Sweetdaisy's aim to be mortgage-free

edited 8 November 2011 at 9:21AM in Mortgage-free wannabe
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sweetdaisysweetdaisy Forumite
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edited 8 November 2011 at 9:21AM in Mortgage-free wannabe
Hi everyone :wave:

I have been reading the 'Mortgage-free wannabe' threads for quite a while and want to start my MFW journey. I want to keep a diary so that it keeps me motivated to work towards my aim of being Mortgage Free.

I am married and we have two young Sons. We originally took out a 25 year mortgage for £61,500 in February 2001, however we had an extension to our house 3 years ago and our mortgage balance is just over £84,000 and we have 14 years and 3 months remaining on the term.

Ideally, I would like to repay the mortgage at least 4 years early - in 10 years time, so I will be 42 years old.

We have a Natwest Offset Mortgage with an interest rate of 3.75%. The repayments are capital and interest repayments and I am offsetting one current account and 3 savings accounts against the mortgage, so I don't get any interest paid on these accounts. At the moment, as we have only been paying the minimum mortgage repayments we are set to repay our mortgage 1 month early.

I have just increased my monthly mortgage payments by £59 a month - to make a start on overpaying :). I know it's not much, but as I am on Maternity Leave (until April 2012), this is all I can do at the moment.

Even though we aim to reduce the term of the mortgage by a few years, I am not going to be too frugal as we have two young Sons and want to enjoy life :).

Look forward to being active on here and hopefully this will motivate me to save/overpay more so that we can reduce the term of our mortgage :).
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  • HurdlerHurdler Forumite
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    welcome to the addictiveness and well done on setting up the regular overpayment!!!

    Every little helps!
    • Mortgage @ March 2008: £194,965 ; Lightbulb Moment: July 2011: £164,926; End Date: March 2033
    • MORTGAGE FREE: September 2015
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  • JimmyTheWigJimmyTheWig Forumite
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    sweetdaisy wrote: »
    I have just increased my monthly mortgage payments by £57 a month - to make a start on overpaying :). I know it's not much, but as I am on Maternity Leave, this is all I can do at the moment.
    I'd say that was quite a lot, actually. From my back-of-an-envelope calculations, I'd say that had increased your capital repayment each month by around 25%.

    Out of interest, was is a whopping great extension you had done? Or have you not always been on a repayment mortgage? Just your balance seems pretty high compared to where you started 10 years ago.
  • sweetdaisysweetdaisy Forumite
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    I'd say that was quite a lot, actually. From my back-of-an-envelope calculations, I'd say that had increased your capital repayment each month by around 25%.

    Out of interest, was is a whopping great extension you had done? Or have you not always been on a repayment mortgage? Just your balance seems pretty high compared to where you started 10 years ago.

    Yes, we did have a large extension (an en-suite bedroom upstairs and another sitting room/playroom downstairs). We have always had a Repayment Mortgage and came off Fixed Rate and changed to an Offset Mortgage in 2005.

    I forgot to add that we did remortgage in 2005 when we took out the Offset Mortgage as we purhcased two cars, so we repaid a loan we had and added it to the mortgage. This is why our mortgage balance is a lot higer than when we originally started out.
  • sweetdaisysweetdaisy Forumite
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    I contacted Natwest Offset Mortgage team today and I now understand why my statement only says that I have reduced the term by 1 month :).

    Based on the interest which is being Offset through Overpayments the mortgage term has been reduced by 1 month. (I have now increased Overpayment by £59 a month from 16th November).

    However . . . including total money being Offset in Current and Savings Accounts, I have reduced the term of the mortgage by 29 months :dance:. So I am over half way to reach my target of paying off the mortgage 4 years earlier.

    This has really spurred me on now to keep the overpayment at £59 a month (as I can affford to do this at present) and to increase my savings as I now aim to have 6 months salary in my savings account and obviolusy the more I save and Offset the quicker the term of the mortagage will reduce :).
  • originalmiscellanyoriginalmiscellany Forumite
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    that's why overpaying is great!
    If someone told you that overpaying "just" £59 a month would speed up your clearance date by 29 months (i think that's the right no) you'd struggle to believe them wouldn't you.
    So as you say, there's the motivation to continue on your journey :)
    Feb 2012 - onwards MF achieved
    September 2016 - Back into clearing a mortgage - Was due to be paid off in 32 years in March 2047 -
    April 2018 down to 28.00 months vs 30.04 months at normal payment.
    Predicted mortgage clearing 03/2047 - now looking at 02/2045

    Aims: 1) To pay off mortgage within 20 years - 2037
  • sweetdaisysweetdaisy Forumite
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    that's why overpaying is great!
    If someone told you that overpaying "just" £59 a month would speed up your clearance date by 29 months (i think that's the right no) you'd struggle to believe them wouldn't you.
    So as you say, there's the motivation to continue on your journey :)

    Thanks originalmiscellany

    I have only increased overpayments by £59 with effect from 16th November. Up until then, my overpayments have only been £2 a month! (I didn't realise I was overpaying, I thought I was paying the minimum monthly mortgage amount). But with what I have in savings and my current account to offset - it is this which has reduced the term of the mortgage by 29 months.

    Now that I will be overpaying by £59 a month, along with ploughing more money into my offset savings accounts, my term should drastically reduce :).
  • sweetdaisysweetdaisy Forumite
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    Thought that I would post my SOA.

    These are monthly outgoings:
    Mortgage: £700
    Council Tax: £135
    Life Insurance: £17.86
    Mortgage Insurance: £18.94
    Investment ISA (long-term savings for children): £100.00
    Gas and Electricity: £62.00
    Mobile Phone: £16.00
    Internet: £17.00
    Breakdown Cover: £19.30
    Son's School Dinners: £38.00
    Food Shopping: £370.00
    Petrol (for both cars): £220.00
    Spending Money: £260

    We also have other expenditures that we do not pay on a monthly basis i.e.

    2 x Car Insurance: around £700 a year
    2 x Road Tax: around £200 a year
    2 x MOT's, Car Services, Tyres: amount varies
    TV licence: £145 a year
    BT (phone): around £65 a Quarter
    Water: £400 a year (I am considering paying this monthly to spread the cost)


    We are a family of 4 and I budget £85 a week for the food shop which I manage to do and am getting better at this, but it can be difficult. I do my shop online with Tesco as even though I pay £3.00 delivery, when I go instore and do a shop I often overspend by about £20, so doing the shop online means I can budget better and be less wasteful :). I allow for £60 a week 'spending money' and this includes activities for the children, top-up shopping, bits and bobs etc.

    After all outgoings we have around £600 left over, however from April 2012 when I return to work full-time after being on Maternity Leave we will be paying childcare costs again, so we will only have around £300 left a month :(.

    I'm also a member of quite a few survey and review sites, so I use any earnings/vouchers from these to treat my family and use them towards buying Birthday and Christmas presents.

    I would welcome any advice as to where I can cut costs :).
  • Hmm, I'd definately look at the Broadband/Phone part of your SOA. My total Broadband/Phone package costs less than just your broadband.
    Mini Challenge - Halve 2nd Mortgage by Year End
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  • sweetdaisysweetdaisy Forumite
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    Hmm, I'd definately look at the Broadband/Phone part of your SOA. My total Broadband/Phone package costs less than just your broadband.

    Thanks. We have never changed broadband provider and have always been with Tiscali until they changed over to Talk Talk and foolishly :mad: we signed over to Talk Talk and it's the biggest mistake we made. We are tied into a contract with them for the internet only unil February 2012 and they said that if we change provider before then, they will charge us £170!!

    There are so many broadband/phone packages out there that I don't know where to begin? Was thinking about changing to Sky internet and phone but not sure. We have Freesat TV from Sky and am happy with this as there is no monthly fee to pay for TV (besides Freesat has all the channels we need).
  • sweetdaisysweetdaisy Forumite
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    I have contacted the Water Company and have set up a direct debit to pay monthly, instead of every 6 months so that I can spread the cost throughout the year.

    Had my Npower dual fuel bill today and based on usage my monthly payments are increasing from £62 to £95 a month! Suppose it is expected as it always goes up Winter time :(.

    Done a lot of Christmas shopping today and around 3/4 of the shopping has been done and well within budget :).
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