MFW Diary - Is two years possible? Let's give it ago!

11cas

Hi everyone

I've been reading everyones diaries for a while now and I thought I would produce my own in the hope that it will help me in my journey to be mortgage free and I'd really appreciate all of your help and advice along the way.

So, where do I start...
Our first mortgage was for something like £107k and by the time we sold the house we had got the mortgage down to around £98k. We then purchased our current house in July 2007 for £245k and we needed a mortgage of £125k.

We are currently on a 3 year fixed rate of 5.69% which comes to an end in Sept 10. Through overpaying we have managed to get the mortgage down to just over £95k :j which I am over the moon about.

Being mortgage free had never been a big ambition in the past, although we had always made the odd (fairly large) overpayment because I thought it was better to pay off the mortgage than have a large amount of savings in the bank. However, it is now a big passion of mine to pay it off and I'm on a mission!

A few months ago we had talked about trying to pay the mortgage off quicker and then I saw the 'Mortgage free by 40 challenge' on here and I signed up to it (No. 5). We are both nearly 30, so that would have given us 10 years to do it in. But things have changed slightly since then - there was talk of my OH's job being on shaky grounds, so I'd love the pay off the mortgage ASAP and then the worry of job security won't be such an issue.

So I looked carefully at our finances (I am obsessed with spreadsheets and monitoring our income and outgoings!) and have worked out that it might actually be possible to pay off the mortgage within the next two years. That's assuming we both keep our jobs and my calculations are correct! I haven't factored in any emergency funds into my calculations so they are likely to be out a bit, but I figured give or take a few months wouldn't really matter - at least it gives us something to work towards. So we have a target of two years :eek:

I've based my calculations on getting an offset mortgage when ours is up in Sept, but I'll probably ask for advice on that along the way.

So there's my background and that's the start of my diary....

cha97michelle

Good luck. Aim for the stars and all that. Make sure you have some fun along the way though or you will end up having a blow out if you deprive yourself too much. Sounds like you have done quite a good job of overpaying already.

gerbiljo

wow this similar tho slightly more ambitious that what we are attempting, will be good to see how ur getting on and spur us on! good luck

CrazySaving

Sounds like you are doing all the right things already which puts you in a good position to meet your target. I think it is always good to have a target as it is something to work towards. I have put a thread up which has some tips and ideas for moneysaving - things I have picked up on my mortgage free journey, these might help you. Good luck and I look forward to reading more of your diary.

CrazySaving x

getmore4less

The advantage of the offset is that you create a lot of flexability if you do have variable income and can be the emergency funds.

Which offset are you thinking of?

The numbers

Just stick a 2 year mortgage into a calculator.
http://www.whatsthecost.com/mortgage.aspx

current deal.
£95k @ 5.69% is about £4197pm

FD offset
@ 2.49 £4104 (£96k with the 1k fees)
@ 2.79 £4075 (no fee, and the cheaper option)

Lowest you could do it is without interest so £95k/24 £3959.

So if you have £4k+pm surplus then you are on target

11cas

cha97michelle wrote: »

Good luck. Aim for the stars and all that. Make sure you have some fun along the way though or you will end up having a blow out if you deprive yourself too much. Sounds like you have done quite a good job of overpaying already.

Thanks very much. At the moment I am struggling with getting the 'living life' and 'paying off the mortgage' balance right! I've always been a bit of a saver and I'm now on a mission to pay the mortgage off, but I also don't want to put my life on hold... well actually I'd probably happily do that but the OH wouldn't be very happy.

I'm sure I'll find a balance

11cas

Hi Gerbiljo and CrazySaving,

I just wanted to say thanks for your messages - I'll start properly on the diary really soon...

Gerbiljo - I'll be checking out your diary, hopefully we can spur each other on!

CrazySaving - I'll be checking out your tips and ideas, I think I'm going to need as much help as possible! Although I'm really motivated in trying to make it happen, I think I can sometimes be a bit lazy in my manner - for example I really have to force myself into putting stuff on ebay, using the cashback sites for the free clicks etc. Although having said that I did list some stuff on ebay when they had their free listing and they are due to finish tonight - fingers crossed theres a bidding war for them!

11cas

getmore4less wrote: »

The advantage of the offset is that you create a lot of flexability if you do have variable income and can be the emergency funds.

Which offset are you thinking of?

The numbers

Just stick a 2 year mortgage into a calculator.
http://www.whatsthecost.com/mortgage.aspx

current deal.
£95k @ 5.69% is about £4197pm

FD offset
@ 2.49 £4104 (£96k with the 1k fees)
@ 2.79 £4075 (no fee, and the cheaper option)

Lowest you could do it is without interest so £95k/24 £3959.

So if you have £4k+pm surplus then you are on target

Thanks - I was thinking of the 2 year fixed FD offset deal at 3.29% (with £499 booking fee). (I've based all my calculations on assuming the mortgage term would be 5 years). We've always gone for fixed rates because I like to know what's going to be going out each month and I'd also worry about the rates increasing a lot making it unaffordable.

Our current deal doesn't end until the end of Sept, so I was going to start to look around next month and see what's available, but as it is I think the FD fixed offset would suit us best.

Here are some rough estimated figures of our situation as at the end of Sept:
Outstanding mortgage balance - £86k
Savings £36.5k (6.5k of that is credit card debt but it's on 0% interest)
We may be able to save an extra £1.5K a month to offset

Does that situation sound right for offsetting?

11cas

Hi Everyone,

It's been a long time, but I just thought I would do a quick update on what's been happening and how we are progressing.

We moved over to a fixed 2 year offset mortgage in October (3.79%) and it really suits us. I think we are on target to have our savings 100% offset our mortgage by the end of July this year - well that's the goal, but it might run into August.

Although we'll have our savings and mortgage offsetting, we will still have possibly £12k+ on credit cards, but they are all on 0% interest ones, and we hope to be able to save up the money in time to pay them off before the 0% runs out (if we haven't, we'll use some of the savings).

I would never have had the 'get up and go' to become mortgage free without reading all of your posts and experiences on here. It really has made me want this even more! So thanks to everyone :beer:

Until a few months ago I used to come on and read everyones diary nearly every day, but we've just got a new addition to the family (a puppy!). I would definately recommend getting a puppy if you're just counting down the days until you're mortgage free. I've not had time to look at my spreadsheets which means when I do get a chance to update them the balance has reduced by loads instead of the daily small decrease it used to be

Keep up the good work everyone :T

mortgage_girl

Wow - two years, that's amazing! :T Good luck, i'll be watching your diary with interest.

originalmiscellany

Good work that person