MFW - 30 years old, no kids, just a helluva mortgage

thriftyminx13

Hello all,

I feel a bit shy writing this, but then if no-one reads it, it doesn't matter as it's more of a wee diary/record for me.

As a lurker to the MF board, I am astounded at how well everyone does. And have decided I want to try too. I hate the feeling of having debt, especially as its so much. so here, so to speak, our my stats.

I am 30 years old and am on a base rate tracker mortgage, 0.9%, interest only (mostly) paying £90 a month on £121,000. I try to overpay where I can, but mostly if honest used my money to save for a big trip I went on in the summer and have been saving the rest (like a security blanket). So serious repayment begins now. I pay for the mortgage and my boyfriend pays me rent.

Mortgage £121,000
Savings £4,250
Rent from OH £230
Monthly wage c. £1400

Most of my outgoings seem to be on diesel and food. So there are my stats. I am hoping to take £7500 off the mortgage and up the savings to £7000. Any tips would be great, what should I overpay? Or should I save.

And thanks for reading!

SAMMYE_2

Hi ya,

Well done it will feel fantastic paying off your mortgage and that is an excellent rate you have at the moment so best make hay while the Sun is shining and pay off as much as possible.

How much deposit did you have and how much have you paid off?

Sam

thriftyminx13

No deposit! Got it in 2006-7 100% interest only mortgage! Imagine wouldn't get that now, but then wouldn't have got on the ladder as had no deposit. Mortgage was £125,000, so have only paid £4k in 4 years. Very bad I know!

Do you recommend using savings to pay off mortgage? Like having a buffer - just in case.

TF13

FlowerPower

Hi thriftyminx!
A new diary, how exciting!
Oooh, that number looks mighty familiar.. I was at 121k at the start of the year, also the start of the mortgage free in 2 take 2 (MFiT-2) challenge
I'm down to about 114.5k now, and I'm so pleased - all the motivation has come from being on this board, so watch out - it's addictive!
Also am turning 30 in a couple of months - so feeling happy to find such a similar MFW! Hope you don't mind if I follow your progress

I'm no expert, but the general feeling seems to be that it's good to keep some sort of buffer in savings (3-6 months pay). That way if there's an emergency like boiler breaking down, or issues with your job you have something to fall back on.
I think it depends a lot on how flexible your mortgage is - can you get the money back if you need it? And other things like how secure your job is, what your savings rates are like etc..

Ooh - and have you signed up to the MF 2011 challenge that Cake's running?
Best of luck with your journey! :beer:

thriftyminx13

Thanks Flower Power hope I can aim for the success you;ve had so far! Happy to have you watch and am hoping, like you say, that this board gives me the kick I need - the thought of having such a mortgage scares me. I am a civil servant so the security is hard to know, but I am confident I am safe. I do think I need some more savings just in case.

Signed up today and am nuber #148 in MFW2011 - if you have a diary, grateful for the link

TF13

financialbliss

Hi thriftyminx and welcome!

In a previous mortgage life (over 10 years ago), I had an interest only mortgage. In hindsight, I think this was a poor decision by me, but don't take that as me knocking your choice of mortgage vehicle.

Your rate of 0.9% - you will be able to get savings at a better rate than this, but depends on the flexibility of your mortgage, overpayments allowed etc.

Also bear in mind that the Bank of England base rate won't stay low forever. Here's some interest only numbers:

£121k @ 0.9% = £1,089 / £90.75
£121k @ 1% = £1,210 / £100.83
£121k @ 2% = £2,420 / £201.67
£121k @ 3% = £3,630 / £302.50
£121k @ 4% = £4,840 / £403.33
£121k @ 5% = £6,050 / £504.17

Bearing in mind that the historical average for the base rate is 5% that last value is starting to look scary.

How long does your tracker last for?

Have you considered switching to repayment? This will decrease your loan to value and will put you in a better position for other mortgage products once your tracker expires.

For now, if it was me, I'd look at the possibility of changing to repayment, but saving any overpayments that you make until such point that paying the money to the mortgage is better value than your savings rate.

Also depends on the T&Cs of your mortgage, e.g. could you quickly dump savings into your mortgage should the base rate shoot up, or are you limited, e.g. to 10% overpayment per year.

FB.

katsu

If you want to know places to save, then you might want to post the results of a statement of affairs - either from Martin's budget brain or the makesenseofcards site's template that the DFWs use. We can then chip in with ideas for you.

If you don't want to share it you could take a look at some of the posts on DFW with SOAs in and remember they are looking to cut bills to the minimum with the advice on that board. As MFWs we are not under such pressure (unless we want to be!).

Without seeing your expenditure here are some suggestions:

* breakdown cover. Autoaid is the best IMHO - £37p.a. for you and a spouse to have equivalent of top RAC/AA but you have to pay and reclaim if you breakdown (it is essentially an insurance policy).
* get a cashback credit card to get cashback on your spends like petrol and groceries, but pay it off in full every month.
* check all your DDs to see if you are paying for anything you no longer need
* check your utilities - should you switch? If so use a cashback site.
* Tesco vouchers. Can you use these for a magazine subscription instead of paying by DD, cheap meals out etc?
* maximise discounts - use Martin's tools for music and purchases, check tesco, nectar etc when you shop to see what you can get discounts on by using your vouchers/points
* register with Quidco/Top Cashback and use them for cashback on purchases at places like Halfords in the high street as well as online.
* swap around for insurance renewals and again use a cashback website
* consider signing up with survey sites to get vouchers towards treats or christmas gifts
* shop in the sales all year round. I gave Christmas pressies to 25 people for around £175. I get my Christmas cards in the sales and if I used giftwrap I'd get it now and put it in the back of the cupboard/loft.
* look into whether a water meter would save you money.
* find out if you can borrow an OWL meter or similar from your local library to see what your items cost you and help reduce usage.
* fit energy saving bulbs, turn things off, block draughts, line curtains etc.

I'm sure other people will have tips to add to this, but these should start you off...

someday_soon

Hi Thrifty.

Sound reasoning by FB as ever.

We always act positively regarding overpayments/savings. We set ourselves tough looking targets and look to adapt to reach them. The worst that could happen is that our circumstances change, but our efforts will make that change much easier to deal with.
So, act and be positive.

Welcome Aboard!

Someday Soon

P.S £230 is a steal:rotfl::D

thriftyminx13

Hi all, thank you for the replies

Financial Bliss - thanks for advice. I know that the interest rates will go up, but do you think they'd go up to 5% quickly - the flexibility at the minute I like and it means I overpay ? Luckily the base rate tracker I'm not tied into, but need to check specifics and there are no penalties for overpayments etc. Food for thought.

Katsu thanks for the tips - I must look at the SOA. Am on quidco and Toluna and yougov. We have no water meters over here in NI, you may have seen the news underinvestment = bust pipes. My electric is PAYG so only costs £20 a month at most. Must look at my life insurance think its far too excessive and was young when got in, think they've ripped me off. The Christmas pressie thing sounds amazing

someday soon thanks for the advice, I think this board will help!! Ha, not sure he thinks its a steal at £230! Am just going to have to make sacrifices and stop buying/paying for food (my fault - can't help it!)

TF13

thriftyminx13

SOA

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 1400
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 200
Total monthly income.................... 1600

Monthly Expense Details
Mortgage................................ 90
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 60
Electricity............................. 20
Gas..................................... 0
Oil..................................... 40
Water rates............................. 0
Telephone (land line)................... 30
Mobile phone............................ 15
TV Licence.............................. 15
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 200
Clothing................................ 50
Petrol/diesel........................... 200
Road tax................................ 12
Car Insurance........................... 40
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 5
Pet insurance/vet bills................. 10
Buildings insurance..................... 15
Contents insurance...................... 0
Life assurance ......................... 30
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 5
Entertainment........................... 100
Holiday................................. 60
Emergency fund.......................... 0
Total monthly expenses.................. 1017


Assets
Cash.................................... 4250
House value (Gross)..................... 105000
Shares and bonds........................ 0
Car(s).................................. 800
Other assets............................ 1000
Total Assets............................ 111050


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 121000...(90).......0.9
Total secured & HP debts...... 121000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Total unsecured debts..........0.........0.........-


Monthly Budget Summary
Total monthly income.................... 1,600
Expenses (including HP & secured debts). 1,017
Available for debt repayments........... 583
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 583

Personal Balance Sheet Summary
Total assets (things you own)........... 111,050
Total HP & Secured debt................. -121,000
Total Unsecured debt.................... -0
Net Assets.............................. -9,950

Created using the SOA calculator at https://www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using other browser.

katsu

That looks very good Minx - not much I can suggest you alter. Does the £583 leftover feel right or do you think there is anything missing in your SOA?

Lots of the tips I gave you are probably UK centric - are there many voucher codes and Mr T voucher places that you could use to get your entertainment budget down a bit?

Are you making any short drives that you could walk instead to reduce petrol spend? Do you always fill up at the cheapest place and follow Martin's tips in his motoring article like tyre pressure, empty car etc?

Hope this is some help - definitely review all your insurances and use the cashback sites.