Mortgage free by September 2014 (or before!)

SmileyG_2

Here's my update for March 2012......

Mortgage at 03/03/2012
Outstanding balance: -£46,533
Estimated endowment value: £27,401 (value @ 14/12/2011):(
Investments: £17,223
Deficit: -£1,909

I've made another share purchase (see below)

Previous September 2012 targets (last month) were ....

Outstanding Mortgage at September 2012: -£46,282
Predicted endowment value at September 2012: £29,171
Predicted investment value at September 2012: £18,213
Estimated surplus: £1102


Current September 2012 targets (today) is ....

Outstanding Mortgage at September 2012: -£46,242
Predicted endowment value at September 2012: £29,171
Predicted investment value at September 2012: £18,510
Estimated surplus: £1439


Investments have charged on in the last couple of months, which means that I could even eliminate the deficit by June. Getting impatient now....

I've also made a small investment in TESCO shares. The important factor here is that I see the current setback for them as a temporary issue, which now means that the shares yield a dividend of over 4.5%. This is versus a mortgage rate of 2.5% and is a long term investment. The percentage of cash/shares is now 52%/48%

My endowment company have made an announcement about the annual bonuses. It's not rip-roaringly exciting and may have an impact on the September 2012 valuation that I have here. Will update at the end of the month.

I still am making an overpayment (£10 per month ), it's just a nominal amount so that I don't have to cancel the payment arrangement; I can increase it if I need to to keep the strategy on target. For anybody who wants the challenge of making overpayments in 2012, can I recommend the 2012 MFW thread?
http://forums.moneysavingexpert.com/....php?t=3637943

Will I pay the mortgage off in 2012?
Maybe not, here's the reasoning.

When my endowment has acheived the £29,000 figure identified above, I will be surrendering it and paying down a large chunk of the mortgage. That leaves me £18,200 to pay.

With the latest investment, predicted income from my investments is now £584 pa. Interest on £18,200 borrowed at 2.5% pa is £455 pa. The £18,000 would be on an 'interest only' basis until 2020.

Will it work? I hope so but only time will tell....

Still smiling...:) and getting impatient:p:angry:

SmileyG

SmileyG_2

Just got an endowment update and have updated my signature.

It's all good news (more to follow.....)

Smiley G

SmileyG_2

Here's my update for April 2012......

Mortgage at 14/04/2012
Outstanding balance: -£46,533
Estimated endowment value: £28,353 (value @ 23/03/2012):(
Investments: £17,483
Deficit: -£620

Previous September 2012 targets (today) is ....

Outstanding Mortgage at September 2012: -£46,242
Predicted endowment value at September 2012: £29,171
Predicted investment value at September 2012: £18,510
Estimated surplus: £1439

New September 2012 targets (today) is ....

Outstanding Mortgage at September 2012: -£46,233
Predicted endowment value at September 2012: £29,348
Predicted investment value at September 2012: £18,444
Estimated surplus: £1560

Investments have fallen back in the last two days, which means that I could even eliminate the deficit by June. Getting impatient now....

No new share purchases. The market has fallen back over the last couple of weeks so I'm keeping my powder dry, but I have around £570 set aside for investment purposes. The current Cash/Shares ratio is 53.2%/46.8%.

The best news was about my endowment. The surrender value has increased significantly, which has increased my valuation at Sept 2012 to £29,348. I may just hang on to see if it can make £30,000, but I'll review it at the end of June.

No overpayments this month... It's a month where I have Car servicing and Car insurance, although the car insurance was £100 cheaper than last year (well I did hit a the half century this year...)

The possible strategy after September 2012..

With the latest updates, predicted income from my investments is now £586 pa.
If I surrender the endowment and pay down the mortgage, then interest on £16,885 (£46,233-£29,348) borrowed at 2.5% pa is £423 pa. The £16,885 would be on an 'interest only' basis until 2020, givingg me a surplus of £153 pa. The remaining mortgage becomes self financing.....

Will it work? I hope so but only time will tell....

Getting impatient.....:p:angry:

SmileyG

BFM

fantastic detailed diary.

you are so well organised!

kind of did it the same way as you with a combination of overpayments, cash and S&S ISAs to be mortgage free in 'aggregate'. Luckily didn't have the endowment noise to make it trickier to see what is going on. and certainly was far less disciplined and a little more ad-hoc which certainly slowed us down a little. we finally clear the last £1k or so off our mortgage next year when we can pay off the last bit without getting early redemption fees.

SmileyG_2

BFM wrote: »

fantastic detailed diary.

you are so well organised!

kind of did it the same way as you with a combination of overpayments, cash and S&S ISAs to be mortgage free in 'aggregate'. Luckily didn't have the endowment noise to make it trickier to see what is going on. and certainly was far less disciplined and a little more ad-hoc which certainly slowed us down a little. we finally clear the last £1k or so off our mortgage next year when we can pay off the last bit without getting early redemption fees.

Thanks for the compliment! Might not pay off the mortgage when the deficit has gone' but it will be nice to be in a position to do it!

SmileyG

SmileyG_2

Here's my update for May 2012......

Mortgage at 01/05/2012
Outstanding balance: -£46,408
Estimated endowment value: £28,353 (value @ 23/03/2012)
Investments: £17,605:D
Deficit: -£440 (oo-err...)

Previous September 2012 targets (today) is ....

Outstanding Mortgage at September 2012: -£46,233
Predicted endowment value at September 2012: £29,348
Predicted investment value at September 2012: £18,444
Estimated surplus: £1560

New September 2012 targets (today) is ....

Outstanding Mortgage at September 2012: -£46,233
Predicted endowment value at September 2012: £29,348
Predicted investment value at September 2012: £18,435
Estimated surplus: £1550

Little change in the last two weeks; The buildings and contents insurance has been paid for the next 12 mths and managed to negotiate a £40 cash back (due in September). If you don't ask, you don't get!

No new share purchases. The market is oscillating at the moment, but I have £969 allocated for investment purposes. The current Cash/Shares ratio is 53.8%/46.2%.

Next endowment review is 30/06/2012. As previously stated I may just hang on to see if it can make £30,000, but I'll review it at the end of June.

The possible strategy after September 2012..

See my previous post. ... The only change of strategy is that Nationwide have created an Instant Access ISA which pays 4.25% pa, so my new cash deposits are going into the new ISA account.

Following the red brick road...

SmileyG

SmileyG_2

Here's my update for June 2012......

Mortgage at 01/06/2012
Outstanding balance: -£46,350
Estimated endowment value: £28,363 (value @ 23/03/2012)
Investments: £17,499:eek:
Deficit: -£488 (oo-err...)

Previous September 2012 targets (today) is ....

Outstanding Mortgage at September 2012: -£46,233
Predicted endowment value at September 2012: £29,348
Predicted investment value at September 2012: £18,435
Estimated surplus: £1550



New September 2012 targets (today) is ....

Outstanding Mortgage at September 2012: -£46,233
Predicted endowment value at September 2012: £29,348

Predicted investment value at September 2012: £18,079
Estimated surplus: £1194


The big theme over the last month has been investments. Uncertainty in Europe is really playing on the minds of investors and may force the market lower. There is opportunities for further share purchases but not at the moment.
I have £1,022 allocated for investment purposes. The current Cash/Shares ratio is 55.4%/44.6%.

Next endowment review is 30/06/2012. As a rule, a fall in stockmarkets usually results in a fall in the endowment value, so it may not be good news..

With the long bank holiday, I've looked back at my original targets in August 2009. If I run the mortgage through to September 2014 the comparison is....


Outstanding Mortgage at September 2014: -£44,796 (was £48,941)
Predicted endowment value at September 2014: £33,800 (was £30,800)
Predicted investment value at September 2014: £25,497 (was £18,141)
Estimated surplus: £14,501 (was £0!).

The difference has been acheived, by improving investment returns and falling interest rates and £8,000 of overpayments. All of these actions have effectively moved the potential mortgage free date forward by 2 years, It's been tough but worthwhile and being within touching distance of having the mortgage totally offset is a good feeling. If only the politicians could sort out the pesky Euro....

Following the red brick road...

SmileyG

SmileyG_2

Nearly there.....

Mortgage at 16/06/2012
Outstanding balance: -£46,350
Estimated endowment value: £28,363 (value @ 23/03/2012)
Investments: £17,592
Deficit: -£395

Next update on 29th June will include an endowment valuation

Will it have fallen. Who knows...

SmileyG

SmileyG_2

Here's my update for July 2012......

Today is a big day for me. The mortgage is now totally offset!!

Mortgage at 01/07/2012
Outstanding balance: -£46,291
Estimated endowment value: £29,120 (value @ 29/06/2012)
Investments: £18,143
Surplus = £972 :beer:

Previous September 2012 targets (today) is ....
Outstanding Mortgage at September 2012: -£46,233
Predicted endowment value at September 2012: £29,348
Predicted investment value at September 2012: £18,079
Estimated surplus: £1194


New September 2012 targets (today) is ....
Outstanding Mortgage at September 2012: -£46,233
Predicted endowment value at September 2012: £29,120
Predicted investment value at September 2012: £18,419
Estimated surplus: £1036

It's been a long journey that really started in 2001 (see my first post). It was aided by a number of factors; tho most significant has to be the £8,000 of overpayments that I made from savings. On that basis, the mortgage now owes me £8,000!

I also started investing the surplus from my mortgage budget of £500 per month after the mortgage and the endowment premiums. This has enabled me to reach the current figure for a capital investment of £11,221 (a gain of £6922).

My dilemma now is what happens next?

At the moment the Nationwide is lending me the money at 2.5%. Can I get an investment return of £1150 over the next 12 months to make the morgage self funding. I think I can, so for the moment my strategy remains unchanged, namely...

• Pay the mortgage
• Continue paying the endowment premiums
• Continue to invest.

The strategy will be measured as successful if the surplus is £6,972 at this time next year. It's not a strategy that may suit everyone, but it's flexible enough that I can pay off the mortgage if economic circumstances change.

Can I claim to be mortgage free? Not really, but I can now claim to be a MFWIWTB! (Mortgage Free When I Want To Be!)

SmileyG

DawnW

Well done on becoming MFWYWTB(?)

I am hoping to be in a similar position either this month or next - not offset, but the same, or more, in savings, as I owe on the mortgage :j