5 years on and I am nearly there!

alex_p

When I was trying to claw my way onto the property ladder back in 2006 aged only 24, I used this website to learn about mortgages - tracker, fixed, interest only etc. At that time I had no clue about mortgage products. I also came accross this forum back then and read about people trying to become mortgage free! It inspired me and made me realise that a mortgage is actually a debt! I took out a mortgage that allowed me to make capital repayments and have been steadily working hard to pay it off!

I am getting close now (!) and wanted to post here as an update and also to thank you all for the information posted here!

Mortgage when started: £170,000
Current mortgage (date): £20,000
Mortgage free day: Mar 2011

alfiesmum

Absolutely brilliant! Well done! I agree, I wouldn't be doing half as well at getting rid of our mortgage debt, if it were not for this site, the forums, and the lovely people on here!

alex_p

Thanks!

A forum member PM'ed me and said I should probably post a few hints a tips about how I did this.

There are 2 parts to how I was able to do this, one was careful planning (budget etc) and the other... some luck!

I started by working out all my monthly outgoings and seeing how much I could afford to overpay.

The mortgage I chose was a 2 year fix at 4.39% with 10% overpayments per year only which then switched to a tracker base rate + 0.99% with no limit on overpayments. I chose this specifically because at my young age (and low income) I wanted to budget easily and a fixed rate allows you to do that. However I was hoping I would earn more as I get older and could cope with a rate increase in 2 years time - in a way that was a gamble. I used a mortgage broker and explained what I wanted and they found me a fee-free deal but charged £500 for their services.

During the first 2 years I saved up and tried to overpay by 10% which was a bit difficult. After 2 years, the rate jumped up to about 6% (ouch!). However then the financial crisis hit and it fell to 1.49% (the luck bit). I also landed a new job which meant I could make more overpayments (the second luck bit!). I'd keep 1-2K in my bank account for safety. At the end of each month, I'd review my bank balance and anything over £500 on top of my safety net I would overpay. Slowly but surely the balance on my mortgage started to drop, making the monthly payments less and less, this in turn made it easier to make overpayments!

Hope these tips help someone out!

RosieTiger

Well done ! As I have said many times before, I wish I had been blessed with the same amount of sense when I was your age!

alex_p

Thanks! Just need to stay motivated for the last BIG push!

originalmiscellany

You certainly are a shrewd customer, make no mistake. I'm 2 years older than you and am aiming to clear our mortgage in a longer time frame, but we have had a lot of expenses in the past 2 years, which has hindered our progress. But to see how you've whittled away 170k to 20k is a testimony to making steady progression at your mortgage over time, and viewing it as a debt that you want to clear as soon as possible.

For what it's worth, myself and Mrs MrsOM have the same policy where I skim off all money over a set amount at the end of every month - I think it varies but normally £500 is the amount. It's brilliant to see the mortgage/savings shrink on a month by month basis.

Well done again sir

wynnvegas

Hi Alex,

Many congratulations. Being mortgage free before 30 has been my goal over the last couple of years. I've no idea how you've managed to clear that amount in such a short time as you must have been chucking nearly £5k a month at the mortgage. What is the plan when you're mortgage free?

Cheers,

Billy

alex_p

@originalmiscellany

Yes it's definitly very rewarding to see the balance start to shrink down!

@winnvegas

It is my goal to be mortgage free by the time I'm 30 (almost 29 now). Some people will question this goal but I don't feel I have made any major sacrifices, just don't buy what I don't need and make overpayments whenever possible. It seems like I have been chucking alot at it for a long time! When I am finally mortgage free I think I will treat myself and my girlfriend to a really nice dinner out. I have no plans after that, probably save up for a few years before we buy the next place. I would like to avoid taking another mortgage out in future unless it is for a small amount e.g. 50k.

wynnvegas

Hi Alex,

More power to you sir. We had just over half the mortgage amount you have and cleared it by 29 and a half so you're doing a grand job. Much like you, I'm dead against getting another mortgage unless it's as a short-term measure whilst we build the big house. A celebratory dinner is the perfect way to kick off your mortgage free life. I'd also recommend splurging for a few months afterwards on things that you have denied yourselves to date before getting back to the serious business of saving for whatever new car / new house you fancy.

Cheers,

Billy

alex_p

Thanks Billy. Might have to treat myself in the months afterwards!

alex_p

Also reading these forums made me realise that I have got a bit lazy and I haven't done a budget since 2006! I will work one out this weekend!