Ultrarunner's aim to be mortgage-free

ultrarunner

Hi all, thought I would throw my hat into the ring... found reading these stories very motivating, and thought my own thread would help me focus on my own overpayments.

I've got 71k remaining out of £85,500 Nationwide mortgage on my studio flat, bought for £97,500, unfortunately I bought at the top of the market in 2007, so probably lost a bit of value. In the next few years I would like to sell the flat and buy a bigger place, so my main aim is to get the outstanding balance as low as possible to maximise equity.

Currently I'm in a 5 year fix at 5.34%, which expires in September 2012, so 1 year to go roughly. I've been making overpayments on and off for a few years, usually about £2000 per year in total, but varying each month dependent on overtime paid! I've just got a promotion at work so no more overtime but extra money which I hope will lead to more regular overpayments!

What else... I've 12k in an ISA / Easy Access Account and I'm due a legacy of £25,000 shortly. I'm proposing to hold this in cash ahead of a possible move in 2013 and not commit this to overpaying the mortgage however. I also invest £100 per month into an Investment Trust and 7% of my salary into my work pension, these are geared towards retirement however so are also ring-fenced from the mortgage.

The only other debt I have is also got about a grand on a 0% credit card which I've been using a lot lately as it's been an expensive summer with lots of weddings to go to! This will be cleared before the rate ends in November though.

I've spent a few months analysing my bills and trying to reduce them were possible so I don't think I can trim any more money off these... but I'm keen for any tips to get more money available to overpay. I can overpay £500 / month without penalties and would like to get as close to this as possible, but it may not prove possible every month. £500 every month from now would repay the mortgage by September 2018.

My medium term aim is to reduce the balance owing close to 50k by the end of 2013.

Looking forward to any suggestions and feedback as I begin the long road to being mortgage-free, thanks in advance for any tips

newgirly

Hello, sound like you have made a good start already. It may be worth doing a statement of account and posting it on here as the other mfw's have a keen eye for spotting extra savings which may be made , good luck and welcome !

originalmiscellany

Well, the key thing is 12 months time when your interest rates will drop hugely, assuming that interest rates don't suddenly rear up...
At that point you'll suddenly have a decent amount of extra money to play with every month. Pleasingly it looks like you're doing a great job of overpaying already, which is great.

Your target of 50k for the end of 2013 could be do-able especially if interest rates just slow down.

Well done so far!

originalmiscellany

Ps being an ultra runner, how far do you run? A friend has just run the LA to NY race in America which is just stupidly extreme ultra running

Hurdler

A good start will be an SOA but it really sounds like you have made great preparations to get started.
Will read with interest.

ultrarunner

Hi all, many thanks for the welcome :-)

A statement of account is certainly something on the list to do - I think if I wrote out what I spend I could definitely identify some waste. I'm kicking myself for agreeing to a 5 year fixed rate back in 2007, but my income was much lower then so it was better safe than sorry... anyway come September 2012 I will certainly be able to make the full overpayment, as the variable rate will likely be a lot lower.

Original Miscellany - are the other runner's initials JA? If so, I've met him at a few races, a very determined chap. Not doing ultras currently - I've had a lot of injuries so keeping to shorter distances.

ultrarunner

Ok, so it's been a bit of a whirlwind first week as a MFW. I received the legacy on Friday and have moved it to various savings accounts - as well as overpaying by £500 by September. That's a good start... with luck I can keep overpaying the £500 each month now I've got the payrise.

Yesterday I had double glazing fitted in my lounge, it's a huge window, and had been freezing over the last 4 winters. It needed doing as the old wooden frames were rotten, and it was the only flat with a single-glazed window in the block. Got a good deal from the dad of someone I used to work with. Almost had a nightmare putting the curtains back up but managed some emergency surgery with some filla and a rawl plug.

I've done a monthly budget based on my earnings from the new job. It helps it raining cats and dogs which puts me off washing the car!

Income - £1982

Monthly Outgoings

Mortgage £517
Council Tax £75
Electricity £21
Water £15
Internet £18
Phone £10
Mobile £20
Food £250
Petrol £200
Pension £145
Service Charge £45
Socialising £100

I also have annual outgoings like car insurance, car servicing, breakdown cover and contents insurance which tend to dominate my spending in the month they fall in. Service and MOT are due in early November. My internet and Mobile phone are half price for the next few months but I've included the full month rate.

Because of the one-off bills I don't have a standing order to overpay my mortgage but instead make online payments, as early in the month as I can once I'm sure on what other bills I need to pay - it seems to work for me :-)

Hurdler

I have just had to buy my company waggon after leaving my old job, and one of my mates told me to work out monthly amounts for the insurance, Tax and standard services combined, divvy by 12 and hey presto - put it away so it's not such a clobbering. Is that something that you could benefit from?

newgirly

Hello again, it looks a fairly trim budget but how many of you does £250 a month feed? As if its 1 or 2 there are some threads you could look at to get that down lots.

ultrarunner

newgirly - that's food just for me I've been guilty of going out to get lunch from a shop quite a lot, which is at least £5 a time, I've also had a few takeaways when I work late. The £250 figure was an estimate, but probably not far off... I know all the obvious stuff about batch cooking and not buying what you don't need - I guess I need a bit more discipline!

hurdler - that's a really good idea, never even considered it. Will decide best way to implement it. Thank you...

I've decided to make a note of what and when I spend my money on for the rest of the month with the hope of cutting costs. Today was a ano spending day Although tomorrow I need to get my suit drycleaned ahead of a wedding I'm an usher at next week, and I want to look smart.

Had a call from a financial adviser tied to my bank today, he suggested to come in for a chat given the money I've just come in to, lots of great deals like a 1 year bond paying 3.2%, I could shift money out of the ISA and put it in there... Thanks but no thanks! Also signed up for the West Bromwich Easy Access online account as I am due to receive some more in a month or so apparently.

newgirly

You should be able to make big savings with the food budget if you decide to try and reduce it, we spend around that on five of us. How about a small slow cooker, not just for economical reasons, but its great coming home to a hot curry or chilli all ready and waiting if you get in late.