Those obsessed with becoming mortgage free...

Broadwood

oldtractor wrote: »

paying the mortgage off too quickly can mean that inflation never gets to eat into the payments eg 500 might be a lot to start with but in 15 years time it might only be equivalent to 200 IYSWIM

Italy....Greece....Ireland....the good times came to a halt !

It might sound ok, but what if interest rates rise from 4% to 15% by 2020 like they did in the 70's or 80's. While paying £500 now, you might end up paying £1500 by 2020, and you will soooooo wish you had made over payments in the good (low interest) years.

It's not really about totally paying off the whole mortgage anyway. It's about reducing the capital owed so that less interest is added. With my SVR mortgage taken out in 1986 I would have been penalised quite heavily for early repayment, so paid off most of it with over payments by 2005 leaving monthly payments of just £3 for the last six years thereby avoiding early redemption charges etc.

Sepa74

Old tractor's comment is an odd one. The main reason interest rates will skyrocket is because inflation is too high. I would have thought that generally speaking the two would cancel each other out.

We are living in exceptional times for interest rates to be so low while inflation is so high. If inflation doesn't plummet over the next year as expected, expect interest rates to rise, even if the economy is weak. The last thing anyone wants is stagflation like the 70s.

ms_london

I am saving for a deposit, but have previously been in debt, but still, this thread really interests me as I'm nosy and like to see how others manage.

I will be buying alone, so obviously it will take me longer to save for a deposit & then become mortgage free, but it is great to read such motivated posts and diaries.

xx

Twiddy

This is a great thread to resurrect, as we too start our journey next year to be MF. We're planning on having a really balanced approach to it as we have 2 young children who we want to experience life with, and not keep them in front of a candle with bread and water while we pay our mortgage off!!

We're making a commitment to allocate a reasonable overpayment on top of the normal payment but saving the rest as we have aqcuired a good offset deal which current savings rates can beat.

We want rid of the mortgage but also want to live, pretty simple approach we think.....

Cheers
T

greent

We're fairly balanced. We've been away to Devon for a week this year and Disneyland Paris for 5 days. Couple of days out (legoland and the like) with CC points. We've just spent £10.5k hvaing 2 bathrooms, the cloakroom and the hall flooring all redone. We still eat out (maybe once a month) and have takeaways (a couple of times a month) Therefore we could do more to become MF but we choose not to - we still live a good lifestyle overall. The eldest 2 children are going on school trips to France next year (cost £950 before spending money and anything needed) so we're doing ok - I'm grateful for what we have. If I focussed on it too much then DH gets 'twitchy' and it doesn't help his depression and he almost tries to go the opposite way and spend more. Therefore we try and maintain a balanced approach - we OP £540 each month in with our DD so don't notice it and extra OPs come from extra money (ebay, NCT sales, cashback payouts and the like) I would like to up the ante next year so that we can pay off the further advance we took out for a loft conversion - means finding an additional £4750 - psychologically only having the one balance would be a massive boost and possibly worth the extra hassle of finding that money (I'm very lazy when it comes to things like ebay) just for a 12 month period

Jock_Tight

This is a good thread to resurrect

Initially I was quite obsessed with clearing the mortgage however over the last couple of years as targets have been achieved we have managed to find a balance where we are not loosing out on the fun things. We have been away on two holidays this year, 3 days in Berlin and a week in Fuerteventura.

At the start of our journey we looked at our spending on utility bills, insurance policies etc and hunted round for better deals which helped us increase our OP’s. We are now on track to be MF by end of 2012. We could pay it off sooner however as we are 100% offset we make use of our ISA allowances for savings.

While it will be great to be mortgage free, another incentive for myself is it will be equivalent to a 31% pay rise!

Thrugelmir

oldtractor wrote: »

paying the mortgage off too quickly can mean that inflation never gets to eat into the payments eg 500 might be a lot to start with but in 15 years time it might only be equivalent to 200 IYSWIM

With the type of inflation we are currently suffering (imported) then the effect will be to squeeze incomes. In days gone by high inflation and interest rates were accompanied by high wage inflation.

Overpayments save interest.

An expression credited to Einstein.

"Compound interest the 8th wonder of the world. Those that understand it save it and those that don't, pay it."

Twiddy

Jock_Tight wrote: »

While it will be great to be mortgage free, another incentive for myself is it will be equivalent to a 31% pay rise!

Never thought of it that way JT!!

Cheers
T

:beer:

newgirly

I like to think that I have a balance with oping, however I may come across as seriously obsessed! I think the big difference may be that for some mfw's you really to have to go to the extreme to squeeze the extra to make any op's. We have one average wage, 3 kids,and a £149K mortgage, so although we still have a holiday and a good xmas, there are sacrifices to be made along the way.

Our kids still go on school trips/holidays except the ones that are crazy prices like the latest ski trip at £1500 PP, they have a few parties a year, have gone on one weekend away with us , one with the school and a week in devon this year.

the things we have changed are :

• Heating off unless its very cold
• batch cooking, not wasting food/less junk food
• less lifts to school
• less weekends away
• cinema trips on weds/free tickets/kids club
• many low price bargins from the grabbit board
• monitoring elec use (a losing battle with a house full of consoles!)
• A reduced size wardrobe for kids
• buying through cashback sites
• doing surveys for vouchers

On the upside we have spent more on the kids birthdays and xmas than ever this year, but they don't get much through the year I want to spoil them.

I would rather they has less "things" now and we can help them out more in the future.

Audilover

My morgage has taken over my life I’m obsessed with paying it off early. Once you get into the swing of it,its like paying an extra bill. If I keep going paying extra I will have paid my 25 yr morgage  off in 15 years ,happy days