Our journey

pb63

Hi there all,

Well after reading a couple of stories on here I thought I’d share our journey.

My wife and I are 28 years old and we got our mortgage 5 years ago at 135K with Nationwide purchasing a property for around 170K. We started just paying the normal mortgage amount (around £700) but it didn’t take us long to realise that we were only really servicing the debt and making a minor dent in repaying the capital. I think the penny dropped, excuse the pun, at the end of the first year when we received our statement from NW. Being quite shrewd anyway we decided to start making the overpayments of £500 per month and quickly became addicted. I modelled the mortgage life and through various spreadsheets it’s been really interesting to see the impact our actions are taking. We also started playing around with the term of the mortgage, reducing it to increase the monthly payments. Our highest ever monthly payment was 10.5K!! Just to kill a bit off the capital…

Since then we have been on a couple of 2 year fixed rate deals and so when we came to re-mortgage paid off lump sums. Being pretty miffed about the costs associated with remortgaging, I like to think we’ve made more than that back in all the overpayments and resulting interest saved :0) Our last deal we decided to fix for a longer period 5 years because interest rates were so low and we thought they would surely rise. In hindsight this was an oversight and we wished we had stayed on a lower rate but hey hindsight is great isn’t it! Nevermind we are still on track to pay off our mortgage by next Oct. so we’re on the 1 year count down and as at this month we owe only around £27K!!!. I can’t wait to be mortgage free before I turn 30!

And the sacrifices…well not many really. We got married last April and that was the only significant outlay and even then we did it on a Thursday to keep the costs down – albeit the Thursday before GoodFriday and the longest weekend of the year so it worked out really well. Other than that we’ve tried to live our lives quite controlled. We both have good jobs thank god but have just been uber disciplined. Things like gym membership went as did unnecessary contracts for phones and we both run 10 year old cars. We have a little in savings but to be honest, we have ploughed this into the house. It didn’t make sense when the interest rate was so low on the savings a/c and the mortgage was charging 4+ % on such a large sum. I think that last point is overlooked by a lot of people when weighing up to save or reduce their debt. It’s the absolute values that matter not the % rate per se. And the overpayments we have made are of course still accessible should we need any rainy day money.

Anyhow, great to read there are other people who are doing this. I just wanted to share our journey which will hopefully inspire some more people. This will for sure be the best things we have ever done and I can’t wait to get that first pay packet which is mortgage free…Good luck to you all.

Baby_steps_2

Well done you, I think you ahve done an amazing job to achieve somuch so young. If only I could be in the same position!!!

What do you plan on doing now you ahve finished the first mortgage? Are you planning on moving on to a bigger property or just enjoying the freedom?

pb63

Baby_steps wrote: »

Well done you, I think you ahve done an amazing job to achieve somuch so young. If only I could be in the same position!!!

What do you plan on doing now you ahve finished the first mortgage? Are you planning on moving on to a bigger property or just enjoying the freedom?

Thanks! Our plan for next year is to start a family and hopefully with the timings planned, we coincide the family with the mortgage ending :0)

We did put our house on the market over this summer and had our eye on a larger property, but it fell through for us. With house prices coming under pressure we've decided to stay put until next year, and so have just taken our house off the market. I think we may stay where we are for another 1-2 years. We're happy where we are as it's in a really nice location - it's just we fancied more space - but while there's only 2 of you there's no rush. So I think we'll save up for a deposit and go all out on our dream house with a manageable mortgage.

Life is too short tho. and so I think once we've got the mortgage monkey off the back we will be treating ourselve :beer:

SmlSave

Welcome to MFW pb63

AnnaBeth

Thank you very much for sharing you have given both my and dh a lot of inspiration esp as aspects of your finances are so similar to our own.

I have realised only this week about the way % rate isn't everything and am now going to cancel our saving account that will give us 4% on only £190 a month and put this straight into the mortgage, makes much more sense. It's a different way of looking at money and it's something you only work out once you think about it rather than blindly following the banks!

Good luck with the next year, enjoy the freedom

wynnvegas

Hi pb,

Sounds very familiar! As at today, I can attest that paying the thing off is a great feeling. Hope you get there as quickly as possible! Please keep everyone up to date with your developments.

Cheers,

Billy

pb63

Thanks for the comments guys. We'll defo. be updating - Just on countdown now and if my spreadsheet's right our last full month payment will be in Sept. 2011 with a small payment in Oct. to get it down to £1. Can't wait!!

Then, it's saving time for the next house...and maybe a couple of luxeries... :-)

dimbo61

Consider offset for your next mortgage with unlimited overpayments !
We are with YBS and have made big inroads into out debt

pb63

Wow, doesn't time fly when you're having fun! Down to the last 2 months months now. Can't believe how quickly this last year has gone.

Baby is due in November which will coincide with the mortgage payoff!

If and when we get another mortgage we'll definitely consider offset. At the moment we have more savings than mortgage which doesn't make much sense at the moment. But I guess it's gonna come in handy for all the baby stuff!

Roll on November!

abouttimetoo

Hi PB

When I started reading your thread I hadn't realised that it was last years so it was fab to get to the last post and see that not only is the finishing line in sight but the baby you mentioned as a possibility last year is nearly with you too!

Congratulations on all you've achieved, it must be a great feeling and will stand you in good stead for the future

Best wishes for the new arrival

Regards
ATT

adwat

Hi pb

Congratulations and well done! you're nearly there and congrats on the baby - just think of all the spare money you'll be able to spend in a couple of months.

Alan