1-year in to mortgage free - Small steps make progress

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  • 20vt-rs
    20vt-rs Posts: 674 Forumite
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    20vt-rs wrote: »
    Ok, so I thought I'd do a quick new-year update, managed to make a good OP of £110 over Christmas to the mortgage and balance is now at £118,500 on the nose!

    Hi all, thought I'd update this diary, not done this since last June. but as a flashback five years ago, I was at £118,500 outstanding... Fast forward five years, I am now at £77,750 outstanding. Currently overpaying in the region of £435 per month, and I am on track to clear the balance in 6.6 years, or 79 months to be exact.

    I'm currently in a 5-year fixed rate with around 4.5 years to go, can I clear this lot in 4.5 years? I am going to try, with extra OP's along the way!

    I like the ideas seen on here like money jars for £2 coins, and taking change when buying things and putting aside into a pot. (Although these days that's rarer with contactless being everywhere!)...

    Good luck in 2019 everyone :)
    Mortgage Free Wannabe Light Bulb Moment (Early 2012, started May 2012)
    Original Mortgage Amount - £147k (Oct 2005) / Term 27 years (To 2032)
    Target to Pay off by 2026 by overpaying - Officially Mortgage Free June 2023!
    Balance Reduction Progress: May12 £128k / Nov13 £120k / Dec15 £107k / Mar18 £87k / Mar21 £46k / Jun22 £28k / Jun23 £0!!

  • You're making wonderful progress. I also look for any ways I can OP. When my paycheck is deposited, any money left in my account before the deposit hits, goes to the mortgage. We do have a change jar but thats slow to build since we rarely carry cash. Its so exciting to see real results from overpaying. Keep crushing it!
    Mortgage start date Dec 2015 - $64,655.00
    Mortgage end date Dec 2045 - NOT!!!!
    Mortgage balance  - $4600.00
    Business Savings $43,310/100k
    Hope to be mortgage-free by end of 2023 
  • 20vt-rs
    20vt-rs Posts: 674 Forumite
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    LeighofMar wrote: »
    When my paycheck is deposited, any money left in my account before the deposit hits, goes to the mortgage.


    Hiya, I think that's a great idea, I had been moving the remainder into a savings pot, but really I should start doing this also to help us get this done in the next 4.5 years, it all helps!
    :beer:
    Mortgage Free Wannabe Light Bulb Moment (Early 2012, started May 2012)
    Original Mortgage Amount - £147k (Oct 2005) / Term 27 years (To 2032)
    Target to Pay off by 2026 by overpaying - Officially Mortgage Free June 2023!
    Balance Reduction Progress: May12 £128k / Nov13 £120k / Dec15 £107k / Mar18 £87k / Mar21 £46k / Jun22 £28k / Jun23 £0!!

  • 20vt-rs
    20vt-rs Posts: 674 Forumite
    Mortgage-free Glee! Name Dropper First Post First Anniversary
    Hi all - bit of a quandry going on at the moment with my OP's...

    I currently have a 0% balance on a card, that I have been paying off for the last 2-years, it has 6-months left before it is clear. I am getting itchy feet to clear it off and get stuck into my mortgage, and considering paying that completely with savings and then overpaying the mortgage with the extra I pay to this card.

    Balance is approx £1900 on the card, and I have been paying £320 a month to it. If I paid it off today using £1900 from savings, I can then up my OP's to the mortgage by anpther £320 a month. But I'd obviously be loosing out on interest on the £1900, which is in a 123 account getting 1.5%.

    Wanted to find out if there are any othre options, or is it best to sit tight for the next 6-months and pay as I am at zero on the card. My other line of thinking is take £1900 out of the savings, and pay it direct to the mortgage rather than the zero card, but then I'd still be paying both. I think my impatience needs to clear the card!!!
    Mortgage Free Wannabe Light Bulb Moment (Early 2012, started May 2012)
    Original Mortgage Amount - £147k (Oct 2005) / Term 27 years (To 2032)
    Target to Pay off by 2026 by overpaying - Officially Mortgage Free June 2023!
    Balance Reduction Progress: May12 £128k / Nov13 £120k / Dec15 £107k / Mar18 £87k / Mar21 £46k / Jun22 £28k / Jun23 £0!!

  • AnotherJoe
    AnotherJoe Posts: 19,622 Forumite
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    20vt-rs wrote: »
    Hi all - bit of a quandry going on at the moment with my OP's...

    I currently have a 0% balance on a card, that I have been paying off for the last 2-years, it has 6-months left before it is clear. I am getting itchy feet to clear it off and get stuck into my mortgage, and considering paying that completely with savings and then overpaying the mortgage with the extra I pay to this card.

    Balance is approx £1900 on the card, and I have been paying £320 a month to it. If I paid it off today using £1900 from savings, I can then up my OP's to the mortgage by anpther £320 a month. But I'd obviously be loosing out on interest on the £1900, which is in a 123 account getting 1.5%.

    Wanted to find out if there are any othre options, or is it best to sit tight for the next 6-months and pay as I am at zero on the card. My other line of thinking is take £1900 out of the savings, and pay it direct to the mortgage rather than the zero card, but then I'd still be paying both. I think my impatience needs to clear the card!!!


    Financially you are better off paying the £320/month into your 123 and then paying the zero % off at the end of the 6 months with the accumulated amount. You'd get a little bit of extra cash that way. Roughly, back of a fag packet maths, £70. Psychologically, you may be better off just concentrating on getting rid of that debt for the sake of a tenner a month or so.


    Once you've dealt with that debt, dont just plunge into mortgage reduction, look at it vs your pension. If youre like most people here you are obsessively paying off your mortgage and paying minimum into your pension, then over the mortgage lifetime, forget the £70, you could be talking £70k you are losing by doing it that way round.
    In a nutshell, the reason is that the rate you get on pension with tax savings and investment growth compounding far exceeds the mortgage, plus by paying off the mortgage early you are not letting inflation whittle it away and to add insult to injury you are delaying your pension payments so they have been whittled away by inflation because every £1 you pay into your pension in 30 years time is probably worth half if you pay it in now and thats before you consider tax and growth).
    Good luck.
  • 20vt-rs
    20vt-rs Posts: 674 Forumite
    Mortgage-free Glee! Name Dropper First Post First Anniversary
    AnotherJoe wrote: »
    Financially you are better off paying the £320/month into your 123 and then paying the zero % off at the end of the 6 months with the accumulated amount. You'd get a little bit of extra cash that way. Roughly, back of a fag packet maths, £70. Psychologically, you may be better off just concentrating on getting rid of that debt for the sake of a tenner a month or so.


    Once you've dealt with that debt, dont just plunge into mortgage reduction, look at it vs your pension. If youre like most people here you are obsessively paying off your mortgage and paying minimum into your pension, then over the mortgage lifetime, forget the £70, you could be talking £70k you are losing by doing it that way round.
    In a nutshell, the reason is that the rate you get on pension with tax savings and investment growth compounding far exceeds the mortgage, plus by paying off the mortgage early you are not letting inflation whittle it away and to add insult to injury you are delaying your pension payments so they have been whittled away by inflation because every £1 you pay into your pension in 30 years time is probably worth half if you pay it in now and thats before you consider tax and growth).
    Good luck.

    Thanks for the advice, thats good thinking.... I think at the moment I have a fairly balanced approach to savings, mortgage, pension etc: (I hope anyway!)

    At the moment, 17% of my salary goes into into my pension.
    My mortgage has 6.5 years to go @ 1.94%, fixed interest rate for the next 4.5 years - upping the OP's by £320 should clear it in just under 5-years, at which point I can focus on pension and other savings ISA's etc. Or even get a BTL property (lots of thinking!)...

    Thanks for the numbers on using my 123 v's paying off the debt, I guess the psychological side of things is my head saying clear the debts and you'll be free, paying off the mortgage by £1900 in a lump may also save every so slightly more interest that putting the OP's into the 123.

    I think with the balance now tipped under £2k left on the zero card, I should clear it to relieve one side of the debt, and then focus on mortgage for next 4.5 years. Keeping pension as is, I certainly wouldn't drop my pension down to clear the mortgage at this time.
    Mortgage Free Wannabe Light Bulb Moment (Early 2012, started May 2012)
    Original Mortgage Amount - £147k (Oct 2005) / Term 27 years (To 2032)
    Target to Pay off by 2026 by overpaying - Officially Mortgage Free June 2023!
    Balance Reduction Progress: May12 £128k / Nov13 £120k / Dec15 £107k / Mar18 £87k / Mar21 £46k / Jun22 £28k / Jun23 £0!!

  • 20vt-rs
    20vt-rs Posts: 674 Forumite
    Mortgage-free Glee! Name Dropper First Post First Anniversary
    Just to update my diary - I cleared the zero card balance of £1900, and have upped my regular OP to the mortgage by another £200 a month (My overpayment is now greater than the standard fixed rate payment!)...

    The £320 I was paying off the card with I have rounded to £300 and split into thirds. Two thirds to the mortgage, and a third to savings. Once I have maxed out my high(ish) interest savings accounts from doing this, I will be upping my pension by the third until the mortgage is paid.

    Mortgage currently sits at £76k approx, with the overpayments now in place, I am tracking 65months to clear, just over 5-years. My target was to clear it before I hit 50 in 2026, hopefully should just about do it!
    Mortgage Free Wannabe Light Bulb Moment (Early 2012, started May 2012)
    Original Mortgage Amount - £147k (Oct 2005) / Term 27 years (To 2032)
    Target to Pay off by 2026 by overpaying - Officially Mortgage Free June 2023!
    Balance Reduction Progress: May12 £128k / Nov13 £120k / Dec15 £107k / Mar18 £87k / Mar21 £46k / Jun22 £28k / Jun23 £0!!

  • jodles16
    jodles16 Posts: 1,477 Forumite
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    Wow you are smashing it!! Well done you!


    Jodles :D
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  • 20vt-rs
    20vt-rs Posts: 674 Forumite
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    edited 23 March 2021 at 4:43PM
    Well it's been around 2-years since I last updated my MF diary, who would have known two years ago we'd be in this situation now with Covid etc... :neutral:  Anyway, I have been lucky enough to be able to continue working throughout all the lock-downs, and have maintained focus on overpaying the mortgage.
    Two years ago the balance was at £76k reading up in this thread, today I am at £46.4k, and on-track to clear this in 39 months / 3.3 years from end of this month. The target was to clear it by my 50th, this should be clear by the time I am 47 if all goes well! :smile:
    I was able to make a £5k lump sum to the mortgage end of last year which has helped. But I am in the habit of rounding my bank balance to the nearest £5 every-time I spend using debit card, I do this via the online app's to round down to the nearest £5 whenever I spend and send the difference to the mortgage, the world of contactless and cashless has really helped focus on this and small chips away makes a difference, some months it can be £30-£40 on top of the main over-payment. Maybe I should start rounding to the nearest £10!
    Well that's my update, will be sure to update soon in the next year or so, for sure before I get to zero...

    Mortgage Free Wannabe Light Bulb Moment (Early 2012, started May 2012)
    Original Mortgage Amount - £147k (Oct 2005) / Term 27 years (To 2032)
    Target to Pay off by 2026 by overpaying - Officially Mortgage Free June 2023!
    Balance Reduction Progress: May12 £128k / Nov13 £120k / Dec15 £107k / Mar18 £87k / Mar21 £46k / Jun22 £28k / Jun23 £0!!

  • 20vt-rs
    20vt-rs Posts: 674 Forumite
    Mortgage-free Glee! Name Dropper First Post First Anniversary
    edited 28 June 2022 at 1:17PM
    Wow 10-years since I opened this thread, time flies...

    Quick update, prompted by receiving a letter from my current mortgage lender that my 5-year fixed rate has 12-months to go. Given the current climate, I am re-thinking how to manage the remaining mortgage and have a plan...

    Since my last update last March, I have managed to clear approx. £18k from the mortgage  :)  As of today, there is approx. £28k remaining, and the 1.94% fix runs out July 2023. Because the rates are now going up, I think a low rate next July will not be possible, and coming out early will incur a 2% fee of the original borrowing.

    So the plan: Continue to overpay the mortgage as much as I can over the next 12-months, forecast balance next July would be around £13k-£15k remaining. I do have an emergency fund, and I am thinking about using this next July to clear the mortgage in full! From that point, anything I would have paid to the mortgage will feed the emergency fund to get it back up, once it's at a good level then who knows, a holiday or a new car ! Or maybe be sensible and increase the pension contributions  :D

    Wish me luck, I feel like I may be on the home straight :) 
    Mortgage Free Wannabe Light Bulb Moment (Early 2012, started May 2012)
    Original Mortgage Amount - £147k (Oct 2005) / Term 27 years (To 2032)
    Target to Pay off by 2026 by overpaying - Officially Mortgage Free June 2023!
    Balance Reduction Progress: May12 £128k / Nov13 £120k / Dec15 £107k / Mar18 £87k / Mar21 £46k / Jun22 £28k / Jun23 £0!!

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