Mortgage free by 40

Hi all im just starting out on the Journey to becoming mortgage free and have been really inspired by the diaries i've read on here especially setmefree's.

Im 26 years old and in 2006 I bought a house at the peak of the market with my ex fiance for 128,000 unfortunately we broke up because she couldnt settle in leeds (im from hull so it was a new start for both of us) and I couldnt settle in Wales where she was from so I bought her out of the house and took the mortgage on.

the house was revalued at £140,000 last July and because I didnt have 10% equity I paid £2000 to bring my mortgage down to £126,000 so it was a 90% mortgage.

A year on im fairly sure the property is worth about 132-134K which leave me with around 5% equity and a mortgage renewal next July - I am currently on a fixed rate of 5.65% paying £757.00 a month with Halifax and can overpay by 10% a year.

I had a lodger who was paying me £400 a month and I used this money to pay off my car which is now fully paid, the problem is im not sure how im going to overpay because after all my bills food and petrol has gone out im literally left with £100 a month, my work is very bonus orientated and sometimes I will get a bonus of £1000.00 a month or nothing!

My girlfriend is going to move in next summer and she will be contributing around £500.00 a month so I think I could use £400.00 of this a month to overpay has anyone got a link to a calculator that shows how quickly this would reduce it?

Any hint or tips would be greatly appreciated
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Replies

  • SmlSaveSmlSave Forumite
    4.9K Posts
    Part of the Furniture Combo Breaker
    ✭✭✭✭
    Welcome gravitas!

    Posting an SOA is best thing I can advise you to do at first :o)
    Currently studying for a Diploma - wish me luck :)

    Phase 1 - Emergency Fund - Complete :j
    Phase 2 - £20,000 Mortgage Fund - Underway
  • RosieTigerRosieTiger Forumite
    863 Posts
    There's a link to calculators thread at the top of the MFW section.
    RosieTiger - Highest £242,000 Feb 2004 :mad:
    Lightbulb Dec 2008 £146,000 by March 2026:eek:
    MFi3T2 and T3 No 28 - Dec 2009 Start Balance £117,000
    Current Position-Fully off set by savings since March 2013
  • StuartGMCStuartGMC Forumite
    2.2K Posts
    Gravitas
    Welcome and best wishes going forward. Before committing everything to the mortgage do confirm that you have in place the usual requirements:
    • emergency funds (3-6-9 months outgoings)
    • pension
    • putting aside monies for planned costs on annual items (holiday, insurance) and for your long term replacements (fridge, car, new furniture etc)
    • you have a detailed household expenditure spreadsheet to manage your finances
    then you can look at the realistic OP that is viable.

    As you note your income is bonus dependent, can you work a budget on the basis of this and then have your bonus to give you additional savings, some OP and a few "treats" - at your age remember it is a marathon not a sprint so do build some enjoyment spend into your budget within reason.

    Best wishes with the plans and with GF moving in and life together.
  • gravitasgravitas Forumite
    38 Posts
    Newshound!
    Hi thanks for the well wishes thats very kind of you.

    I will take your advice on and not start to overpay until I have a few months outgoings saved up and have that cushion so to speak.

    I suppose if I kill myself to pay off my mortgage by 40 im hardly going to look back and think im glad I did nothing in my 20's and 30's!

    I'll take on board the advice and let everyone know my progress
  • gallygirlgallygirl Forumite
    17.2K Posts
    Part of the Furniture 10,000 Posts Name Dropper Mortgage-free Glee!
    ✭✭✭✭✭
    Try https://www.whatsthecost.com to see what the effect of overpayments would be - it's really useful. But I agree with Stuart - sort out your day to day finances and get some emergency savings. Check with your mortgage provider though - if you can get back your OP's easily it may be as well to use that as your OP account.

    Good luck :beer:
    A positive attitude may not solve all your problems, but it will annoy enough people to make it worth the effort
    :) Mortgage Balance = £0 :)
    "Do what others won't early in life so you can do what others can't later in life"
  • couldn't settle in wales, you must be mad. Best place in the world :-)

    Good Luck on mortgage free happiness and financial security and all that goes with it.
    Mortgage Start jun 2007 £88500 Outstanding Balance £51000
    Overpayments 2007 Nil 2008 £1040 2009 £7853 2010 £10000 2011 aiming for £18000 (6k so far)
    The Early Bird Gets the Worm, but the Second Mouse Gets the Cheese!!
  • setmefree2setmefree2 Forumite
    9.1K Posts
    Mortgage-free Glee!
    ✭✭✭✭
    RolandChayer-WelcomeSmiley.gif and goodluck.gif with your MF journey.
  • gravitasgravitas Forumite
    38 Posts
    Newshound!
    Hi all

    Quick update - I have had two lots of interest in my spare double room and somebody is coming over after 5 2moro to see the room so fingers crossed!
  • kaka72kaka72 Forumite
    154 Posts
    Hello....your title caught my eye!! I had promised my husband I'd pay off the mortgage before he was forty.....but i think I can do it before I'm the big four O. ( I'm 37 and he is 33).
    I only owe £26000 and am paying off £6000 next month leaving £20000. Keeping up the £400 monthly payments and over paying half??? again we just might do it!
    Good luck x
  • setmefree2setmefree2 Forumite
    9.1K Posts
    Mortgage-free Glee!
    ✭✭✭✭
    gravitas wrote: »
    Hi all

    Quick update - I have had two lots of interest in my spare double room and somebody is coming over after 5 2moro to see the room so fingers crossed!

    web-messenger-crossed-fingers.gif Good Luck :D
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