My Improbable 10 Year Target

Phelpsie001

I have a 10 year mortgage dream people!! Let me give you some key facts:

Mortgage debt - £123,256.56
Monthly repayments - £761.72
Interest Rate - 6.59% fixed until August 2014

Income - £25,600 p/a
Overtime - £4920 p/a (at the moment)

Other debt - £6,000 family loan, paid back at £100 a month.


I'm not sure if this is possible but ... I want to pay this mortgage off in 10 years. Now I want to built up £5,000 in savings first (already at £3,200). I am currently managing to save between £200 - £500 a month depending on my outgoings.

I live pretty modestly and am making small overpayments each month. I overpaid £4,000 last year and would love to overpay by £2,000 this year!!

My aim is to drop below the 120,000 mark by end of year!! My capital repayments on my mortgage are only £80 a month though...the rest is interest!!

Anyway, if anyone can help/advise me on my journey that would be great!! I'll keep updating this post for the rest of the year and beyond anyways

kingster2069

Hi and welcome to the MFW forum. I think your aim is very doable.
I've done some quick calculations and I think in 5 months you should have your £5K savings. Then overpaying by an average of £350 for the next three years should bring you nearly £100K when you remortgage.
I think mortgage rates are going to move north during that time, however with a better LTV I think you should still be able to get a better rate.
£100K over 7 years will need a capital repayment of approx £1000 per month.
The key I think it to minimise your expenditure and maximise your income.
Why don't you do a Statement of Affairs (http://www.makesenseofcards.co.uk/soacalc.html) and then the tips and hints will come pouring in!
Also thinks I do to help are using cashback sites to get money back on things your going to buy anyway, there are several I use topcashback. I also using the money I would pay the council tax in Feb and March to overpay as I pay my council tax over 10 months.
Also I increase my mortgage payments if I get any pay rises.
I think if you keep focussed you can achieve your target. Maybe also ready some diaries to get some idea. Earth Girl has just cleared her mortgage and should give you some inspiration.
Good luck.:)

Phelpsie001

Afternoon Kingster ... That has really inspired me, thanks!

I'll post an SOA now....

Phelpsie001

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1550
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 300
Total monthly income.................... 1850
Monthly Expense Details
Mortgage................................ 761.7
Secured/HP loan repayments.............. 83.22000000000003
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 85
Electricity............................. 30
Gas..................................... 30
Oil..................................... 0
Water rates............................. 35
Telephone (land line)................... 0
Mobile phone............................ 28
TV Licence.............................. 13
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 65
Clothing................................ 20
Petrol/diesel........................... 100
Road tax................................ 10
Car Insurance........................... 50
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 60
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 24
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 10
Haircuts................................ 7.5
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 200
Total monthly expenses.................. 1642.42

Assets
Cash.................................... 3200
House value (Gross)..................... 155000
Shares and bonds........................ 3000
Car(s).................................. 2000
Other assets............................ 0
Total Assets............................ 163200

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 123000...(761.7)....6.59
Hire Purchase (HP) debt ...... 1000.....(83.22)....0
Total secured & HP debts...... 124000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Uncle Loan.....................3800......100.......0
Total unsecured debts..........3800......100.......-

Monthly Budget Summary
Total monthly income.................... 1,850
Expenses (including HP & secured debts). 1,642.42
Available for debt repayments........... 207.58
Monthly UNsecured debt repayments....... 100
Amount left after debt repayments....... 107.58
Personal Balance Sheet Summary
Total assets (things you own)........... 163,200
Total HP & Secured debt................. -124,000
Total Unsecured debt.................... -3,800
Net Assets.............................. 35,400
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using IE browser.

hcb42

I dont understand why the capital payments are only £80 per month...are you on an exceptionally long mortgage term?

Phelpsie001

35 years ... My interest seems to be a huge amount each month to be honest ....

hcb42

no wonder you want to bring it down to ten years...!

I owe more, which was taken over 20 years, now 15, and as a broad rule of thumb about 50/50 interest/capital

Phelpsie001

If mine was 50/50 I'd be a happy chappie!!

Whilst I am able to get this overtime I want to build my savings up and pay as much of my mortgage off as possible. If I can break the £120,000 barrier this year, I will be so happy with myself!! I really can't see how I can achieve all my goals this year though? Save another £2,000 and pay £2000-£3000 off my mortgage?

Combined thats approx £5,000 over the remaining 7 months = £715 a month I need to find. Now I can probably do £600 at a push which means hitting my savings target and paying off £2000? Save approx £300 a month and pay off approx £300....

Phelpsie001

Just paid off another 320

kingster2069

Phelpsie001 wrote: »

Just paid off another 320

Congratulations :T You did read the warning about this becoming addictive? :D

Phelpsie001

I didn't read that but it so is... I see an odd spare few pounds... And I immediately want to use it to pay off my mortgage =P All for the greater good though!! But it is too addictive!!