My situation, target too ambitious??

northum

Here's my SOA, I want to know if you think I can make it. I like to work in round numbers so I want to be mortgage (and debt) free when I'm 30 (just before I turn 31 mind) which means march 2010. I want to be able to choose then what to do with the disposable income, maybe travel!

Income £1883 per month after tax

The original mortgage was £80000 over 25 years, which I took out 2 years 8 months ago.

Flexible mortgage remaining 75518, £477 per month @ 5.19%
Offset account £19558

Bills £165 per month (excluding food & fuel) I haven't itemised these as they are optimised
as far as possible.

Loan1 £1162 @ 0%, £83 per month
Loan2 £2400 @ 0%, £120 per month

I've got a stoozing card with £4948 on it. This is where some of the mortgage offset came from but since i got a bonus at work I thought I would try and save enough in a savings account to pay this back without dipping into my offset. Currently I have £3108 in the savings to offset the card. I know this isn't the perfect MSE way but I value the psychological advantage in not seeing the mortgage term go up at any point.

Currently my standard payments would pay the mortgage back in 13 years 9 months.

I've been overpaying and now it is a steady £500 per month. That means the term will be 5 years 6 months if I can keep this up.

That only gives me £538 per month for food, petrol, stooze card min payments, building up that savings account to cover the card balance, one off expenses (insurance, holidays, etc)
and living.

Those still paying attention will notice that I'm still 1 year and 11 months sort of my target mortgage free date. My only current thought to dig into this is future bonuses as I've not seen any other income generators which are open to me or that I can manage.

So I guess my question is, am I obsessed with paying this back? Am I already at the point where the overpayments are to the detriment of my life now and is it worth pushing even harder when the returns deminish in terms of saved interest?

End of ramble, feels good to write it down

tawnyowls

It's very impressive - to mortgage-free at 31 would be an admirable achievement, particularly as your income, while decent, is not in the stratosphere of City salaries.

Are you obsessed? I think only you can answer that. Are you happy with your life as it is? Do you feel you're missing out on anything, and by that, I mean anything important? If not, then continue as you are. Perhaps give yourself a bit of leeway - if you're MF by the time you're 33, that's still a huge achievement! We can't predict the future - your circumstances may change and you get more money in, interest rates could go down, you might find a mortgage at a lower rate; all these things could bring forward your MFW date. I think this will only be a detrimental thing if it means you're looking so much towards tomorrow that you forget to enjoy today.

northum

Thanks tawnyowls, its nice to 'speak' to people who understand and value what being mortgage free would mean.

Good point about enjoying today, I think I focus (worry?) about money because I have control whereas other aspects of life might not be so easy to quantify and evaluate!.

alanobrien

Outstanding effort.
There's nothing wrong with being obsessed with paying it off as long as you remember to have a life after all you only get one shot at it.

northum

Thanks alanobrien, I guess I value the more memorable "big" things and spend my money in chunks. It's tricky when the OH and friends like weekends away and stuff like that so they see me as negative for wanting to avoiding them. Anyone got any good strategies for deciding when to splurge and when to say no?

cupid_s

As you can see I hope to be mortgage free by 2011. Making me and my husband 29. And although our mortgage is currently less than what you owe, our rate is quite a it higher and we earn less than you so I don't think you're being unrealistic.
Unfortunately by the time we pay this house off we will need a bigger house but at least we'll have to whole value of this one as deposit.
Anyway, what I do is set a realistic amount that I am happy spending each week month on certain things - like holidays/weekends away, going out for drinks and eating out. For example I now have an absolute limit of £2000 per year for holidays including breaks away. If we want to go somewhere and it fits in that budget great. If not tough, we've had 2k worth of holiday how greedy do we need to be lol.
And if a friend asks us to go out for dinner and we've spent too much on eating out that month it's a straight forward no i'm afraid.
I'm sure you'd love to go away all the time, as I would but when you're 30 and mortgage free you'll be saving £477 per month (and when you take into account your overpayments you'll be nearly a grand a month better off) and then you wont have to worry about anything financial.
Just dont go without everything and i'm sure you'll be mortgage free by 30 or soon after

skippy64

I would go for it with no hesitation. I'm 42 in a few weeks time and have taken the decision to clear the remainder of our mortgage within twelve months before I'm 43 ( £11,500 approx remaining ). I wish I'd had the foresight at your age now to clear my mortgage. You're still a puppy anyway at only 27 and you've not got to the best age yet which for me was when I was 35. I felt like I was Captain Scarlet ( indestructable & could achieve anything !! ) at that age but now I'm in my forties it just seems a dim & distant memory !!

northum

Cheers all, your words are much appriciated! :beer: They should help me keep my focus!

comping_cat

I dont see anything wrong in being focussed on a goal that you have. I really want to be mortgage free as soon as i can, but i also want to enjoy life with my children. You know what you enjoy the most, so concentrate on those things and dont get swept away with others ideas. As tawneyowls says, if it takes an extra year to pay your mortgage off, you will still be so young to be mortgage free, and hopefully will have been able to do things that you have wanted to experience along the way.
Good luck.

Dr.Lou

Hi there Northum... your plan sounds very good... Good luck with it!

My husband and I decided in Novemer 2004 (when we remortgaged) that we wanted to have enough money saved to be able to get rid of the mortgage by the time I was thirty. That is next month and I think we may just get there in time (all things being constant).

It hasn't been so bad, we go out with friends often, have had holidays once a year (I think it's important not to sacrifice your leisure time/fun/ social life) ...just a case of being careful with money in general / not spending it on rubbish and keeping the goal in focus. Like you, any bonuses / unexpected cash went straight into the pot and that has helped a lot.

Best of Luck to you....keep us up to date on how you're doing!

gallygirl

Better to be obsessed with paying off your mortgage than obsessed with buying latest boy toys!!!!

As you already know, you need to strike a balance - you need to live a littel while paying this off. So, 2 strategies - make your money go further, and maximise your income.

Try money saving old style board to look for tips to cut down on shopping, cleaning bills etc. E.g. buy a whole chicken instead of breasts - Sunday roast, Monday chicken pasta bake, tues curry, weds soup, plus sandwiches etc. You need OH on board to make it work though.

Use all money off vouchers.

Maximising income - if it doesn't move, ebay it!!! Sign up with quidco, pigsback etc - quidco has some great offers on insurance for example, best bet is to use something like moneysupermarket.com to get quotes, then try quidco to see if teh company is on there. If you use holiday inn expresses at all you can get 1500 points per booking on pisback - 1150 points = £10 Boots vouchers - that's Xmas shopping taken hold of.

OK, it's all small stuff, but it all adds up. You should be able to pick up a month's payments a year this way!

Good luck.