Mortgage free by September 2014 (or before!)

SmileyG_2

Wow, September must have been an exciting month, I forgot to post ......!

My October update.......
1. My overpayment of £400 has left my account yesterday, reducing the mortgage balance to £50,506
2. My Investment fund is now £14,292
3. My value for the endowment is £25,542
4. Overall current deficit is now -£10,672

This also means a predicted interest saving of £1065.50 since Jan 2009 until my MF date of September 2014. My £400pm overpayment is more than covering the mortgage interest (£218.01), so I’m making serious inroads into the outstanding balance.

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:
· Two more overpayments of £400.
· Endowment value of £29,790 at September 2012
· Investment value of £17,689 at September 2012
· No increase in current Interest rates (unlikely!)

This will pay off an anticipated mortgage balance of £47,145, with £334 to spare.
This is two years ahead of my original target (2014) and 8 years ahead of schedule (2020)

Providing everything works out, I will probably overpay the mortgage by a nominal amount in 2011, unless interest rates start to rise. I will probably divert the money towards the investments, as they will be yielding more than the interest due when I revert to SVR in November 2011.

As far as the endowment is concerned, I have made what I believe is a very conservative estimate of its value since the last valuation in June. I will need to crunch the numbers but any valuation in excess of £30,000 will see me surrender the policy and pay of a proportion of the mortgage.

My investments have done well in the last two months. No new investments were made in shares, but the ratio of the shares/cash is now 56.5/43.5, which now needs to move back to the 51/49 target ratio. It’s not a hard and fast ratio, but it does give an indication of when to scale back the share purchases and as a rule it’s worked well for me through three huge stock market setbacks so I won’t ignore it!

Keeping the MFW faith .....

SmileyG

SmileyG_2

My November update.......
1. My overpayment of £400 has left my account last Monday, reducing the mortgage balance to £49,972 (below 50K!)
2. My Investment fund is now £14,413
3. My value for the endowment is £25,542
4. Overall current deficit is now -£10,017 (four figures would have been nice....)

This also means a predicted interest saving of £1,115.66 since Jan 2009 until my MF date of September 2014. My £400pm overpayment is more than covering the mortgage interest (now £215.71), so I'm making serious inroads into the outstanding balance.

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:
· One more overpayments of £400.
· Endowment value of £29,790 at September 2012
· Investment value of £17,651 at September 2012
· No increase in current Interest rates (unlikely!)

This will pay off an anticipated mortgage balance of £47,128, with £313 to spare.
This is two years ahead of my original target (2014) and 8 years ahead of schedule (2020)

Providing everything works out, I will probably overpay the mortgage by a nominal amount in 2011, unless interest rates start to rise. I will probably divert the money towards the investments, as they will be yielding more than the interest due when I revert to SVR of 2.5% in November 2011.

As far as the endowment is concerned, my revalaution remains as predicted. I will need to crunch the numbers but any valuation in excess of £30,000 will see me surrender the policy and pay off a proportion of the mortgage. The dilemma is that the endowment will probably grow in excess of 2.5% pa, but at the end of the day, paying off the mortgage is what this is all about. May need some advice guys.....!

My investments are performing as expected. No new investments were made in shares, but the ratio of the shares/cash is now 56/44, tending towards the 51/49 target ratio.

Keeping the MFW faith .....

SmileyG

SmileyG_2

Happy New Year everbody!!

Here's my December 2010 update...

1. My overpayment of £400 left my account on 15th December, reducing the mortgage balance to £49,428
2. My Investment fund is now £14,685
3. My value for the endowment is £26,123
4. Overall current deficit is now -£8,620

This also means a predicted interest saving of £1163.88 since Jan 2009 until my MF date of September 2014, my £400pm overpayment is more than covering the mortgage interest (£213.40)!

However, the revaluation of the endowment, the current progress of the investments and the overpayments to date has now created an opportunity to clear the mortgage in September 2012. The rationale is as follows:

· No further overpayments unless interest rates change or investments/endowments underperform (but see below).
· Predicted Endowment value of £29,790 at September 2012
· Investment value of £17,831 at September 2012
· No increase in current interest rates (unlikely!)

This will pay off an anticipated mortgage balance of £47,136, with £485 to spare.

This is two years ahead of my original target (2014) and 8 years ahead of schedule (2020).
I have decided to continue overpaying the mortgage by a nominal amount (£1200) in 2011. After that, any excess capital may be diverted towards the investments, as they still have the potential to yield more than the interest due when I revert to an SVR (currently 2.5%) in November 2011.

As far as the endowment is concerned, I have obtained a new valuation. My target valuation for August 2012 is still £30,000; this will see me surrender the policy and pay of that proportion of the mortgage.

My investments have benefitted from the “Santa rally” since September 2010. No new investments were made in shares, but the ratio of the shares/cash is now 55.9/44.1, which now needs to move back to the 51/49 target ratio. New cash, dividends and interest are keeping the ratio stable, but given that I am in a good place with respect to the new target, I might need to consider selling some of the shares and moving it to cash (in an ISA of course!).

A couple of interesting targets to be achieved in the next few months .....

· When the mortgage drops below £49,000: This was the original target value for the endowment in 1989.
· When the mortgage drops below £48,450: This was my original mortgage in September 1989(!)
· Target achieved in the last month: Endowment and Investments now exceed the ”interest only” portion of my mortgage (£40808 vs £40,000).

Hopefully the path to mortgage freedom is downhill all the way from here...

Keeping the MFW faith .....

SmileyG

SmileyG_2

My January update (first post of 2011) .......

1. My overpayment of £400 left my account on 17th January, reducing the mortgage balance to £48,891 (below £49,000; see below for the significance)
2. My Investment fund is now £14,824
3. My value for the endowment is £26,123
4. Overall current deficit is now -£7944

My overpayments since Jan 09 will also save me an estimated £1,220 before my original target MF date of September 2014.

My overpayment reserve is £7,150 well over 18 months of regular mortgage payments .

September 2012 is now my new target date for mortgage freedom. The spreadsheet tells me that no more overpayments are required to do this, but I would then need to monitor endowment and investment progress carefully to achieve it.

The plan is

· No further overpayments required, unless interest rates change or investments/endowments underperform (but see below).

· Predicted Endowment value of £29,790 at September 2012
· Investment value of £18,259 at September 2012

· No increase in current interest rates (unlikely!)

This pays off a mortgage at September 2012 of £47,014 with £1,035 to spare.

I am still going to try and make a further £800 of overpayments this year, £400 from savings and £400 from income. Future overpayments should now come from income; I have a number of other projects that need savings, including some home improvements!!

My mortgage is now less than £49,000. If the endowment was on track, I would now be looking at a mortgage that could have been paid off by the endowment as intended, sadly it’s not to be.

The next target is £48,450. That was the value of my very first mortgage in 1989. It’s nice to be in a position to make inroads into the original mortgage. When mortgage rates were >12%, I remember having to rely on Mum and Dad to meet payments some months!

Investments have made steady progress. I’m expecting a period of consolidation now. I am tempted to buy some additional shares (TESCO and VODAFONE look particularly attractive), but my rules don’t permit it at the moment; see my previous posts.

Hope everyone else is on target, and good luck for 2011

SmileyG

RosieTiger

Hey SmileyG, that's really good progress. Well done on getting past the £50K milestone

SmileyG_2

My March update .......

1. An overpayment of £50 left my account on 15th March, reducing the mortgage balance to £48,158 (below £48,450; see below for the significance)
2. My Investment fund is now £14,490
3. My value for the endowment is £26,123
4. Overall current deficit is now -£7,545

My overpayments since Jan 09 will also save me an estimated £1,269 before my original target MF date of September 2014.

My overpayment reserve is £7,600 well over 21 months of regular mortgage payments .

September 2012 remains my target date for mortgage freedom. The spreadsheet tells me that no more overpayments are required to do this, but I need to monitor endowment and investment progress carefully to achieve it.

The plan is

· I have reduced my overpayments to £50pm; this comes out of income and will remain at this figure unless interest rates change or investments/endowments underperform (see below).
· Predicted Endowment value of £29,790 at September 2012 (see below)
· Investment value of £17,595 at September 2012
· No increase in current interest rates (unlikely!)

This pays off a mortgage at September 2012 of £46,330 with £1,055 to spare.

Investments have gone backwards since my last post.
I was expecting a period of consolidation, but the uprisings in the Middle East and the sad events in Japan has knocked back my shares, but the shares/cash ratio (54.3/45.7) still does not indicate a need to change strategy.
Recent events have probable affected the endowment valuation, watch this space!

With a predicted surplus calculated at September 2012, but with a possible reduction in the endowment valuation, I have decided to continue my overpayments to the mortgage but at a reduced rate to £50pm for the forseeable future. I do have a contingency fund which is not included in the total above; suffice to say that if added to the endowment and investments, it would clear the mortgage. My strategy is to review the situation monthly, When my fixed rate ends in November 2011 I will then re-determine the best approach for reducing the mortgage.

The mortgage is now less than £48,450. That was the value of my very first mortgage in 1989. My next target for the mortgage would have been £44,848. This was the amount outstanding when I bought this property back in 2001, but based on current calculations this would not have been achieved until March 2014. I’m hoping to be mortgage free before then!

Hope everyone else is on target, and good luck for the rest of 2011

SmileyG

SmileyG_2

My April update .......

1. An overpayment of £50 left my account on 15th April, reducing the mortgage balance to £47,965
2. My Investment fund is now £15,015 (see below)
3. My value for the endowment is £26,541
4. Overall current deficit is now -£6,408

My overpayments since Jan 09 will also save me an estimated £1,275 before my original target MF date of September 2014.

My overpayment reserve is £7,650 well over 21 months of regular mortgage payments .

September 2012 remains my target date for mortgage freedom. The spreadsheet tells me that no more overpayments are required to do this, but I need to monitor endowment and investment progress carefully to achieve it.

The plan is

· Overpayments stay at £50pm; this comes out of income and will remain at this figure unless interest rates change or investments/endowments underperform (see below).
· Predicted Endowment value of £29,790 at September 2012 (see below)
· Investment value of £18,044 at September 2012
· No increase in current interest rates (unlikely!)

This pays off a mortgage at September 2012 of £46,282 with £1,552 to spare.

Investments have improved since my last post. :j
The market has recovered its falls in early March, but the shares/cash ratio (55.4/44.6) still does not indicate a need to change strategy.

The endowment valuation was a little below expectations, but it is still on target to reach the value quoted above at September 2012, based on a 6% return.

With a predicted surplus calculated at September 2012, but with possible risks to in the endowment valuation, I have decided to continue my overpayments to the mortgage at £50pm for the forseeable future.

There is a savings contingency fund which is not included in the total above; suffice to say that if added to the endowment and investments, it would clear the mortgage. My strategy is to review the situation monthly; when my fixed rate ends in November 2011 I will then re-determine the best approach for reducing the mortgage.

Hope everyone else is on target, and good luck for the rest of 2011

SmileyG

Kez100

Well done! We are in a similar position (including a history of repaying negative equity to move). We also have a crappy endowment and just want our mortgage cleared, so our home is our own.

We have been overpaying big time since the rate dropped (we are luckily on a +0.69% lifetime tracker) and now have a mortgage balance of 38k and 2016 endowment projection of £35k (should have been £52k). We will carry on repaying just in case rates rise again (I remember, like you will, 15% in the 1990's!) and being on a tracker we are exposed unless we bring the balance down.

We have some investments too but are keeping those out of it because I have little pension to speak of (although Hubby has a company career average one) and we may even move in five years time, so will need those to enable us to move and stay mortgage free.

Enjoy watching your deficit shrink!

originalmiscellany

First time I've read your profile/thread today. Makes interesting reading. Well done on getting your mortgage down to under 48k - it's nice to see your regular posting where the amount keeps on dropping, really encouraging. It's also great to see how you've gone from a 2014 end date to Sept 2012 - very well done!
Have added you to any other updates, as an inspiration to us all. Well done.

SmileyG_2

Kez100 wrote: »

Well done! We are in a similar position (including a history of repaying negative equity to move). We also have a crappy endowment and just want our mortgage cleared, so our home is our own.

We have been overpaying big time since the rate dropped (we are luckily on a +0.69% lifetime tracker) and now have a mortgage balance of 38k and 2016 endowment projection of £35k (should have been £52k). We will carry on repaying just in case rates rise again (I remember, like you will, 15% in the 1990's!) and being on a tracker we are exposed unless we bring the balance down.

We have some investments too but are keeping those out of it because I have little pension to speak of (although Hubby has a company career average one) and we may even move in five years time, so will need those to enable us to move and stay mortgage free.

Enjoy watching your deficit shrink!

Hi Kez100

Thanks for your comments.

As I said in my earlier posts, I reckon the endowment was one of the worst things that I did. As an investment, you have no control over the outcome, and we are all locked in for a stupid number of years, and the people who manage it don't have to answer to anybody! (Rant over:mad:).

As soon as I see a reasonable exit point, I'll get out; at the moment the endowment returns are beating cash and both the current (5.19%) and future (2.5%) mortgage rate.

SmileyG