Diary of a MFW 8-10 Year Plan.

uropachild

Hi all, i'm Sarah and i have started our journey to becoming mortgage free today. We owe a grand total of £85,447.20 and i am sure that we can overpay until we clear this within 10 years. I've been working things out on a spreadsheet and using the overpayments calculator and i actually got it down to being mortgage free in 8.5 years, but i will give us 10 to be more realistic i think.

We have a lump sum of money, which we were saving to invest. However, after faffing with numbers today i really think we would be better off getting rid of our mortgage.

By the time our current tie-in period expires in August 2014 i think we should have around £20,000 to pay off in one go, which will be a huge start! Also today i arranged to overpay by £65 per month starting at our next payment.

I'm excited about this! :T

originalmiscellany

So, in 15 months you can pay off 20k? Does your bank let you pay off more than 10% at any time?
It's a great start to clearing your mortgage, have you got a target as to how much you will aim to save to clear by August 2014?

I found every little overpayment makes such a positive feeling and when you see your monthly interest drop, the motivation to carry remains as strong!

uropachild

I am hoping that will be the case. We have most of that already, but if we save well we can make it to 20K. I am saying August 2014 because that's when our current fixed in period ends. So when we take out a new mortgage after that time we can just pay 20K off in cash. I hope i'm right! Please correct me if i'm wrong so i can replan!

I think we can save 6k a year without missing out at Christmas, still saving for car repairs/replacements and a small UK holiday each year (which is all we do anyway). We aren't big spenders usually, so i am hoping it won't be such a shock to our account for us to do this. Plus, i have gone back to work meaning we have additional income we're not used to which i have squirreled away straight away before we get used to it and it just becomes absorbed into spends.

DH is self employed too, so we have a separate rainy day fund that i'm not taking into account here. Just in case he's off sick or anything, but he knows he's not allowed to get ill.

muddywhitechicken

Hello :wave:

Welcome to MFW and good luck on your journey!

MWC

ETA - I used to be a scrapper... well more a collector of lovely paper and embellishments really as I always forget to take any photographs when we go places or see people!!!

dawyldthing

Usually when you come to the end of the term of your mortgage you can overpay whatever you want as you end up on there standard variable rate and can overpay as much or as little as you like. Like for me it should have been this January if it weren't for listening to the Halifax mortgage woman saying go for a 3 year deal to know what you are paying out.

Btw, hope you don't mind me asking on here, but has anyone with the halifax ever been charged the 3% they quote when overpaying over the 10% and if so when does it show? As I overpaid a lump sum a month ago and still not got any charges on it and I can't understand what is happening, but don't really want to phone up to complain about it as it seems silly

uropachild

Thanks, ill make sure we sit on the standard rate for a month then so we can get a lump sum paid off. I don't know the answer to your question though sorry! This is all new to me. Hopefully someone else will see who knows.

I'm having trouble convincing my other half this is the way to go. I thought he was all for it, but it turns out he has some reservations, which is fair enough. He's happy with overpaying by £65 a month for sure, but is hesitant about paying off a lump sum.

I've said that we have a year though. We are savers anyway, so I said let's just continue to save, continue to think about other investment ideas and ways of making our money work better and then decide for real when the mortgage fix is due to end. It doesn't mean drastically changing our lifestyle, just a decision about how to use the money.

I think it's best we do this now while the kids are still young and relatively cheap. Then we will have more money per month when they get to the stage of "needing" designer this that and the other.

uropachild

muddywhitechicken wrote: »

Hello :wave:

Welcome to MFW and good luck on your journey!

MWC

ETA - I used to be a scrapper... well more a collector of lovely paper and embellishments really as I always forget to take any photographs when we go places or see people!!!

Lol! I should say I used to be a scrapper too. I have tons of gorgeous papers and things packed away and just don't seem to find the time to get it all out now. I used to have a craft room, but that became the kids playroom. Lol! So now it's in storage gathering dust. Sigh!

yukkibear

Good luck on your journey. We're aiming for around 8.5 years too instead of 18.5 we have left. We have 93k outstanding, but have a plan in place to hopefully knock that down in the time frame.

uropachild

Hi yukkibear! You're pretty similar to us then. We have 18 years 10 months left and a similar amount. Kinda. lol! What's your plan? Are there any secrets you can let me into?

yukkibear

I don't really have any secrets, just trying to stick to a family budget, anythimg under budget gets squirrelled away. We have been splitting anything extra between savings and overpayments.

I always look around for extra ways to make or save money

uropachild

That's a good idea to split between savings and overpayments. I don't want to pay everything onto the mortgage straight away in case we need it for something breaking or whatever, but at the same time i don't want to just do savings and then be tempted to spend it all.