Mortgage free in 5 years

cha97michelle

£7k is definitely high for a new bathroom. In summer we had a new combi boiler installed (moved from kitchen to loft) and had a full bathroom refurb which included moving the location of the bath,sink and toilet and removing the water tank. We paid just over £7k for all of this. You need to try and get someone smaller and local to do the work. We were quoted £15k which we knocked down to £12.5k for the exact same work from a company that designs bathrooms.

haras_nosirrah

A few updates.

Have managed to get bathroom quote down to 4k by getting a recommendation from a friend of someone who he says is very good and will do all plumbing, electrics, plastering and tiling. Much better than the 7k - 10k quoted by other places - funnily enough never had the official quote through from one of these retailers - guess the look on my face said he was wasting his time.

Am in a bit of a quandry

We have 5k at the moment in the overpayment reserves we can borrow back. Not sure whether to take this out and get bathroom done asap or to save seperately and get the bathroom done at the end of the year???

Another slight quandry

I currently pay a lot of money into a pension - 15% of my salary so about £360 a month (am 27 and have been paying around this amount since sept 08) I pay via salary sacrafice so saving tax and NI but the company doesn't contribute. Am not sure whether to stop or highly reduce the pension in favour of OPing

Any thoughts?

EconomicSlave

Best of luck with the 5 year plan!

haras_nosirrah

bit of advice please

We have two bits on the mortgage. 33k on a fix of 4.28% with 14mths to go and 78k on a 1.03% above base tracker for life of the mortgage (currently 3.03% owing to Nationwide cap at 2%)

I was going to concentrate on overpaying the fixed as it was the higher rate and try to clear this bit in 3 years but now it looks like rates are going to increase should I switch attention to the tracker instead so the impact of any increase won't be felt as much. I am going to change the term on one product in Jan as I am getting a substantial pay increase and wonder which to go for.

Any thoughts?

SeriouslySeekingtoSave

haras_nosirrah wrote: »

My name is Sarah and I want to be mortgage free by Christmas 2015.

Initial target - Get mortgage down to 95,000 by christmas 2011. Wish me luck

Definately the best of luck. I've just joined this site, gotten a mortgage and am looking at being MF in about 8 years. Hmm, I wonder if I could manage 5 if I really tried? You know I think I probably could...

SeriouslySeekingtoSave

haras_nosirrah wrote: »

bit of advice please

We have two bits on the mortgage. 33k on a fix of 4.28% with 14mths to go and 78k on a 1.03% above base tracker for life of the mortgage (currently 3.03% owing to Nationwide cap at 2%)

I was going to concentrate on overpaying the fixed as it was the higher rate and try to clear this bit in 3 years but now it looks like rates are going to increase should I switch attention to the tracker instead so the impact of any increase won't be felt as much. I am going to change the term on one product in Jan as I am getting a substantial pay increase and wonder which to go for.

Any thoughts?

The interest rates have been going to rise for the last two years. It's a given that they must at some point. The exact timing is left open to question though.

I also have two mortgages, one part of it fixed and the other Tracker. I have been overpaying the Tracker but only because that is the same interest rate as the fixed (3%) and it makes sense to do. If interest rates do rise in the next few months or so (and I'm not particulary thinking that they will), if you have your fixed at 4.28% the rate will have to raise over 1% and I really can't see that happening in one hit.

I'm not a financial expert but if I was you I would keep paying the mortgage that is definately at the higher, rather than one that 'might' become one if the rates sharply rise.

SeriouslySeekingtoSave

haras_nosirrah wrote: »

A few updates.

I currently pay a lot of money into a pension - 15% of my salary so about £360 a month (am 27 and have been paying around this amount since sept 08) I pay via salary sacrafice so saving tax and NI but the company doesn't contribute. Am not sure whether to stop or highly reduce the pension in favour of OPing

Any thoughts?

15% is a hell of a lot, I thought so at the time when I read your opening statement, but thought, 'hey, it's up to her'.

I have a pretty generous employer (well sort of) who has a very good pension/benifits package. I currently pay 3% of my salary and work matches. The tax from both of these is given back and also goes into the pension fund. Then work also gives an extra 3% of salary which can be put onto extras (like childcare vouchers and the like), taken as extra salary or put back into your pension. I choose to put that into my pension as well. At the end of the day something like 9% of my gross salary goes into my pension plan at about the cost of me losing around 2.7% off of my actual net salary. Not 100% sure of the figures as I'm not a mathmatical wizz but it was something like that.

I did the calculation with the pension man; taking that figure into account and a retirement age of 65, assuming an average inflation figure and a returns of around 6 or 7 % I believe it was, I would have more spending money based on that pension plan alone than I am currently spending monthly now. This is not taking into account any government assistance or any private savings, ISA's etc. I was pretty staggered considering I have left my pension run pretty late in life. I'm sure you know how it is 'Oh, I'm young and I've got all the time in the world'. Suddenly I'm not quite so young, I (didn't) have a house, any savings (although no debts) and no pension plan.

The point of all that is: How much you put into your pension is up to you. But remember that anything that goes into it you can't get back (until you're much older) and that a house is (nearly) always as sound an investment as you can make.

golfiematt

dont put all your eggs in one basket. Ive heard many stories of people loading their pensions up and being promised x amount back. If its too complicated to work out yourself then you are trusting someone else to make judgements on your behalf and usually they can take a cut of your pension in doing so. Personally i think property is better to invest in as more often than not you can get back your investment when you need it (granted there are no tax breaks in this). Im not trying to put you off investing in pensions but just keep your options open.Good luck with your challenge!

RosieTiger

I wouldn't rush to reduce that pension contribution, you must presumably be paying 20% tax now, but if the big pay rise comes in be at or about the 40% threshold. Pensions are a long term investment but if your paying gross there are few things that will ever match the 40% gain you will achieve on the pension.

golfiematt

RosieTiger wrote: »

I wouldn't rush to reduce that pension contribution, you must presumably be paying 20% tax now, but if the big pay rise comes in be at or about the 40% threshold. Pensions are a long term investment but if your paying gross there are few things that will ever match the 40% gain you will achieve on the pension.

you pay tax on your pension when drawing it. Plus you need to be lucky enough to get to the age to draw it thats all im saying. Its not as lucrative as people would have you believe.