The Mortgage Free in Three - Take 3 challenge (MFiT-T3)

Mortgagefreeby50

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SusanneCape

JoeyGrey wrote: »

Hi GallyGirl - it's 1.49%. This is what the bank put me on when I came out of my fixed tracker 18 months ago. There's a £295 charge should I decide to pay it off early and no limit to overpayments.

I have the same rate as you and I have been mulling this in my head too. Savings vs Mortgage?

As the mortgage interest rate is so low, I am saving on a regular basis whilst also making overpayments, i.e. I am balancing the two. I don't think interest rates are going up anytime soon and a good ISA will earn more interest than you currently pay to the bank in mortgage interest. Should interest rates suddenly rise in a year or so, you have the option of throwing your savings into the mortgage OR use your savings as a deposit for a new property and let a tenant pay off the old mortgage.

Something to mull over .......

All the best,

RosieTiger

JoeyGrey wrote: »

So, I need to make a decision. Do I (1) wait till March next year, pay my mortgage off completely and enjoy being mortgage free for a while until I decide if I am actually going to start again on a bigger house, (2) wait till next March, knock my payments down to the minimum, let the mortgage run its course via my current savings as an offset while new savings keep building elsewhere that could possibly be used as a deposit for a new house at a future date, or (3) should I knock my payments down to a minimum now and use the £1000 per month I am saving as a deposit for a new house? (I doubt I'd sell this house by the way, I'd probably look into renting it out as a bit of a retirement security).

It's a lovely decision to have to make as whatever I do, I'll be in a great position next year. I just can't decide if I'm goiing to want to have another mortgage once I've got rid of this one.

My current house is an ex council house on the edge of the estate. I have a massive garden and amazing views, squirrels, foxes, hedgehogs etc in my garden. It's not exactly a classy area, but I feel quite safe here and have lovely neighbours, so I'm not forced in any way to move. But it only has 2 small bedrooms which sometimes frustrates me as I am tight for space and eventually I'd like to foster kids, so it will feel very small very quickly if I did that.

It's really a question of do I want a bigger house in a nicer area more than I want the freedom being mortgage free would give me and I just can't decide. So think I'll rule the third option out for now and make the decision next year.

Anyone who has been in the position of paying a mortgage off and deciding whether to start again, did you go through this thought process and what pushed you to make the decision you did?

So effectively you have just been given a huge ice cream sundae and your debating whether you want hundreds and thousands or just chocolate sprinkles !!!

Whatever you do will allow you to make the decision on the bigger house whenever you want.

Bricks and mortar is just like a longer terms savings account to me, so your decision should be based on what suits you best

JoeyGrey

RosieTiger wrote: »

So effectively you have just been given a huge ice cream sundae and your debating whether you want hundreds and thousands or just chocolate sprinkles !!!

Lol, that describes me through and through RosieTiger :rotfl:

I think it should be chocolate sprinkles, but then I start thinking about how much I like hundreds and thousands. And don't even start me on caramel sauce

I suppose I don't want to spoil that lovely feeling of no mortgage by jumping too soon, but at the same time I am longing for a better house and don't want to miss out. I think I'll stick with the plain ice cream sundae for now and decide next year on the topping.

gallygirl

JoeyGrey wrote: »

Lol, that describes me through and through RosieTiger :rotfl:

I think it should be chocolate sprinkles, but then I start thinking about how much I like hundreds and thousands. And don't even start me on caramel sauce

I suppose I don't want to spoil that lovely feeling of no mortgage by jumping too soon, but at the same time I am longing for a better house and don't want to miss out. I think I'll stick with the plain ice cream sundae for now and decide next year on the topping.

What about a flake? Or one of those little fudge fingers?

SuperSecretSquirrel

Shineyhappy wrote: »

Hi everyone, we are making our £700 a month op as have decreased the term by years so progressing nicely, but we off the topic slightly, what are you all doing about holidays?

DH and I can sacrifice just about everything, but the more I look at holidays the more I want to spend.

We have so far raised £400 through Ebay towards it but I think in all honesty I want to go on the kind of holiday that will cost about £4k for us both including spending money. Is this too much or should I get a cottage in the UK?

It's so hard to know whether to spend the cash and have a lovely time or do without and be better off but if something bad were to happen then I would wish we had of had the holiday. We aren't expecting bad news but loads of people I know seem to be getting some very nasty illnesses and sometimes it makes you think life is too short.

Any ideas?

It's very important to us that we enjoy life while paying down the mortgage. The aim is mortgage free in our thirties, but not at the cost of missing out on our thirties...

We don't really feel the need to have many 'things', we don't drink alcohol much, neither of us smoke, entertainment spends are pretty much limited to the occasional trip to the theater or cinema or zoo etc, we pay a tv license but no sky subscription, we exercise for free instead of paying for gym memberships, take packed lunches to work instead of eating at pret/starbucks daily, and so on... None of these feel like sacrifices to us, it's just what we do and in no way do we feel as though we are missing out.

Our relatively simple lifestyle frees up enough money to overpay the mortgage AND go on holidays. That's what we like to spend on really, holidays and providing for our future. We choose not to waste money on stuff we don't care about, and spend what we like on the stuff we do care about I don't feel guilty spending on a holiday as that's what the money is for, the mortgage isn't suffering for it, we're still paying it at a faster rate than we need to. It's a good balance! We very much doubt that a 5k holiday would be five times as good as a 1k one though, so after a certain price point I guess we probably would regret spending so much and not getting good value for money. But when the mortgage is all gone, who knows!

Something you might consider doing is what we do - we don't really value 'things' much, so why give gifts of 'things' to each other as christmas and birthday gifts? We do value spending time together, away from work, ideally somewhere hot and sunny, so invariably our gifts to each other end up being holidays. Doesn't have to be a whole holiday, could be some money towards a holiday, or some euros in a card so it's clear that its holiday spending money and not for spending in the UK!

Don't trap yourself into thinking that a cheap holiday option is a holiday cottage in the UK though. If you ask me that's not a cheap holiday. By the time you've paid for the cottage, traveled there and back, paid for meals out (we don't cook on holiday!), trips to the local attractions, etc, it's not exactly cheap. Same goes for the big name UK park holidays, not cheap either.

We recently spent a week in Spain for £650 all inclusive, we took spending money and ate out at restaurants and went on excursions etc while there, but with an all inclusive you don't really have to do this. If you're happy with just being in the sun, going for walks, enjoying the beach, and eating at the hotel, that £650 is the price of your holiday including spending money of zero!

Our next holiday will be a luxury ultra all inclusive one that will cost around £1000 plus spending money, still nowhere near the 4k you mention and should be a great holiday. Spending money should be pretty low as the ultra all inclusive deal includes a la carte dining in a number of restaurants at the resort, branded drinks, free access to the spa and sports activities, etc. Apart from a couple of sight seeing trips I think we'll be hard pressed to find anything to spend our money on to be honest!

I have no idea about your family situation, this is all from the perspective of a couple with no children, so the situation might be different if you have children to consider, but chillout holidays abroad can stack up quite well against holidays in the UK for a couple I think! I'd take a week in the med over a soggy cottage in the uk any day of the week, especially when they cost about the same, just keep an eye out for the good deals

Overpaying by £700, you definitely deserve a treat now and then!

SuperSecretSquirrel

double post

samtoby

Right its taken me a while to sort out my over payments because we moved in and then my beautiful Audi went up in flames and we had to buy another car straight away before the insurance had paid out as we needed a car and did not have the cover to have a free hire car.

So.

I have set a automatic payment of £75.00 a month but to be fair this can be increased to at least £200.00 I have calculated after we have had our new bathroom put in in the next few weeks.

I m really really really hoping to also save for when I am maternity leave so I can still cover everything but I think I might be expecting too much. I can only (I say only) lol :rotfl:overpay just under 11k this year and next due to the stipulations of our mortgage but might as well have a target. Can not see that I can afford that though!

I have just cancelled my very expensive contract as it has ended (£60 a month) and have got a sim contract with the same minutes and texts for SHOCK £8. I am discusted I have been throwing that much away for 24 months.

If we want to have a baby I really need to be tight and that means not buying Irregular Choice shoes, going out on random nights and meals out with my partner and treating my little boy to more than he ever needs. So here goes.....all be it a little behind schedule. :mad:

samtoby

Just made my first one of payment to take my balance to a round ammount of £3.07!

Trying_to_be_good

Hi SamToby - that sounds like great progress, and you know exactly where you stand so can make decisions with all that in mind. The mobile phone contract bit is so shocking when you first discover how much just keeping an old contract going is costing - it's one thing when you're paying for the handset in the initial part of the contract, but then it's just waste!

I've now paid the deposit for our exciting new Orangery work, and the planning fee, so will be anxiously awaiting the planning decision in a couple of months' time. Hopefully they'll get on and order the aluminium window frames and I can build a detailed project plan to satisfy my OCD-streak (as my mortgage spreadsheet and graphs are so under control!).

Happy overpaying, everyone!