Mortgage free by September 2014 (or before!)

StuartGMC

Very cloak and dagger :rotfl:
Investment Trusts are being highlighted as a better option maybe than unit trusts in future due to lower costs. Presently the iii Funds ISA I use can only be used for UT and OEIC not for IT and shares. I may need to look at the overall position in this respect if ITs are indeed a better return.

SmileyG_2

Update for October....

1) My regular monthly payment of £351 has left my account today, reducing the mortgage balance to £55,329.
2) As i feared (see post of 15th October) , the stock market has retreated a little and my investments have fallen a little since the beginning of the month, and now have a value of £12,273 (still +£523 since 01/08/2009).
3) My value for the endowment is £21,476 (@ 01/10/09)
4) Overall current deficit is now -£21,579 (+£ 3,956 since 01/08/2009)
(See post #2 for numbers)

A big stock market retreat last week. No disaster, as I still have Cash ISAS of 48% of total investment, so that has cushioned the fall somewhat. This is maximum percentage that I want to hold in cash, so I’m preparing a watch list for future investments, looking at high income investment trust shares, emerging markets or single company shares.

I’ve also found a capital growth investment trust share, that currently has an objective of preserving capital; not a great yield but over successive 12 month periods it’s managed to achieve this more or less. The growth rate is unlikely to be spectacular, but it has a significant investment in index linked fixed rate investments, so if inflation starts to rage then a decent return could be expected.

Current repayment targets
Outstanding mortgage at September 2014: £48,923 (scheduled to run to November 2020)
To be paid by: Endowment (£33,100) and Investments (£15,823)

Next event is my mid month overpayment on 15th November 2009.

Keep the faith and prepare for success!!!
SmileyG

SmileyG_2

My November update.......
1) My overpayment of £250 left my account on Monday, reducing the mortgage balance to £55,079.
2) My Investment fund is now £12,613 (+£863 since 01/08/2009)
3) My value for the endowment is £21,476 (@ 01/10/09)
4) Overall current deficit is now -£20,990 (+£4,545 since 01/08/2009)

This also means a predicted interest saving of £580.29 since Jan 2009 until my MF date of September 2014. My £250pm overpayment is more than covering the mortgage interest of £237.76

Again the stock market continues to defy the doom and gloom of the real world, and continues to outperform my expectations, particularly over the last two weeks. Good news in one respect, but is it sustainable? I’m certainly not chasing it, I don’t need to.

New repayment targets
Outstanding mortgage at September 2014: £48,619 (scheduled to run to November 2020)
To be paid by: Endowment (£33,100) and Investments (£15,619)

If I want to pay off by September 2013, then ...
Outstanding mortgage at September 2013: £50,034 (scheduled to run to November 2020)
To be paid by: Endowment (£30,170) and Investments (£19,588)
Estimated shortfall is -£276


SmileyG

setmefree2

well done on that OP :T:T

SmileyG_2

Update for November....

1) My regular monthly payment of £351 has left my account today, reducing the mortgage balance to £54,966.
2) My investments have been up and down throughout November. However they ended on a high and now have a value of £12,787 (+£1,037 since 01/08/2009).
3) My value for the endowment remains at £21,476 (@ 01/10/09)
4) Overall current deficit is now -£20,703 (+£ 4,832 since 01/08/2009)

(See post #2 for numbers)

A small advance in investments since the last post. I thought the big reversal was coming with the news out of Dubai, but other than bank shares everything else seems to have weathered the storm.

The capital growth investment trust share that I identified in recent weeks is not as good a potential investment as I thought. The spread between bid and offer is huge, circa 4% and it trades a little as 1 transaction a day. Liquidity therefore may be an issue and I have considered that it’s best avoided for the moment.

I’m looking at other potential investments including utilities and infrastructure companies.

In the meantime I have to decide what to do with my maturing fixed rate ISA, I may re-invest it on a 2 year rate with monthly interest. Any suggestions, anyone?

New repayment targets are:

Outstanding mortgage at September 2014: £48,728 (scheduled to run to November 2020)
To be paid by: Endowment (£33,100) and Investments (£15,628)

Next event is my mid month overpayment on 16th December 2009, which means that I have managed to achieve my overpayment target for 2009. I have lowered my target for 2010 to £230 per month, but I still hope to achieve in excess of that.

Don’t forget if you want a 12 month MF target in 2010, cake21 is running a new challenge here....


http://forums.moneysavingexpert.com/showthread.html?t=2062237

Keep the faith and prepare for success!!!

SmileyG

SmileyG_2

Update for January....

1) My regular monthly payment of £351 has left my account on January 1, and my first overpayment of 2010 (£250) left on January 15, reducing the mortgage balance to £54,327.
2) My investments have had a good start in 2010 and now have a value of £13,175 (+£1,425 since 01/08/2009).
3) My value for the endowment is £22,016 (Estimated)
4) Overall current deficit is now -£19,136

(See post #2 for numbers)

My maturing fixed rate ISA has been re-invested on a 2 year rate with monthly interest. The monthly interest , plus my additional monthly savings are planned to be re-invested in the stockmarket, but at the moment my ratio of stocks/cash is 54/46; I'm looking for a ratio of 52/48 which means new money will remain in cash for now.


So new projections for September 2014:
Outstanding mortgage at September 2014: £48,303 (scheduled to run to November 2020)
To be paid by: Endowment (£33,100) and Investments (£15,203)


Don’t forget if you want a 12 month MF target in 2010, cake21 is running a new challenge here....


http://forums.moneysavingexpert.com/...html?t=2062237

Keep the faith and prepare for success!!!

SmileyG

SmileyG_2

20/02/2010

Update for February...

1) My regular monthly payment of £351 has left my account on Feb 1st, and my overpayment of £250 left on Feb 15th, reducing the mortgage balance to £53,962.
2) My investments have been up and down since January. However they are now at an all time high of £13,266 (+£1,516 since 01/08/2009).
3) My value for the endowment has increased to £22,780 (see below)
4) Overall current deficit is now -£17,916 (+£ 7,619 since 01/08/2009)
(See post #2 for numbers)

The mortgage reduction progresses in line with expectations. I received my mortgage statement and it shows that at the end of the year, I have an overpayment reserve of £3,000. With the two overpayments since the start of the year, that now equates to almost 10 months of regular mortgage payments. That’s a nice contingency, given the employment market at the moment.

Investments have done well, particularly over the past week. I have re-invested part of my funding in a 2 year fixed rate ISA, paying monthly. I thought long and hard about using it to increase the overpayments because the rate’s not great (AER 3.4%), but I didn’t want to withdraw it and lose the tax free status, so it’s a compromise. All my equity investments are up since January 1st and on my income investment trusts the dividend is being maintained, so they’re both still yielding >5%. I’m still not sure if the stock market can advance much further, but my target asset allocation of 52% shares / 48% cash Isa seems prudent in the current climate. After the recent increase in share values, it currently sits at 54/46 so no new money is going to the stock market at the moment.

As I said at the start of my diary, I’m looking to get my endowment valued at least every 3 months. So at the end of January, I phoned the insurance company and it now has a value of £22,780. That’s well ahead of my August 09 estimate, and the 6% estimated maturity value is now £34,100 (£1000 more than the October 09 valuation.)

So the new repayment targets are:

Outstanding mortgage at September 2014: £48,487 (although scheduled to run to November 2020)
To be paid by: Endowment (£34,100) and Investments (£14,387)

All of these targets can be affected by events, so the combination of overpayments and investments are still needed to meet the target date of Sept 2014

Keep the faith and prepare for success!!!
SmileyG

setmefree2

Well done on all your progress smileyg:T:T:T

angela110660

very well done - just noticed your thread and you are very focussed. We are having a dilemma at moment as we have just over 8 years left on our mortgage. It is half repayment and half interest only although at present our Standard Life endowment will not match the interest only portion. We are considering whether to half the interest only and make more of the balance repayment or just make overpayments to repayment portion or even cash in ISAs and pay off lump of the repayment. Decisions. Decisions.
Think we have a lot of calculations to do first.

SmileyG_2

angela110660 wrote: »

very well done - just noticed your thread and you are very focussed. We are having a dilemma at moment as we have just over 8 years left on our mortgage. It is half repayment and half interest only although at present our Standard Life endowment will not match the interest only portion. We are considering whether to half the interest only and make more of the balance repayment or just make overpayments to repayment portion or even cash in ISAs and pay off lump of the repayment. Decisions. Decisions.
Think we have a lot of calculations to do first.

Like you, all of this mortgage free stuff came out of the fact that the original endowment was never likely to meet its original maturity target by after 2000.

I now see the mortgage reduction journey as four seperate activities:

1) Pay the endowment, target return of 6% pa (not really guaranteed, currently estimated at 3.9% since 1989)
2) Investments, target return of 5.18% pa (currently 5.81% year on year, not guaranteed)
3) Regular overpayments, return of >5.18% pa (year on year until Nov 2011)
4) Regular payments (return of >5.18% on the capital portion, again until Nov 2011).

1 and 2 have the potential to exceed the targets, 3 and 4 are a diversification away from investment risk.

If I was really brave I would have thrown all my money into the investments, my returns each year to June end have ranged from -12.6% to +21.7%.

But even I'm not that brave ....

SmileyG