Mortgage Free by 40? 8 years to go

argomatt

I am not really sure about how this works, as I just registered and haven't posted anything on the forums before, but I am inspired by reading about everyone's efforts here!

I am 32, have a mortgage with RBS which is fixed for 3 years, I can't remember the exact rate but it's just over 4%.

I am allowed to make overpayments of 10% of the outstanding balance each year.

This year, which is my first year, ends on 31/07/13 and I can pay up to £9800. I have overpaid £6750 already, leaving me with 8 months to find an extra £3050. (Although it will be a bit less, as I am now overpaying about £40 every month, as I didn't reduce my monthly payment)

I can see this first year being very difficult but I am determined to give it my best shot to meet the 10% target, and that will make it easier to hit the targets in subsequent years :j

frugal_wannabee

I too have embarked on the journey towards being mortgage-free by 40 this year!

Yesterday, I called the mortgage company to set up the overpayments. They start small, because me and OH are simultaneously saving for a kitchen extension. Once we've done that, hopefully by May 2014, then we'll ramp up the repayments and get the mortgage cleared by 2020.

Am already making good progress... today I called the Student Loan Company to see how long I had left and it turns out I've already overpaid by one month! So that's a bit extra I can add to the savings and overpayment pots each month.

Have also checked my old nectar card - and there was £20 left on it(!) Was like finding an old note down the sofa.

Hope your plans go well - look forward to sharing progress!

Lois_E

Hello argomatt and frugal_wannabee and welcome to MFW, both of you. :wave:

Good luck with your mortgage journeys. You will find everybody here is very friendly and supportive. We all have different approaches, and some are making much faster progress than others, but we don't let our differences get in the way of cheering each other on for any progress large or small.

argomatt

I am looking forward to the day my student loan payments will stop. That should give me another £150 a month to put towards the overpayments, although as far as I can tell it will be about 3 years away. It seems to be very hard to get any up to date information from them.

I think it will be a great motivator to share updates on here.. how did you get your signature set up with your present situation? I can't see how to do it

Lois_E

On the green bar near the top of the page, click on User CP. Then select "edit signature" from the list down the left hand side.

argomatt

Thankyou I think I should have it sorted now

Tilly_MFW_in_6_YRS

Hi Argomatt, good luck with your plans. Looks like you've made impressive progress already.

As Lois mentioned, everyone is friendly and supportive and that's a big help.

Best wishes Tilly

argomatt

I have been reading in peoples diaries about using spreadsheets to calculate and keep track of overpayments. Although I am not very skilled with Open Office I would like to try to do it. Can anyone help with the formula I need to get started like my daily interest charges?
Thank you :-)

Tilly_MFW_in_6_YRS

Hi, can I suggest you search for Financial Bliss in the MFW forum, and Locoblade. They both have provided excel templates/set up data which you could use.

Best wishes Tilly

Lois_E

argomatt wrote: »

I have been reading in peoples diaries about using spreadsheets to calculate and keep track of overpayments. Although I am not very skilled with Open Office I would like to try to do it. Can anyone help with the formula I need to get started like my daily interest charges?
Thank you :-)

Agree about looking for FinancialBliss's spreadsheet and/or Locoblade's. However, if all you want is a formula for daily interest, I can give that to you. I assume your interest is calculated daily and compounded monthly, because that's the most common, but check that, because not all mortgages are the same.

Put your annual interest rate in a cell somewhere. Let's suppose you put it in cell H1. Make sure it has its % sign on it. Then in another cell, type
=((1+$H$1)^(1/12)-1)/(365/12)
(Obviously, change the $H$1 to the location of your actual cell with the annual rate.)
This will give you your daily interest rate.

Hope that helps.

juicygirl

Hi argomatt,

I am in the same boat as you, 32 this year and hoping to clear the mortgage by 40. My mortgage is bigger but I have the benefit of some critical illness money than can be used to reduce mine a good deal at the end of my fixed rate in 2014.

I will watch your journey with interest. Good luck!!!