I've Done It!! I'm Finally Mortgage-free

Insert By Martin

First of all let me state for the record. Martinslovechild is no relation of mine; and I suspect he's older than me anyway! . Yet his story below is inspirational and worth all MoneySavers having a read of.
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Hiya,

I've written this same explanation on the new 'MFW Roll Of Honour' thread (thanks Dithering Dad!).

For sake of ease, I've copied my response here also...

I decided to become a MFW in May 2001, at which point my mortgage was £129,000.

I remember thinking how much of an achievement it would be to become mortgage-free before I hit the big '40'. In 2001, my mortgage had been running for 8 years and would have 17 further years left to run.

I telephoned the bank and asked for the monthly cost of reducing the outstanding mortgage term by 1 year, 2 years, 3 years, 5 years, 7 years & 10 years respectively. I can't remember the actual figures quoted but I do remember that reducing the mortgage by 10 years cost an extra £435 per month; this was the option we decided to go for based on a budget I'd done, which determined that we could afford regular overpayments of about £500. This immediately reduced the term to 7 years, which was very good news!!

I was tied into a mortgage deal at the time which didn't allow overpayments (but bizarrely allowed me to reduce the term thereby having the same effect). There were of course penalties for making any overpayments during the discount term which would last until February 2003.

In February 2003, I immediately applied for a more flexible mortgage with a different lender which would allow overpayments, underpayments & drawdowns. Again, during the initial period (through to October 2004), I was restricted to making overpayments which were no more than 10% of the outstanding mortgage per annum.

Around mid-2003, I discovered 'stoozing'; as I would discover, this was to play a very big part in my clearing the mortgage. In 2003, I applied for my first 0% card and discovered just how easy it was to move the borrowed money into my current account, from where I used it to first clear my wife's car loan (remember, I couldn't overpay the mortgage by more than 10% at this time). Once my wife's car loan was fully on 0% (this took 3 credit cards in both mine & my wife's names), I applied for further 0% cards to clear my own car loan. I then ensured that I paid the full 10% mortgage overpayment by borrowing even more cash, all of it at 0%.

In fact, once the cars were on 0% and I'd repaid the 10% on the mortgage, I decided to keep going - I maxed out on an increasing number of 0% cards. During 2004, I continued to borrow on 0% cards. In fact, when the 10% overpayment restriction eventually expired on the 1st November 2004, I immediately overpaid an amount totalling £51,500 into my mortgage overpayment fund!! At this point, my outstanding mortgage balance fell to just £6,500 - in other words, I was paying just £58 per month in mortgage interest, compared to the £326 that I should have been paying!! I was saving £268 a month in interest and an extra £3216 was being paid off my mortgage each year as a result of 0% cards!!

I eventually accrued a stoozing pot of over £100,000. This was in addition to my wife's pot of £37,000. This was quite staggering as my earnings are nothing like this amount. Since the stooz pot hit this amount, it got progressively more difficult to maintain this level, so it was fortunate that as time went on and I was unable to replace some credit cards with fee-free 0% cards, I was in the lucky position of not having to do so, as I was clearing the mortgage pretty quickly and the outstanding balance was reducing at a fair rate of knots meaning that I didn't need access to so much 0% credit. Today, the level of my stoozing pot is less than half of its maximum - mainly because fee-free 0% cards are a thing of the past, but also because the mortgage is gone - I suppose that I was simply a lucky benefactor of cheap credit being made available very easily to me during the time that I wanted to make the greatest impact in cleaing my mortgage.

As for perls of wisdoms, I simply set myself a target and stuck to it. I designed a realistic budget which still allows me to fund purchases of CDs and meals out. I ensured that if I overspent in any one month, I would need to underspend the following month (or apply for another 0% card ).

The most important thing of all is to stay totally focused. It doesn't matter whether your target is 1 year, 10 years or 20 years. It can be done. Just stick to your goals.

Good Luck!!