Mortgage free in 7 years

Good to read threads from many like-minded people. My story:

We were very late to mortgages/property as we travelled a lot with my job, so rented until 2006 when we finally bought a property, aged 35. At the time we had 2 incomes and took on a pretty big commitment of £300k, buying a house for £350k, fairly modest given we lived in London at the time.

We now have 2 young children and only my income so suddenly the mortgage payments seemed huge, so we decided to take action to clear the mortgage asap. We have done well so far, having reduced it to £220k in 3 years. We've done this by me chasing promotions and getting them, being extremely careful with our spending (no mobiles except my funded work one, no cable TV, no gyms, meals out rarely, cheap car, cheap holidays, few luxuries etc). Also 18 months ago I applied for and got an expat role in France. The expat role means we get free accommodation in France and now have tenants in the house in the UK covering about 60% of the repayment mortgage so its helped a lot.

We aim to have the mortgage down to £150k in 2 years when we finish my current expat contract and our goal is to find another expat contract somwhere and have the mortgage fullu paid off by 2016, when I will be 45 and our eldest child will be 9 years old. In my current role I get share options which if markets recover to normal levels could be worth c£100k when they mature in three tranches in 2012, 2013 and 2014 so I am hopeful we will be mortgage free 3 years before the target we have set ourselves. Also I am chasing another promotion for my next expat role.

For us there have been no easy options. Simply me working very hard, chasing promotions and sacrificing to some extent family time with our young children in consequence. Also very careful budgeting and scrutinising every purchase for need and value for money.

Anyway, congratulations to everyone who is mortgage free or well on the way. Some very inspiring stories on here that have given me the extra motivation to push on.
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Replies

  • Congratulations on progress so far PipPip, all the sacrifices can't be easy but hopefully well worth it in the end. I admire your sense of adventure! Children who grow up in more than one country are actually very lucky, I think. Hope you keep going and somehow find time to keep the thread updated.
    :T:j :TMFiT-T2 No.120|Challenge started 12.12.09|MFD 12.12.12 :j:T:j
  • setmefree2setmefree2 Forumite
    9.1K Posts
    Mortgage-free Glee!
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    Smiley%20Welcome.gif



    to the MF board. Look forward to reading about your progress.
  • PipPipPipPip Forumite
    129 Posts
    Well, after being off work for the whole of August I am pleased that we managed to spend quality family time without spending much. Our holiday was free this year as a friend gave us use of their farmhouse with pool in the Dorgogne for 2 weeks since they had no bookings and it would be empty anyway. Then we self catefered apart from the odd lunch here and there. Dinners in restaurants are too difficult anyway with a mad 2 year old and hungry 12 week old demanding to be breast fed by my wife every hour. So after a whole month at home we are still managing to transfer a surplus of 4,000 euros this month as an overpayment on our mortgage. I'm chuffed with that.
  • JonbvnJonbvn Forumite
    5.6K Posts
    Part of the Furniture 1,000 Posts
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    I would agree that a few years of expat work is an excellent way to set yourself up financially. I worked as an expat for several years getting a good tax-free salary. This allowed us to buy a much bigger/better house, than if I had just worked in the UK.

    Interestingly, two friends from Uni. also did the same as us.
    In case you hadn't already worked it out - the entire global financial system is predicated on the assumption that you're an idiot:cool:
  • PipPipPipPip Forumite
    129 Posts
    As well as the financial rewards its fun. Makes life more difficult with a toddler and baby though, no family help on the doorstep and all that so it can be quite a strain sometimes. Financially it worked out well so far as my employer looked at my UK salary and multiplied it by 1.5 euros back in Feb 2008 to work out what to pay me in France. The pound then plummeted so the exchange rate worked for us. Also they pay our rent in France and we have tenants paying rent in the UK, so that rent is a bonus. Then they give me share options in April each year with a purchase price of 20% less than the average price of the prior 10 weeks. This year that meant 20% than the lowest the share price has ever been on average, so longer term they could be very valuable. On top of that we pay UK national insurance, way lower than French social security, and French tax which is way lower for us than UK (as its based on a family, so children and non working spouse greatly reduce the tax bill). In total we paid tax and NI combined of only 12% of my gross salary in 2008 and that will drop in 2009 since we had our second child. So overall we are definitely about £30k to £40k better off net per year plus the share options could add a bonus to that in the future. Well worthwhile for a job which is also more interesting than my UK one.
  • PipPipPipPip Forumite
    129 Posts
    Maybe I should rename my thread: "UK" mortgage free in 7 years. I should mention that in additional to the £300k UK mortgage that we took out in 2006, we had taken out a Euro125k mortgage the year before to buy a French leaseback ski apartment. That mortgage however is fixed at 3.49% for 25 years, so not much point in making overpayments. Also, this is quite complicated, but we received the rent on the leaseback up front as a reduction in purchase price so currently we pay the 800 euros per month mortgage and have no ongoing income from the apartment to cover it. However, in 5 years time the current leaseback expires and we will sign up a new one with the property manager which will provide an ongoing income to contribute to and possibly even fully cover the mortgage costs. I won't go into all the details of the leaseback unless anyone asks but will say that some on these forum dismiss them as low yield investments. In terms of rent, true. But the whole point is to buy cheaply off plan in a growth location, which we did. We paid 200k euros in 2005 (price agreed in 2004 pre-construction) and similar apartments now sell for 375k euros, so overall we are very happy with our investment choice, which is totally hassle free.

    Anyway, that's enough, just wanted to clarify that we will still have a mortgage in France, current balance around Euros 105k, but we got such a good deal on it and future income from the apartment should cover it, that its not an issue.
  • PipPipPipPip Forumite
    129 Posts
    A good weekend in Paris. Lovely weather and we spent very little money - a walk in one of the forests outside of Paris on Saturday afternoon and a kids party on Sunday. I bought a chicken on Saturday morning which I cooked for lunch on Saturday with salad, I then made the leftovers into chicken/egg fried rice for supper, then with the carcass I made some home made chicken stock on Sunday which I will use as a base for a casserole next weekend. Yes, despite being a guy I do all the cooking at weekends as well, and my wife will agree, I'm a better cook. My brother is a head chef and I worked alongside him in my free time whilst I was a student. Generally I try to cook large pots of freezer friendly food like casseroles, large lasagnes, shepherds pies etc for the freezer so that my wife, who has the job of looking after our 2 year old and 3 month old can simply defrost proper meals the during the week. I am never home in time for dinner Monday to Friday anyway, usually arriving around 9pm, so I tend to eat a cooked lunch in our heavily subsidised staff canteen (well its a French company so put all ideas of a UK staff canteen out of your head, it does good restaurant quality food for a couple of euros!). Kids party: this will sound cheap, I apologise, but when we had our daughters 2nd birthday party we got so many presents that we put some in the cupboard and yesterday we wrapped one of them up as the gift. Our way of recycling. It was a different crowd to those who came to our party so no issue, except the moral one, which we will live with!
  • edited 11 September 2009 at 4:16PM
    PipPipPipPip Forumite
    129 Posts
    edited 11 September 2009 at 4:16PM
    More good results this week.

    With our leaseback ski apartment we are allocated 3 weeks per ski season for our personal use, valued high, medium and low depending on dates. This year the property manager offered to exchange the one high week for three low weeks. Did this, so we are left with 1 medium and 4 low weeks for personal use. Decided to use the medium and one of the lows ourselves and advertised the other 3 low weeks for sale at 625 euros per week on a free forum. Normally we get about 800 euros for the high week when we sell it, so we swapped 800 euros worth for 1875 euros worth. Sold all three weeks in two days, so 1875 euros towards the mortgage.

    Also my wife sold a piece of furniture that is surplus to requirements for 125 euros.

    Finally we submitted all our medical bills to our insurer from the last few months a few weeks ago and forgot about it. They emailed today to confirm they are paying 1,000 euros into our bank account next week.

    So extra/surprise income of 3,000 euros this week, all going into the offset account.
  • wantabetterlifewantabetterlife Forumite
    1.3K Posts
    Part of the Furniture
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    Brilliant progres:j Well done:j
    Mortgage [strike]£177,750[/strike]£149,488
    Overpayments 2016 £2053.58 2017 £3417.70 2018 £5180.78 #26 2019 £2435.35
    Daily interest £19.91:eek: £15.28 :eek:£8.94
    BUY TO LET MORTGAGE [STRIKE]£111408 [/STRIKE][STRIKE]£109975[/STRIKE] £94,779
    14.9 % paid
  • PipPipPipPip Forumite
    129 Posts
    Well its been a tricky few months financially since I last posted. I received my French tax bill (a mere £8,000), we had lots of issues with our UK home due to the weather and not all covered by insurance (£1500), car needed a service which blew out into new tyres and some issues to be fixed (£700), we went skiing (£1,000), we went back to UK for christmas (£500), French gas provider took a reading and decided we had underpaid for 2 years (£3,000 catch up in one hit), we received all our car/motorbike/home insurance renewals at once (£1,200). All this in the past 3 months so needless to say we've paid off nothing extra and have net drawn down on the mortgage offset account.

    However, the good news though is that I had my annual review at work and was told I have the maximum possible grade for 2009 (A+ meaning "always exceed expectations in everything you do" on a scale that runs D-, D, D+, C-, C, C+.....A+). This means I will get maximum bonus and maximum share options for 2009, to be paid in March and will be around £30k bonus and £20k worth of share options. The £30k bonus will go straight into the mortgage offset account and allow a bit of a catch up after a very painful few months. Also means I get a 10% payrise in 2010 from April.

    So a tricky few months, so self inflicted (skiing) and much not. It felt like the heavy heavy demands for money were never going to stop. From March/April though the balance will shift back in our favour.
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