First venture into MFW...

RenovationMan

I'm with dimbo on this, you either want to be Mortgage Free or you want to have a high level of savings. It's not normally possible to do both. I would ask yourself what sort of emergency you could have that would require £28k of savings? I would reduce this down to something more akin to 6 months of your normal outgoings to protect against job loss, with various insurances covering most other eventualities, especially if your mortgage rate is higher than your savings rate.

You either get a bigger buzz from seeing your debts go down, or you get a bigger buzz from seeing your savings go up. The net effect is eventually the same, either you will be mortgage free in reality (i.e. no mortgage) or you will be mortgage free on paper (i.e. savings are larger than mortgage). The only difference therefore is motivation. Will you be more motivated to see your savings increase, or your mortgage decrease?

I'm the latter, I love seeing my debts go down and seeing my monthly outgoings go down (which then frees up more money to overpay on my mortgage). I therefore retain 6 month's worth of our normal outgoings and every other spare penny is ploughed into our mortgage.

You just need to decide what motivates you and your OH and then stick with that.

Good luck with whichever goal you choose, they both have the same outcome in the end - financial security and independance.

Saver-Rob

I do agree with what you say but we both have to agree on it and although we still have fairly considerable savings some of this will be used up within the next 18 months on some fairly big projects at home. £300 is a compromise and a figure we are both comfortable with. My job is pretty safe but what with the financial problems out there who knows what is round the corner so I am comfortable having a good amount saved up.

In a year's time, if everything goes according to plan, we should have 2 fairly good wages coming in therefore we will almost definitely be able to put in the maximum £500/month.

Until then I am just happy I can make a start

setmefree2

FWIW we have savings as big as our mortgage - most of it is in a Cash ISA wrapper but we also have quite a large lump in a regular savings account just in case we need to buy a car (our's is a 9 year old Scenic, running like a dream but could need replacing any minute).

Saver-Rob

4 months of £300 overpaid now, total of £1200. Not sure how this would equate to what it will save me later but I'm very happy.

Saver-Rob

Just a quick update to everybody - we're still overpaying by £300/month and have overpaid £2400 now. Looking forward to our mortgage statement this month so see the figures on paper!

SeriouslySeekingtoSave

You guys have done amazingly well already. I REALLY wished I had started being so careful and serious with money at that earlier age. I'd be mortgage free and probably heading for a retirement of 50 right now lol:)

Saver-Rob

SeriouslySeekingtoSave wrote: »

You guys have done amazingly well already. I REALLY wished I had started being so careful and serious with money at that earlier age. I'd be mortgage free and probably heading for a retirement of 50 right now lol:)

Thanks alot. Finding the balance is still hard -one minute I want to spend money on the very best furniture (we're getting the living/dining room done) and the next I want to just put all of the money on the mortgage! I know this isnt reasonable as we dont want to be 'going without' for years to come. But I would like to 'up' the mortgage payment this year, as and when my girlfriend gets a job.

Saver-Rob

Mortgage statement received last month. Its nice to see our overpayment is starting to make a dent in the total figure owed!!

wantabetterlife

Well done Rob, its amazing how a mortgage statement becomes so much more interesting when you have been overpaying

Saver-Rob

Decided to 'up' my overpayment to the maximum penalty-free so from April onwards overpaying by £499.99/month.