5 years on and I am nearly there!

themull1

Congratulations, i've got a question though. Obviously you've got a much bigger salary than a lot of people on here so can afford the overpayments, but why didn't you just save up and buy a house in cash and saved even more in charges etc?

adwat

Congrats alex, hope mrs alex enjoys that meal!

alex_p

themull1 wrote: »

Congratulations, i've got a question though. Obviously you've got a much bigger salary than a lot of people on here so can afford the overpayments, but why didn't you just save up and buy a house in cash and saved even more in charges etc?

That is a good question! The answer is growth! Back in 2006 I was on a lower salary than I am today. So I took that salary multiplied it by 5 (or 6!) and that was more or less my mortgage budget at the time. I had already saved a deposit during 2 years prior to that point. I generally think it is impossible to save up and buy a house these days unless you are on a huge salary (which I am not) because as house prices increase the oppportunity to buy runs away from you!

alex_p

RosieTiger wrote: »

Congratulations, I think I understand your point about the journey being better than the arrival. Been thinking much the same thing, as in it's not going to change our lives as we are not going to suddenly spend like there's no tomorrow.
However, as you say, you can enjoy a couple of months of spending more and know that your not having to panic about it. Well done on completing the journey and thanks for a very useful pearl of wisdom.

Absolutely! The arrival is good but that feeling kinda fades withing a few days and you will start to find new challenges! :eek:

alex_p

GettingItRight wrote: »

A very big, big, big, big well done to you alex_p. I read your thread having done a search on "premium bonds" in the forums

Your thread reminded myself of my early years up until about 21 years of age, except that I did not take out a mortgage. From 22, I gradually killed off all of my investments and savings which I had made up until then.

Account spreadsheets are a really great way of giving the user an overview of everything financial. From spending to saving, it can help greatly to assist in financial budgeting. I have been using these for the past few months and now I'm glad to say that I am back to my old ways.

Spreadsheet = control over finances! :j

alex_p

adwat wrote: »

Congrats alex, hope mrs alex enjoys that meal!

haha - yes and drinks too! :beer:

PS you are getting close now! Early congrats!

peaceandfreedom

alex_p wrote: »

I generally think it is impossible to save up and buy a house these days unless you are on a huge salary (which I am not) because as house prices increase the oppportunity to buy runs away from you!

I think you are right about saving up for a house and I congratulate you on your amazing achievement.

It seems likely though that your idea of 'huge' is a bit different to mine. Clearing £170,000 in 57 months means clearing around £3K a month on average without even adding on the calculations for interest. It would take a fairly big salary to even get paid £3K net, never mind be able to throw that amount at the mortgage.

Having said, I do so so so wish I had your sense at your age - actually I wish I had your sense at my age.

Well done - with your income it must have been tempting to live the high life, but you've done the sensible thing - how clever. :beer:

foundationsmcr

peaceandfreedom wrote: »

I think you are right about saving up for a house and I congratulate you on your amazing achievement.

It seems likely though that your idea of 'huge' is a bit different to mine. Clearing £170,000 in 57 months means clearing around £3K a month on average without even adding on the calculations for interest. It would take a fairly big salary to even get paid £3K net, never mind be able to throw that amount at the mortgage.

Having said, I do so so so wish I had your sense at your age - actually I wish I had your sense at my age.

Well done - with your income it must have been tempting to live the high life, but you've done the sensible thing - how clever. :beer:

alex_p wrote: »

That is a good question! The answer is growth! Back in 2006 I was on a lower salary than I am today. So I took that salary multiplied it by 5 (or 6!) and that was more or less my mortgage budget at the time. I had already saved a deposit during 2 years prior to that point. I generally think it is impossible to save up and buy a house these days unless you are on a huge salary (which I am not) because as house prices increase the oppportunity to buy runs away from you!

I've been reading this forum for awhile and this thread really jumped out at me due to the timescales involved.

I've been trying to work out the maths on this, but to my mind, as p&f says, even living frugally, you'd need a net disposable income of around £3K per month to pay off £175K in 60 months on an interest free loan. That's £55K Gross.

If you don't mind me asking, can you provide some details on how on earth have you managed this on an interest bearing mortgage? My partner and I earn over a combined £70K gross and live what we would consider a modest lifestyle, we have a similar sized mortgage, SVR tracking at around the same rate, yet we can't comprehend being able to set aside the £2500 overpayments per month to repay within 6 years or so!?

goobergirl

Well done you have really set yourself up well for the future.:T

I am no use with spreadsheets etc can anyone share a template with me so I can start really knowing my budgeting / spending?

I am really inspired to start a radical MF quest after reading this thread.:)

alex_p

foundationsmcr wrote: »

I've been reading this forum for awhile and this thread really jumped out at me due to the timescales involved.

I've been trying to work out the maths on this, but to my mind, as p&f says, even living frugally, you'd need a net disposable income of around £3K per month to pay off £175K in 60 months on an interest free loan. That's £55K Gross.

If you don't mind me asking, can you provide some details on how on earth have you managed this on an interest bearing mortgage? My partner and I earn over a combined £70K gross and live what we would consider a modest lifestyle, we have a similar sized mortgage, SVR tracking at around the same rate, yet we can't comprehend being able to set aside the £2500 overpayments per month to repay within 6 years or so!?

Thanks for your message. Your estimates look good and I must admit I didn't really consider it from that angle before. To be honest my salary has fluctuated a lot in the time I had my mortgage especially in the financial crisis time. So you are looking at the average view. The key principle I used was to analyse income versus expenditure and be clear about my budgets. Then by sticking to my budget, money would naturally accumulate and when it did I would overpay!