Mipmop's Mortgage Quest

Mipmop

Hello all,

Well after a long period of absence I'm back! A lot has happened since I've been on the board - my oh got made redundant but we were to effectively pay off the remainder of our mortgage with his settlement. So rather than settle for the easier way of life we've decided to move house! That means a new mortgage but it also means once we've paid this one off we are done!

So the current stats are we've bought a house valued at 365k with a mortgage of 160k. Ideally I would like to aim to pay this off in 6 years (I'd be 37 and would like to go part time after). The one slight issue being there's only one salary coming in so until my oh finds new work our overpayments will be smaller - but it all adds up!

To kick off I've been doing to usual MSE things - reducing shopping bills, using cash back sites (saved over £100 on car insurance & house insurance!) and I'm trying to overpay little and often so it becomes routine.

Luckily for us we have an offset mortgage at 3.29% so we are offsetting approximately 25k of the mortgage balance which helps reduce the interest we are paying.

Hopefully i will be on here a bit more often this time around!

Lois_E

Hi Mipmop and welcome back. :wave:
Sorry to hear about your OH getting made redundant but well done on making good use of the payout. Is OH back in a new job now, then?
Good luck with the new journey with the forever house mortgage.

Mipmop

Thanks Lois_e

As it happens oh has been offered work :j:j:j
It's only temporary to start with but it is a start! So he will back to what he was earning before.

As we have an offset mortgage it's very tempting to just save everything and not bother overpaying but we've decided that it's nice still to be knocking capital off - and it will encourage us to keep at it.

So I am doing general payments to keep to round figures at the moment. Once (if) oh is made permanent we will look to pay off approx 1k per month like we used to but that's a few months away yet.

We are very very lucky in that even without him working we still have an income of just over 3k per month from my salary and we are saving just over 1k of that currently. While you could argue any salary oh will bring home is spare we do want to replace our car so that will fund that too.

We are yet to move into our new house - boring solicitor bits at the mo when I just want to get moving! Majority of oh payout will go to the new house. We are left with about 30k which will be offset against the capital.

Our current interest is £14.49 a day :eek: and I would like to try really hard and get this below £10 by the end of the year (if oh is made permanent). Our current mortgage balance is £159,680 so will be aiming for below 150k, with the offset of 30k by the end of 2013 - this then catches us back up to pretty much where we were mortgage wise when we decided to go for the step up (121k outstanding). Long term it would be great to clear it in 7 years which we worked out we can do if we keep the same income we used to have (5k per month in hand) - then it will be 6 years of retirement saving and then we will relax big time!

Made rest of the birthday cards required before June last night. Food shopping tomorrow after 2 weeks without any - trying to run freezer stocks down before the move! Have set aside £40 for next 10 day shop so anything I spend under that will go to the mortgage.

Mipmop

Mipmop

A quick entry today to say out of my £40 food shop budget I spent £31.05 due to reduced food bargains and have therefore skipped home and made an £8.95 overpayment to the mortgage.

I think I'm going to do this every time I do the shopping - I will set a budget and anything I underspend will go to the mortgage.

Mipmop

Well we've now moved into our new house and are getting unpacked, it also means I now know exact figures and what we need to pay off.

So our current mortgage now stands at £161,499.83. Our offset savings stand at £30,838.97 which means there's another £130,660.86 to go!

We are on a Woolwich offset mortgage at 3.29%, for some reason they have opened a 2nd mortgage account of £1500 in our names - I think they are trying to charge us a redemption fee on our mortgage although we actually moved it from one property to the other and were assured we wouldn't pay it; just waiting for them to get back to me.

We do a few other savings bits and pieces but I've decided to only focus on proper savings accounts and ISAs; that way if we buy something for the house it can come out of the other accounts and not decrease the offset.

Our current aim is to try and increase our savings by £1500 per month. This is on top of the monthly £830 mortgage payment, of which about £400 is capital. Therefore my aim for 31 Dec this year is a mortgage amount of £115,460.86 (mortgage less offset). Then by the end of next year I want to be in a 5 figure mortgage.

This all depends on lots of things; if any maintenance is needed to the house (luckily we don't 'need' to do anything although we will paint etc over the next year, but there's no big jobs currently), OH being extended on his work contract etc.

One positive is this house will last for a long time - lots of space, peaceful village with plenty of parking so once this is paid off we will be washing our hands with mortgages!

So here goes! :T

Mipmop

Ahh - still waiting for BT to connect my broadband - sooo frustrating, especially for online banking etc. Anyway i've managed to borrow a connection this morning.

The Woolwich came back and as it turns out the £1500 wasn't supposed to be there so that account has now disappeared. Our mortgage payment for this month has just gone out so our new figures are;

Mortgage £159,050.00 (I rounded it down with a small overpayment so it was nice and even)
Savings of £31,266.61

Mortgage after offset = £127,783.39

So to meet my target of 115k by the end of the year we need to save another £12,783.39. I think approximately £2,574 will be paid off just due to the regular mortgage payment so we personally need to save £10,209.39 between us (£1700 per month!). Our offset mortgage is a repayment offset - so we are reducing capital both with the regular payment and our savings.

We've started to sell some bits and bobs on ebay and will use this money to buy new furniture for our house.
I also have a sealed pot which I don't take into account from a savings point of view which should hold £1000 when it's full - i'm about half way there. When it's full I'm going to save half and spend half so hopefully there might be a treat by the end of the year!

Moving into a house that needs no immediate work has been a real blessing as we've been able to crack straight on with mortgage payments rather have to build a buffer first to undertake work.

My intention is to be mortgage free in 5 years (May 18) which will be tight as there will naturally be things that need fixing/upgrading in that time (cars for one!) but better to aim high and push hard.

Onwards and downwards!

Have a good weekend all - we are camping so praying for sun!

Mipmop

Mipmop

Payday! June money shuffling has been done.

New figures are;

Mortgage £159,050 (payment not taken until mid month)
Savings £33,561.29

Mortgage less offset savings = £125,488.71

The mortgage payment comes from a different savings account that I don't include in my offset total so I am aiming to break the 125k barrier by the end of June.

Mipmop

Well - how things change! I am usually a payday poster so a couple of days to go on that front. However we have had another change in circumstances. OH is now out of work for the 2nd time in 12 months which has made me re-assess our mortgage free abilities. We will be about 2k worse off per month which means the 5yrs I was hoping for will now be pushed out to 9yrs (so June 2022 is my new target).

Rather than be downbeat I've played with the spreadsheets and agreed a way ahead with my OH that will see us concentrating on overpaying as well as offsetting so we achieve a good balance.:money: As we now have 32k in offset savings we have a big enough buffer for most eventualities I can see. So step one will be to make an ovepayment in July to take the savings down to about 30k where i'd like them to stay for the rest of the year.

I have also just bought a new car to replace mine. :eek:While it was partly something I wanted rather than needed I got a good deal and have no tax or insurance for this year and no servicing or MOT costs for the next 3 years. It will be a bit more economical than mine and also (hopefully) not have all the squeaks and rattles mine has been collecting that made me think it was time to change! I pick it up next week. As it's a more practical car for families it also means if OH doesn't find work this year we can look to sell his car to provide a bit of extra money in his pocket.

Above all else we are still in a very good postion financially but we need to be moe thoughtful over the next couple of years and make sure we shop around and save where we can.

I'm back to a £30 a week grocery budget (only meat is not included as I get them from a butcher once a month and freeze). That should free up another £20 ish for overpaying - but I have started getting Christmas presents here and there so the spend in December isn't so great.

I'll be back in a couple of days with our shiny new figures. I'd like to break the 150k barrier by the end of the year which I hope is achieveable between our regular payments and overpayments.

Onwards and downwards :T

Mipmop

Mipmop

So it's pay day - yey! Despite June being a short month it seemed to take a long time to come around!

I've just done the banking, as per my last post I have now started to make overpayments alongside offsetting the savings. So today I have overpaid £1,021.70. This is part from salary and part moving some of our offset savings across.

This leaves us with £157,544.30 capital owing.
Our offset savings are now £33,472.04 which is just a smidgen over 20% of the capital.

So our capital less offset is £124,072.26. For my revised target of sub 120k by year end we need to lose another 4k. I'm hoping the £72.26 can be found this month from underspending on some items I've put money aside for! Approx 3k should be covered by the regular mortgage payments which don't leave the bank until the 16th so as long as we can find £170 per month for the rest of the year we will hit the target. I am pretty confident we will get there so I may revise the target after the summer holidays. :T

Happy July everyone!

Mipmop

So pay day is here again and below is my update.

And our circumstances change again as OH has a new job :j:beer: and it's local for a change so no horrible commutes! This gets our mortgage free ambitions back to the fore. He's due to start in September so we have another month of limited overpaying/saving and then full steam ahead!

Following the pay day shuffle our balances are as follows;

Mortgage Balance £156,341.38
Offset savings £34,440.63

Mortgage Less Offset £121,900.75 (22% Offset)

I'm hoping (fingers crossed) to pick up a work bonus next month which will also help out.

Onwards and downwards!

Have a good Summer all.

Mipmop