21 year old mortgage free by 30. 26 December 2012 at 1:43PM in Mortgage-free wannabe 10 replies 4.2K views

YoungBusinessman

Just got keys to first home with gf last Friday. We have a £100,000 mortgage. 5 year fix paying £650 a month over 20 years. By end of 5 year fix would like to have paid off a good chunk of this mortgage. After 5 years move to next place and rent this one out while maintaining overpayments(if its worthwhile) and eventually have £700 a month(possible more since speaking 5+ years down the line) income to use elsewhere.

Not even made first monthly payment yet and already playing about calculators for paying off. Other things will get in the way for 2013 but a steady £100 a month each is £2400 a year without even noticing!

Don't have Internet in house until 5th Jan so may be delayed updates until after that.

Themandarin

Sounds great. I was 20 when I bought my first home and will be 26 this year. I'm now thinking seriously about overpayments etc and I have seen a lot of people on here saying they wish they had started overpaying young. All the best.

gallygirl

Welcome YBM and congrats on getting the keys - I know it was a bit touch & go for a while :T.

You will find a challenge on HERE for 2013 if you would like to join and there is also a 3 year challenge just starting. Those of uis who've been here too long already find them really useful at keeping us on track.

Good luck

GG

Southernman

You're a similar age to me and I'm on a 5 year fixed. I've been overpaying for about a year now. Join the 2013 challenge as someone suggested, I found it really motivating in 2012. It'll help a lot having two people overpaying as a team too!

My mortgage before overpayments is £473 and £300 is interest!!!!!!!! It's DISGUSTING. The sooner you start overpaying the less likely you'll look back

I plan to rent my flat off eventually too as rental income would be £850-£900 pm so we have similar long term goals!

Good luck and i'll read your diary with interest!

moneycurious

Welcome and good luck!!!

BaconandEggs

YoungBusinessman wrote: »

Just got keys to first home with gf last Friday. We have a £100,000 mortgage. 5 year fix paying £650 a month over 20 years. By end of 5 year fix would like to have paid off a good chunk of this mortgage. After 5 years move to next place and rent this one out while maintaining overpayments(if its worthwhile) and eventually have £700 a month(possible more since speaking 5+ years down the line) income to use elsewhere.

Not even made first monthly payment yet and already playing about calculators for paying off. Other things will get in the way for 2013 but a steady £100 a month each is £2400 a year without even noticing!

Don't have Internet in house until 5th Jan so may be delayed updates until after that.

Hi there and welcome.

That sounds like a plan!

It looks like you have a good monthly payment. What is the current rate?

Dont forget to factor in months when a rented house may be vacant, and for repairs, maintenance and other fees etc. Also worth considering how to split overpaying current mortgage vs. deposit for new house. There will be an optimum balance. I'm sure someone will be along to advise on this - as a few people on here have done the same. It will depend on mortgage rates and savings interest rates.

Bear in mind that £100/month may be approx 2400 interest saved and not 2400 off the balance of the mortgage. It's still good to know it's money that doesn't have to be paid to the bank though!

At 21 you are way ahead of the game and I wish I was as savvy at your age!

BnE.

YoungBusinessman

Thanks for the messages guys, January and Febuary will not likely see any overpaying as will be finding our feet, had a fair bit of work done already, all necessary. I am also needing to find £5k to invest in my business. It will take march and April for that. So could even be as late as June when first decent overpayment is made. If mortgage was at a healthy amount say 50%LTV then I most likely will not overpay. Any profit from rents will be held back for repairs and to cover being vacant. If it built up enough I could clear the mortgage with it.

This is years down the line though, I need a 2013 goal, will take a few months to get everything in place so we don't have any major expenses over summer plus selling my motorbike so will help free up dead money-motorbike is unused, done about 300 miles over summer this year, that was it.

Rate is 4.89% I think, can see that being an ok rate when fix ends in 5 years. It is peace of mind until then knowing its fixed.

Tony_R

Good luck. Well done in starting so young. I wish I had bought my own place when I was younger, it was so much cheaper back then.

YoungBusinessman

Well finding our feet, done a lot of work already!! Not due back to work until Monday(paid holiday pay rates for tomorrow and friday) but going in next 2 days anyway. It will be quiet, ease my way back into it and get back into bit of a routine ready to pay off a whack of this mortgage in a years time! Think we are going to end up making it a lump sum payment, will see how things go! Even a few k each a year makes a big difference as mortgage is "only" £100k! 2 weeks today first payment comes off and it becomes a 5 figure sum owed!

Off topic a bit but gf been reading Michael macintyres autobiography, she suggested I read the last 2 chapters only. I did so, and glad I did. Thirty years old, took on over £30k of debt, rented a one bed flat, wife just had a kid, looked to be at a dead in career wise. So he used the birth of his kid to spur him on, now just a few years later he is a debt free property owner and has 2 kids. Oh, and a multi millionaire getting wealthier by the day id imagine! Great reading material, sounds a bit like how I'v started out! Took on over £30k of debt and now it's paying me £3k a month net(ok a far cry from his £6+million a year but who knows!) and soon enough il be debt free and a property owner as technically it's still the banks until I am 41 years old!

gallygirl

YoungBusinessman wrote: »

Off topic a bit but gf been reading Michael macintyres autobiography, she suggested I read the last 2 chapters only. I did so, and glad I did. Thirty years old, took on over £30k of debt, rented a one bed flat, wife just had a kid, looked to be at a dead in career wise. So he used the birth of his kid to spur him on, now just a few years later he is a debt free property owner and has 2 kids. Oh, and a multi millionaire getting wealthier by the day id imagine! Great reading material, sounds a bit like how I'v started out! Took on over £30k of debt and now it's paying me £3k a month net(ok a far cry from his £6+million a year but who knows!) and soon enough il be debt free and a property owner as technically it's still the banks until I am 41 years old!

So is she hinting that a baby is the key to your fortune :rotfl:?

YoungBusinessman

Definitely not, she knows she spends enough on her niece it would get out of hand if it was her own! Shes just gone self employed in a repeat client business so cant really take any longer than a week a time off over next few years......phew.