Starting the mortgage free path

Hurdler

bownyboy wrote: »

Like many people I've been a lurker on these boards for a while now and after reading some other diaries I've decided to take plunge and start on the mortgage free path.

Me and my girlfriend bought our house in May 2009 with a 25 year mortgage of £155,590 on a 5 year Alliance & Leicester fix at 3.99%. Monthly payment of £832.

The house was a bit of a timewarp (one family had lived there for over 50 years) so needed completely new electrics, replastering, painting, carpets ripped up etc.

I'm now in the position to start overpaying the mortgage and in January made the first payment of £499 (maximum allowed each month). I can also make a 10% overpayment of the total outstanding amount each January so I'm saving £250 in an ISA account and will pay off £3k in January 2012 (and each subsequent year).

I'm now on my third overpayment and it feels great My outstanding balance has gone down more these last 3 months that the last 2 years!

The target is to pay off by December 2019.

Only 104 payments to go!

Gawd I know the feeling - my place was owned by an umarried guy who lived with his 90 year old mother!
I still have nightmares when I look at the "before" pictures!

bownyboy

Happy new year all!

Well I just paid off £3,751 today to take advantage of my mortgage which allows 10% overpayments each January. Current balance is now £136,352. After my usual monthly payment and overpayment comes out on the 15th it should mean January should finish on £134,498. Phew.

I can't believe after 1 year of really putting my mind to this I've managed to clear just over £15k off the mortgage balance.

My target for this year is to be at £119k by December 2012. I find before and after stats really help me along especially as each month things can seem to be moving really slowly.

bownyboy

Regular monthly overpayment cleared yesterday so now at £135,848

Spiggle

Hi Bownyboy,

You have now been added to the MFW2012 challenge and you're No.125. Good luck.

All the best,
Spigs

bownyboy

Decided to make a real go of my allotment this year. With all the work required on the house last year I neglected it somewhat - went down there last weekend and it was completely grown over.

Started digging over and will make some raised beds this weekend and have planned out what I'm going to grow in each of the 4 beds (I have a quarter plot for £8 a year which is more than big enough) - hopefully it should contribute to the food budget.

I'll post some pics up when I the beds are complete.

bownyboy

Haven't got round to making the raised beds but got a quote form local timber merchant and after measuring up for wood cost came in at £100. Thats for three beds 3mx1.2m and one 4.8mx1.2m which will cover my quarter plot.

Hopefully should last a good 5 years or so. Not sure what to treat them with though, don't want any nasty chemical preservatives on the wood.

bownyboy

Got a letter yesterday from Alliance & Leicester thanking me for my overpayment in January (I'm allowed to make up to 10% in January) Annoyingly they have recalculated my monthly payments down to £764 from £822 even though I specifically told them at the outset to keep my payments the same (and they have done every month up to now).

Guess I'll be on the phone to their great customer support line tomorrow...

bownyboy

All sorted with A&L, surprisingly quick 30second call sorted out the monthly repayments back to 822.

Monthly overpayment of 499 paid today so new balance £134,999 or thereabouts.

bownyboy

Wow, another month gone by and down to £133,752 usual monthly payment and 499 overpayment.

£1500 out of £6000 saved for 10% overpayment on Jan 1st. Now just under £15 a day interest at £14.98.

bownyboy

Hurdler wrote: »

Gawd I know the feeling - my place was owned by an umarried guy who lived with his 90 year old mother!
I still have nightmares when I look at the "before" pictures!

So over the last 3 years we have done everything in the house apart from the kitchen, boiler and fireplace in sitting room. It's a 1950's kitchen and falling apart. We've tried painting, updating but it really is on its last legs and driving us nuts.

Plan was to save up, but we reckon it's at least £20k all in (also need to knock a wall down and move downstairs toilet out of kitchen).

Sooooo, been thinking about putting it on the mortgage which goes against the whole MSE idea, or carry on saving for another 18 months or so. Or stop overpaying and put everything into kitchen fund and get it saved quicker.

Think I need to look at cost of extending mortgage vs cost of not overpaying vs our sanity!