Reduce mortgage to £100K (Oct 2013)

DIYheadache

Hello MFWers

I’m a long time follower of these boards and thought it was about time I contributed. The DIYheadache family consists of me (32), OH (32), DD1 (3) and DD2 (7mths) we live in a nice 2-bed flat that we bought in 2005 with a mortgage of £132,500. We had a 3yr fixed rate deal with NR and remortgaged to Nationwide in 2008 on a 5yr fixed at 6.18% (not the best deal but I wanted the flexible element and the security of a fixed). The mortgage is currently £109,500, monthly payment is approx £750.

I was quite thoughtless with money in my early twenties and built up a couple of credit cards, which I managed to clear before we bought the flat. Before we remortgaged we paid off a lump sum of approx £9000 to bring the mortgage down to £118,000.

All was going well, and then my OH was made redundant just before we were expecting DD2. She was not able to get maternity pay from her employer but managed to get maternity allowance, which has now just stopped. I have got the cheapest/best deals I can get for insurance and bills etc. My biggest overspend is what some of you refer to as fritter money, which averages around £120/mth. I’m trying my best to remember to make my lunch the night before and not buying coffee etc – I’ve set myself a target to reduce this to £60 this month and then £40 the following month.

Why am I overpaying? – To provide a safety-net after the fixed rate ends and interest rates inevitably go up. My target is £100k by the end of the fixed rate (Oct 2013).

Thanks for listening!

DIYheadache

DIYheadache

Hello

Just checked spreadsheet:

Current Balance: £108,737

2011 Overpayment target : £1500
Overpayments to date: £822.64

Total overpayments to date: £12481.6
Available Cash £9000 (Emergency fund, will not be using this!)

Usuallly overpay by about £115 but will have to reduce that next month due to car insurance, £720!!

linz

Hi DIY

Best of luck, I'll follow you're progress and see how you are getting on.

With regard to not buying lunch/coffee's why not take your own tea/coffee into work if you have facilities? If not, what about taking a flask of tea or coffee with you ?

Good luck anyway

DIYheadache

Paid in the jar of loss change today, an extra £25 for the pot. Managed to stick to my weekly cash target so far, so got to remember to do my lunch and avoid the latte's!

gallygirl

Well done on what you've done so far :T. To help you resist those lattes have a play on HERE - that should help you!

getmore4less

putting the numbers into a calculator

£108737
6.18%
£750pm

Oct 2013 £103,465.36 left to pay

to hit the £100k target monthly payment need to be around £875.

So you need to look for £125pm


Remember when you end the fix your rate will be Base+2% a good chance the payments will go down.

DIYheadache

Thanks getmore4less,

Good to see that my calculations are right. Some months I pay more, some less, depends on what expenses i've had that month. I'm hoping interest rates don't go up by much,as you say, my payments should be less.

One other thing I need to plan for is the extension of my lease, which currently stands at 70 years. I will probably need to do this within the next 5 years or it may become really expensive to do. By my calculations it will cost me about £8000 for 125 years at current value! Of course this is only really an issue if we decide to move.