850.83

    Assets

    Cash.................................... 10000
    House value (Gross)..................... 380000
    Shares and bonds........................ 4000
    Car(s).................................. 0
    Other assets............................ 0
    Total Assets............................ 394000

    Secured & HP Debts

    Description....................Debt......Monthly.. .APR
    Mortgage...................... 322999...(1110).....2.24
    Total secured & HP debts...... 322999....-.........-


    Unsecured Debts

    Description....................Debt......Monthly.. .APR
    Credit Card....................2420......200.......0
    Total unsecured debts..........2420......200.......-

    Monthly Budget Summary

    Total monthly income.................... 5,978
    Expenses (including HP & secured debts). 2,850.83
    Available for debt repayments........... 3,127.17
    Monthly Unsecured debt repayments....... 200
    Amount left after debt repayments....... 2,927.17

    Personal Balance Sheet Summary

    Total assets (things you own)........... 394,000
    Total HP & Secured debt................. -316,999
    Total Unsecured debt.................... -2,420
    Net Assets.............................. 74,581
    Original Mortgage as of September 2016 = £322,999 Paid off by 2051
    Current Mortgage Balance as of September 2017 = £316,649
    Emergency Savings = £9,661 £10,000 £10,500 £11,200
    Mortgage OP's Total = £1500 £2200 £2900
    • SWSEGirl
    • By SWSEGirl 25th Oct 17, 3:33 PM
    • 48 Posts
    • 88 Thanks
    SWSEGirl
    I've bought lunch out 2 days in a row now - it really annoys me when I do this! I don't enjoy bought lunches any more than bringing in leftovers - so it's just money being spent for the sake of it. The problem is being able to get organised - I tend to get home around 8.30pm - and I've got people staying with me for 2 weeks, so after I've catered for them and had my dinner there doesn't seem to be time to make myself something.

    I'm trying to make plans for my brother's family coming to stay this weekend - I've booked them theatre tickets & we'll probably do the Tower of London or the Aquarium...although all these things serve to remind me how expensive London is for families!

    I also need to do a big clean of my flat - when I get home so late I just don't have the energy to do it - I must get my act together tonight!!

    In other news, I've started putting out the feelers for different jobs within my company - with the potential to increase my income by £600 per month. We'll wait to see if the opportunities come off, but I'd love to be able to commit £1000 a month to a mortgage OP!
    Original Mortgage as of September 2016 = £322,999 Paid off by 2051
    Current Mortgage Balance as of September 2017 = £316,649
    Emergency Savings = £9,661 £10,000 £10,500 £11,200
    Mortgage OP's Total = £1500 £2200 £2900
    • Welshlassie
    • By Welshlassie 25th Oct 17, 4:29 PM
    • 1,723 Posts
    • 2,983 Thanks
    Welshlassie
    Hi SWSEGirl
    How much of the £2927 do you actually have at the end of the month??

    Sounds to me like you need a budget - have a look at YNAB. It's completely revolutionised our finances in the last 4 years. There's a 34 day trial but it will help you give every pound a job and allow you the luxury of buying lunch out everyso often if that is a priority for you whilst also knowing you are saving for those irregular necessities like presents, insurances and the not so necessary but still occuring, haircuts, clothes etc and putting money towards savings and overpayments. It's a change of mindset but we wouldn't have been in the position we're in now without it.

    We're just about to extend our mortgage back to £200,000 to extend our house so understand where you are coming from.
    • SWSEGirl
    • By SWSEGirl 25th Oct 17, 4:39 PM
    • 48 Posts
    • 88 Thanks
    SWSEGirl
    Hey Welshlassie!

    Thanks for your reply.

    So we try to put a minimum of £1200 into savings/ mortgage OP's - and up to £1500 - although this still leaves a sizeable surplus, which seems to be frittered.

    I did use YNAB & loved it - but I couldn't work out how to set it so a monthly cycle started on the 23rd (my payday) - and then it became very confusing to me, my monthly budget seemed to be wiped on the 1st, and I couldn't work out how to override this! I'd love any tips you might have, because I'd like to start using it again.

    I do have a loose budget & an excel spreadsheet, but it's not a budget that assigns a job for each pound like YNAB, and I suspect the devil is in the detail, and that's why I'm mindlessly frittering!

    xx
    Original Mortgage as of September 2016 = £322,999 Paid off by 2051
    Current Mortgage Balance as of September 2017 = £316,649
    Emergency Savings = £9,661 £10,000 £10,500 £11,200
    Mortgage OP's Total = £1500 £2200 £2900
    • chelseablue
    • By chelseablue 25th Oct 17, 4:41 PM
    • 2,296 Posts
    • 2,822 Thanks
    chelseablue
    Can I be nosy and ask what jobs you both do?
    Mortgage starting balance 26.02.16 £231,294
    Mortgage after Year 1 £225,078
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