Mortgage Free by November 2028

CountingPenniesClaire

Ok, so ALOT has happened in the last few months. Where to begin...

We had worked out that with the current rate we were saving we should be "mortgage free" by June 2012 or thereabouts. Our mid/long term plan has been get mortgage free, build up savings for 3 years and then do one of: 1. jack jobs in or take sabbaticals and go travelling for a bit, 2. use the savings to put down a deposit on another house. (It has always been in our plan to hang on to our current property as an investment / let it out.)

We've been at our house for almost 10 years and in the last 2 years we've felt very ready for a change (motivated by a bit more downstairs space, more rural & characterful with a nice garden and views). However, we felt v strongly that we needed to stick to the plan....or we did!

We've not been actively looking, but some casual browsing on rightmove one sunday morning in July has since resulted in us agreeing an offer in September and completing on a property TODAY! All the finances stacked up nicely (without going into details we can afford to pay both mortgages monthly (small BTL mortgage and larger residential mortgage), make some overpayments each month and still rainy day save on top) and the house is absolutely what we wanted. We've done all the necessary work on our existing home to prepare it for rental and it is now on the market through a lettings agency.

We've ensured we've got savings set aside for all those horrible illness, unemployment, house disaster scenarios - the thought of which makes your blood run cold. The savings aren't what they were but we will build them up slowly but surely.

So, in a sense, we have set ourselves back with current MFW challenge, but I do feel we have set ourselves on an exciting new course in life. And we have renewed MFW challenges (we had wished with our first house / mortgage that we'd cottoned on immediately to the overpayments concept, but this time we can start right at the beginning and makes dents into the capital right from the start).

So that's me (us)! Just gotta hope all goes smoothly with the completion today. Will be updating signature soon!

CPC :j

Sepa74

Wow! What a big change. Congratulations!

CountingPenniesClaire

thanks sepa74. completed around 11ish but vendors didnt leave til 3.30. we picked up the keys at 1.30, arrived at the property at 2 and said hi - it was obvious they were stuggling so we cut them some slack and waited. They had had an unfortunate incident with their aquariam (smashed while being moved) resulting in fish and water everywhere (not all the fish survived and some are still in a bucket in the kitchen of our new house waiting to be collected tomorrow)! Fortunately we are moving ourselves and have no-one going into our old property yet (and we are spending tonight in our old property anyway) so could afford to wait (otherwise it might have been difficult!) They left the house tidy and clean and it has been a pleasant process throughout so all winners in the end.

CountingPenniesClaire

So I've been away from the boards for a good while and lurking in the shadows for the past month but I thought 2015 ought be the year to get back on track.

Last time I posted on this thread we had just taken the giant leap of buying new home and renting out our old one. Meant the day to day MFWing took a bit of a back seat but we factored overpayments and offsetting into the equation right from the word go so it would stay an automatic "way of life" and we didn't end up allowing spare monies to be sucked up and then no longer spare after a few months!

Well, fast forward a little over 3 years, and things have worked out pretty well. Not without its stresses, not to mention eye watering costs such as a new roof, new central heating system and various other needs (& wants tbf), but we are content and pleased we took that leap when we did. Not least because our mortgage provider insisted we took the mortgage over 23 instead of 25 years (only cos oh wouldve been 67 at the final redemption of a 25 yr mortgage). Not that we have any intention of still paying a mortgage at that age!

Claire

CountingPenniesClaire

I've been thinking about a new MFW aim.

I'm going to leave the BTL out of the equation. It is ticking along nicely, has been constantly tenanted at a very healthy return, taking both tax and overheads into consideration and the mortgage is at around 50% LTV. We have also built up a good contingency for repairs, replacements, boiler failures etc.

I really want to focus on the larger mortgage on our family home. The outstanding balance on this is certainly eye watering at £261,000, but from both an equity and an affordability perspective we are within our comfort zones. We are on a repayment based 5 year fix of 2.85% (expires oct 2018).

We are overpaying £350 direct onto the mortgage, and putting another £350 in an offset. Total offset amount is £23,000 - made up of collated £350s (which are ring fenced), BTL income (ring fenced save for significant expenditure should it be required on the BTL) and joint savings (our rainy day, emergencies etc pot).

We still want to be MF on our family home asap (and we were so close before we embarked on this latest chapter of our life!) but I feel it has been a positive move, and all being well, will stand us in a very secure position for the mid to long term future and possibly enable us take a more "flexible" approach in our working lives down the line.

Of course, who knows what the future holds, but should salary cuts, redundancy or illness feature, we have savings to keep us going for a period of time, and options, should long term crisis hit. There is certainly nothing on the horizon to suggest trouble ahead (famous last words!), but these days you've got to be prepared to adopt the brace position!

My aim is to start updating this thread more regularly, more as a way of documenting / measuring progress to myself - at least when I have some thing vaguely interesting to report or comment on!

CountingPenniesClaire

Right, all is ticking along fine and we continue to make OPs to mortgage. To free up some more cash in the mid to long term and to try and build up my own personal savings stash - separate from joint OP - (I only have £250 eek) I have some other plans.

After some calculations and some analysis on my personal spends I can see there are some serious savings to be made.

Grocery shopping is the big culprit for us - massively expensive and out of hand, with top ups all the time and lunch always being bought not made. So I am now making lunch, we have a proper budget for the weekly shop and top up is only for staples (bread, milk NOT choccies, crisps, wine and cider!) and we are using Aldi to further reduce costs. Ive also joined the giving up/cutting down alcohol support thread - will be good for pocket, mind and body!

With the savings made, I can...

1. pay off my personal loan early and have increased my monthly payments, from Feb, from £193 to £300. Waiting to hear from bank what that does to term of loan and total interest payable and I'll post it up. Sooner I pay this off the sooner that money can be saved up!

2. Build up some personal savings to give me a bit more security and ready cash without having to dip into mortgage OP. It may be a bit of an ask but I will be trying to save £200 a month. Again will post up progress.

So I guess the ultimate aim is MFW but there willbe some DFWing on the way!

CountingPenniesClaire

So I have a new signature with my aims. I think I've kept them realistically ambitious! Today I made my first savings payment of the year. Early in the (financial) month for me but I figured if I move it out of the current account now, it can't be spent!

CountingPenniesClaire

A quick update:

Have set up my OP standing order on my loan and that starts at the end of this month (so no Jan OP - as in, out of my Jan pay). The bank informed me that upping to £300 pays it off in 34 months (instead of 48), but I am going to use some of my savings at the end of this year to reduce it down further and then do the same and get it paid off within 24 months. That's the aim!

Met target for savings (and some!). Very belated MIL birthday (May) and Xmas present came through. I'm still hoping I'l have a bit of surplus from Jan payday at the end of this month, and I've arranged for that to be "swept" across to my savings pot. Excited to see how much it will be!

CountingPenniesClaire

I meant to add that our new approach to grocery shopping is working a treat. Won't know til the fat lady sings (ie the end of the financial month), precisely what surplus we have, but we have substantially more than we would normally have at this stage in the month. Whatever it is the surplus will be going into our offset savings pot for rainy days. Will let you know at the end of the month!

The only fly in the ointment this month has been our little furball, Maggie-Magpie. She needed an operation to extract two teeth last week so by the time she's had her check up this week, the cost will be getting on for £450. Still, that's why we save.

CountingPenniesClaire

Final day of the January pay month today. Get paid for February tomorrow, so have swept the remaining £33.04 (yes I actually had something remaining!) into the personal savings pot. Am well ahead on target but doubt i can match it this month, particularly as £150 was belated Xmas and bday gift and this month I start the loan OPs.

Anything over the £200 target will be ace though!

We also underspent on our grocery shopping this month and have £140 to move into our joint savings.