Mortgage free by September 2014 (or before!)

SmileyG_2

Update for March...


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 £53,594.
2) My investments have powered on since mid February. However they are now at an all time high of £13,560 (+£1,810 since 01/08/2009).
3) My value for the endowment is estimated at £22,780 (see below)
4) Overall current deficit is now -£17,254 (+£ 7,579 since 01/08/2009)
(See post #2 for numbers)


The mortgage reduction progresses well ahead of expectations. I have an overpayment reserve of £3,750.

Investments have surged ahead of expectations. My investments have achieved a real return of 10.4% to date since July 1st 2009. All my equity investments are up since January 1st and recent surge in the value of my income investment trusts has reduced the yield to around 5%. Just when I think the stock market can’t advance much further, it does. My target asset allocation of 52% shares / 48% cash is still in place, but after the recent increase in share values, it currently sits at 55/45 so no new money is going to the stock market at the moment.

My next valuation for the endowment will be at the end of the month, I’ll post the figures here.
So the current repayment targets are:
Outstanding mortgage at September 2014: £48,295 (although scheduled to run to November 2020)
To be paid by: Endowment (£34,100) and Investments (£14,195)

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

Based on current conditions, the mortgage could be paid by September 2013 as follows:

Outstanding Mortgage at September 2013: -£49,355
Predicted endowment value at September 2013: £31,106
Predicted investment value at September 2013: £20,677
Estimated surplus: £2,428

This projection is based on no increase in interest rates and the surplus could disappear with just a small change in interest rates so 2014 still remains the target.

Keep the faith and prepare for success!!!

SmileyG

SmileyG_2

Update for April...

1) My regular monthly payment of £351 has left my account on April 1st, and my overpayment of £250 left on April 15th, reducing the mortgage balance to £53,224.
2) My investments continue to rise. They are now at an all time high of £13,845 (+£2,095 since 01/08/2009).
3) My value for the endowment is estimated at £23,320 (see below)
4) Overall current deficit is now -£16,058 (+£ 9,477 since 01/08/2009)

(See post #2 for key numbers to date)

The mortgage reduction progresses well ahead of expectations. I have an overpayment reserve of £4,000.

Investments have surged ahead of expectations. My investments have achieved a real return of 12.2% to date since July 1st 2009. My equity investments are up since January 1st and the recent surge in the value of my income investment trusts has reduced the yield to 4.8% and 5.1%. I now think that shares are fully valued, given the uncertainty ahead of the election, so I’ll continue to top up my Cash ISA with the income from the investments. If the market falls, I’ll be ready to invest further, but not right now. My target asset allocation of 52% shares / 48% cash stays in place, but after the recent increase in share values, it currently sits at 54.4:45.6 so no new money is going to the stock market at the moment.

I tried to get a valuation for the endowment at the end of March, but I got stuck in a call centre queue, so the figure is a conservative estimate based on my projections to achieve a target maturity value of £34,100. When I get the actual figure I’ll update it here.
So the current repayment targets are:

Outstanding mortgage at September 2014: -£48,105 (although scheduled to run to November 2020)
To be paid by: Endowment (£34,100) and Investments (£14,005)

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

Based on current conditions, the mortgage could be paid by September 2013 as follows:

Outstanding Mortgage at September 2013: -£49,355
Predicted endowment value at September 2013: £31,106
Predicted investment value at September 2013: £20,851
Estimated surplus: £2,602

All projections are based on no increase in interest rates and the surpluses could disappear with just a small change in interest rates, so 2014 still remains the target, but at this rate I’ll be rounding down the target for the endowment at 2014. Mind you, I said that in 2001 and 2008.......

Hope everyone else’s MFW projects are going to plan.

Keep the faith and prepare for success!!!
SmileyG

setmefree2

well done :j

SmileyG_2

I finally managed to get an updated valuation for the endowment. The news is positive....

Valuations are:
Surrender value = £24,378
Projected value at 4% growth in September 2014 = £33,200
Projected value at 6% growth in September 2014 = £35,500
Projected value at 8% growth in September 2014 = £38,300
Therefore my new repayment targets are:

Outstanding mortgage at September 2014: -£48,585 (although scheduled to run to November 2020)
To be paid by: Endowment (£34,827) and Investments (£13, 758)

This is the first time since May 2009 that my projected endowment value + investments have been estimated as “on target” to pay the mortgage off, but its only the overpayments that have enable this to happen. And still these values can go down as well as up!

I’ve got new figures for September 2013 and also a new calculation now for September 2012.

Based on current figures, the mortgage could be paid off as follows:

Outstanding Mortgage at September 2013: -£49,442
Predicted endowment value at September 2013: £32,419
Predicted investment value at September 2013: £21,067
Estimated surplus: £4,044

Outstanding Mortgage at September 2012: -£50,278
Predicted endowment value at September 2013: £29,790
Predicted investment value at September 2013: £18,496
Estimated deficit: £1,992


Is September 2012 a touch ambitious? All projections are based on no increase in interest rates and the surpluses could disappear with just a small change in stock market sentiment, so 2014 still remains the target.

Hope everyone else’s MFW projects are going to plan.

Keep the faith and prepare for success!!!
SmileyG

SmileyG_2

Update for May...

1) My regular monthly payment of £351 has left my account on May 1st, and my overpayment of £250 leaves on May 17th, reducing the mortgage balance to £52,854.
2) My investments have fallen in the last month, see below. They now have a value of £13,345 (+£1,595 since 01/08/2009).
3) My value for the endowment is estimated at £24,378 (see below)
4) Overall current deficit is now -£15,131 (+£ 10,404 since 01/08/2009)
(See post #2 for key numbers to date)

The mortgage reduction progresses well ahead of expectations. I now have an overpayment reserve of £4,250. This is a significant figure, as it equates to 12 month’s regular mortgage payments. One of my major light bulb moments was the realisation that paying £19.00 pm im Mortgage Payment Protection Insurance (MPPI) for something that I could cover myself was crazy. I get double benefit from the overpayment reserve; I don’t have to pay an extra £19pm and it’s also saving me £18.35pm in interest on the mortgage. Doubles all round!!

Investments have been volatile since I last reported in. Whilst my equity investments are up since January 1st, the value has fallen by around £500 over the last 30 days. I suggested last month that share prices were fully valued and the recent correction in share values has proved that. The uncertainty that existed before and after the election coupled with the issues in the Eurozone has further to go, so this element of the MF plan looks interesting to say the least! My target asset allocation of 52% shares / 48% cash stays in place, but after the recent retreat in share values, it currently sits at 52.2:47.8, just about where I want it to be. Watch this space.

For the reasons described above, the endowment situation looks interesting too! The valuation that I obtained in April now looks high, given the events of the last month. All of those figures quoted in the above post would be significantly lower if I called the insurance company today. However, I’ll stick with the existing figures until the end of June and then get a revaluation.

So the current repayment targets are:


Outstanding mortgage at September 2014: -£48,383 (although scheduled to run to November 2020)
To be paid by: Endowment (£35,038) and Investments (£13,345)
Still on track...


Based on current conditions, the mortgage could be paid by September 2013 as follows:


Outstanding Mortgage at September 2013: -£49,216
Predicted endowment value at September 2013: £30,917
Predicted investment value at September 2013: £20,647
Estimated surplus: £2,348


Hope everyone else’s MFW projects are going to plan.


Keep the faith and prepare for success!!!

SmileyG

SmileyG_2

Update for June...

1) My regular monthly payment of £351 has left my account on June 1st, and my overpayment of £250 left on June 15th, reducing the mortgage balance to £52,481.
2) My investments have stabilised over the last month, see below. They now have a value of £13,438 (+£1,688 since 01/08/2009).
3) My value for the endowment is estimated at £24,378 (see below)
4) Overall current deficit is now -£14,665 (+£10,870 since 01/08/2009)
(See post #2 for key numbers to date)

The mortgage reduction progresses to expectations. I’ve made some adjustments looking forward as to what the outstanding mortgage balance might be in September 2014, and it assumes that future payments to the mortgage will be higher and the final maturity figure for the endowment will be lower; my spreadsheet calculates it at £46,624. This is now factored into the calculations below.

Investments have stabilised since I last reported in. Investments appear to be marking time, looking for good news from somewhere, but all the news appears to suggest that business will find it tough for the next few years. The only ray of light is emerging markets. I have a small exposure through my existing investments but it may be something worth looking at. It has to be said there are a number of companies screaming “buy me” at the moment, but it is important to keep the balance right. My target asset allocation of 52% shares / 48% cash stays in place, but after the recent retreat in share values, it currently sits at 51.6/48.4, just about where I want it to be. Watch this space.

No news on the endowment situation. The valuation that I obtained in April now looks high, given the events of the last couple of months. It’s hard to estimate the figure but I am guessing that it could have fallen back to about £23,800. However, I’ll stick with the existing figures until the end of June and then get a revaluation.

So the current repayment targets are:

Outstanding mortgage at September 2014: -£46,624 (although scheduled to run to November 2020)
To be paid by: Endowment (£33,186) and Investments (£13,438)
Still on track...

Based on current conditions, the mortgage could be paid by September 2013 as follows:

Outstanding Mortgage at September 2013: -£47,995
Predicted endowment value at September 2013: £30,917
Predicted investment value at September 2013: £19,684
Estimated surplus: £2,606

Hope everyone else’s MFW projects are going to plan. I'm off to blow my vuvuzela...:footie:_party_

Keep the faith and prepare for success!!!
SmileyG

SmileyG_2

I asked the Life assurance company for an updated valuation for the endowment. The news is positive....
Valuations are:
Surrender value = £24,970
Projected value at 4% growth in September 2014 = £33,200
Projected value at 6% growth in September 2014 = £35,500
Projected value at 8% growth in September 2014 = £38,300
However, my investments have fallen significantly in value since mid April. Valuation at 30th June was £13,165. More in later posts .....

My updated repayment targets are:

Outstanding mortgage at September 2014: -£46,610 (although scheduled to run to November 2020)
To be paid by: Endowment (£33,200) and Investments (£13,410)

I’ve got new figures for September 2013 and also a new calculation now for September 2012.

Based on current figures, the mortgage could be paid off as follows:

Outstanding Mortgage at September 2013: -£47,980
Predicted endowment value at September 2013: £32,419
Predicted investment value at September 2013: £19,289
Estimated surplus: £3,278

Outstanding Mortgage at September 2012: -£49,316
Predicted endowment value at September 2013: £29,790
Predicted investment value at September 2013: £17,276
Estimated deficit: -£2,250

On the overpayment front, I am considering overpaying my mortgage by £500 per month for the next three months rather than the £250 per month to the end of the year. The next three months are low spend months with no major budget outlays and it will ultimately save me interest. I’ll let you know what I decide in a couple of weeks.

Hope everyone else’s MFW projects are going to plan.

Keep the faith and prepare for success!!!

angela110660

Still doing very well - despite the investments hitting a bit of a brick wall. Good for you if you can make those extra payments for 3 months. Amazingly well done.

SmileyG_2

Update for July...

1) My regular monthly payment of £351 has left my account on July 1st, and my overpayment of £250 left on July 15th, reducing the mortgage balance to £52,091.
2) My investments have stabilised over the last month, see below. They now have a value of £13,408 (+£1658 since 01/08/2009).
3) My value for the endowment is estimated at £24,970 (see below)
4) Overall current deficit is now -£13,731 (+£11,804 since 01/08/2009)

(See post #2 for key numbers to date)

The mortgage reduction progresses to expectations. I’ve made some adjustments looking forward as to what the outstanding mortgage balance might be in September 2014, and it assumes that future payments to the mortgage will be higher and the final maturity figure for the endowment will be lower; my spreadsheet calculates it at £46,425. This is now factored into the calculations below.

Investments have been volatile since I last reported in. At the end of March the investments were valued at £13,660 but at end of June this had fallen to £13,165. This was despite interest, dividends and additional contributions.

The fall in the stock market almost tempted me to buy more shares as the balance had moved to 50% shares / 50% cash. My target asset allocation of 52% shares / 48% cash stays in place, but after the recent recovery in share values, it currently sits at 51/49, just about where I want it to be. Watch this space.

The endowment valuation was a pleasant surprise (see previous posts). The increase in the valuation has made a significant dent to the deficit!

So the current repayment targets are:

Outstanding mortgage at September 2014: -£46,624 (although scheduled to run to November 2020)
To be paid by: Endowment (£33,200) and Investments (£13,424)

Still on track, but...

I am now getting seriously ambitious about clearing this mortgage by September 2012. Based on current conditions, the mortgage could be paid thus:

Outstanding Mortgage at September 2012: -£47,394 (assuming overpayments continue to Feb ’11)
Predicted endowment value at September 2012: £29,790
Predicted investment value at September 2012: £17,818
Estimated surplus: £214 (I like this!)

Rather like the government, to do this involves “managing the deficit” by overpaying the mortgage. It has to be said, this target has only been become an option as a result of making the overpayments. When I set out, even 2014 looked like a challenge too far.

Hope everyone else’s MFW projects are going to plan.

Keep the faith and prepare for success!!!

SmileyG

P.S. My diary will be 1 year old on August 1st, I’ll review the year and decide what went right and what went wrong soon ......

SmileyG_2

17/08/2010

My August update.......

1. My overpayment of £400 has left my account yesterday, reducing the mortgage balance to £51,565
2. My Investment fund is now £13,379
3. My value for the endowment is £24,970
4. Overall current deficit is now -£13,214

This also means a predicted interest saving of £959.34 since Jan 2009 until my MF date of September 2014, My £400pm overpayment is more than covering the mortgage interest (£222.59)!

Following the revaluation of the endowment there is a chance that the option of clearing the mortgage in September 2012. To do this I would need the following:

· Three more overpayments of £400.
· Endowment value of £29,790 at September 2012
· Investment value of £17,816 at September 2012
· No increase in current Interest rates (unlikely!)

This will pay off an anticipated mortgage balance of £47,527, with £79 to spare.
This is two years ahead of my original target (2014) and 8 years ahead of schedule (2020)

It seems that to counter a potential rise in interest rates, it may be wise to overpay the mortgage. For now I am increasing my overpayment to £400 per month out of savings. It will be interesting to see how the strategy works.

I have also moved £596 of my cash in my Investment fund and bought 50 Scottish and Southern Energy shares. These are currently yielding >6% and I have concluded that there is a medium risk in holding these. I can continue to hold and take the dividend until I am ready to pay down the capital on the mortgage.

The shares/cash ratio is now 54.8/45.2, which now needs to move back to the 51/49 target ratio.

Keeping the MFW faith .....

SmileyG