Tinytott's Mortgage Free Quest Begins - My 10 year plan

Tinytott

Hi all,

I've been a lurker for years, but never posted before so bear with me! I've been reading about all you fab people paying off your mortgage early and today, decided to really do something about mine.

It's going to be an incredibly long haul, but my goal is to pay my mortgage off by 2023. £109k of that is originally planned to be paid off in 2026 and £60k by 2032, so I'm knocking three years off the term of some of it and nine years off the rest. A challenge!

The breakdown is as follows:

£9k 2.29% expires 2026
£109 2.29% expires 2026
£61k 2.59% (was 2.89 until today) expires 2032.

Currently, I have a total mortage debt of £180k approx, having moved into a new house last year. In short, it's a money-pit. It needed loads of work and so far I've spent about £60k on renovations (eek!!) and I reckon it needs about another £40k to finish, so apart from trying to find that money, I'm going to try and pay the mortgage down too.

On top of that, there's about £6k of credit card debt (0%) from paying off lawyers after my horrible divorce! There's a car debt of £11k too.

It's all a bit overwhelming! But today I decided to start playing around with mortgage calculators and decided to phone my mortgage provider to see if the portion of my mortgage which I'm paying 2.89% could be remortgaged at a lower rate. I was delighted to get the rate reduced to 2.59% on a fee free basis!!

That brought that portion of the mortgage down from £352 a month to £343, which is only a saving of £9 a month. That doesn't sound like a lot does it? However, when I put this into the mortgage calculator, I was staggered to see that this small amount will save me £2,400 over the life of the mortgage. And, if I simply do nothing more than keep the payment at the original £352, rather than let it reduce to £343, I cut 1 year and 4 years off my mortgage and save a staggering £4k over the length of that mortgage!! Not bad for a fifteen minute phone call! I felt like I'd made a huge important step. I'm sure it won't always be this easy!! lol

I'm single so I'll be doing this solo and although it's a scary thought, it's also so motivating to think that I could be mortgage free in ten years!

I suspect that my payments initially will be quite small as I'm currently plowing money into the renovations. The pot of money I had saved for that is spent, so it's now all coming out of my salary. But I've been totally inspired by all your stories of how small changes and regular small contributions really can chip away at the debt, so I've decided to add this to my list of goals for this year.

Any guidance you can offer me would be gratefully received!

Tinytott.

Secret_Saving_Squirrel

Really it is as you say, tiny, just chipping away and saving where you can. And overpaying every penny you save so that it breaks down the interest.

Not sure if you are pink or blue, but either way cutting down on the non essentials like books, clothes, CDs, DVDs, magazines and takeaway food has really made a massive difference to us. It is shocking how much you save when you just get organised with a shopping list and resolve to just not spend anything else all week.

All the very best,

Squirrel

Tinytott

Thanks Squirrel. I've enjoyed reading your diary, you are one of the inspriations on here! I'm pink, although you wouldn't know it by the amount of DIY I do!

So, today, I decided to start. Just small things, but got to try and get the debt down somehow!

I have two current accounts and both have managed to get into overdraft with the house refurbishments, so I paid one of those off today (£500) and the other one I will start on next month - it will take a few months as it's £3.5k overdrawn - eek!. I worked out I've got £15 a day to live on for the rest of the month after paying all bills and fuel (but not food), so the challenge will be to have as many NSDs as possible so I've a little left over for the OP pot/reduce the overdraft pot lol.

I received £47 today from a friend who owed me, so transferred £10 to my credit card and £37 to the mortgage OP pot as it's money I'd forgotten about. I also did a tilly tidy with a few pence from a savings account, so currently there is 37.62 in the OP pot. Ideally, I'd like to get it to £100 for my first month (August).

I appreciate the interest rate on the overdraft is higher, but I just want to get started. I need to make this a discipline and something I do without thinking about. The overdraft will come down in chunks of £500 - 800 each month if I live frugally and I've a bonus due in November so I'm hoping to clear that off by end December. I've decided to park all non essential improvements to the house until I've gotten rid of this overdraft. There are small things I need to do to make it totally wind and water tight for the winter, but these should cost me no more than £250 over the next few months.

I have two credit cards which are 0% totalling £6K . I'm just paying the minimum on them as they have really long periods of repayment. But I received a letter from one of the banks the other day saying they'd noticed I'm only paying the minimum and giving advice etc. So, I'm not sure if that's a good thing or a bad thing, but decided to overpay £10 today (ontop of the minimum payment that comes out by DD) to keep them happy. Is it bad for your credit file if you just keep paying the minimum?

Anyway, that's it for now. I'm thinking of getting a cashback credit card as every little helps. But not totally sure whats the best to get so need to do some research on that. And thinkinig about selling a few things on ebay this month which would hopefully help me reach my £100 target.

I have loads of protein and carbs in the house for the next week which I got last week from the reduced section at Asda, so just need to go tonight and get lots of fresh fruit and veg. I will no doubt end up getting a cheap bottle of wine too, but hey ho, it's cheaper than going out! I also confess I like a cigarette with my wine, so that's todays £15 gone I suspect!

Wishing you all a happy weekend!

Tiny
x

nattypants

Hi Tiny

Your diary struck a bit of a chord with me, as I too have a money-pit house;) SSS is bang on regarding the non essential items - this has taken me some time, however I appear to have successfully cut back on my love of magazines, and currently wine:eek:

Anyway, just to say 'hi, and good luck'. Great start to your diary and I'm looking forward to future instalments.

NP:D

Tinytott

Thanks Natty, yours is another diary I've been reading for ages (oh the sneaky lurker that I am lol).

Have a great weekend!

Tiny

Beckyy

Hi! Welcome to the forum. It sounds like you've got the planning part sorted, and I look forward to reading your MF journey

Once you've got into the mindset I'd definitely try and tackle the higher interest things first, although it's disheartening not seeing the mortgage go down if you look at them in the same perspective it will save you more money that you can then OP.

Tinytott

Thanks Bekky, I totally agree with you re hitting the high interest accounts first. That's why I cleared off one overdraft today and intend to put the bulk of my disposable income over the next five months towards reducing the other to nil by XMas. The goal is to reduce that by (a least) £500 a month and use my end of year bonus of approximately £1k to kill it off completely. Of course, if there's more disposable income, then I will clear it quicker but this is my basic goal.

But the mortgage free bug has hit me tool lol, so I decided that I will try to start putting a very small amount away each month towards that. It just feels good to get started. If I get a few pounds here and there, I'll put it to that. I will ebay some things round the house and see if there's other ways I can raise small amounts of extra cash, so any ideas would be appreciated!

Just bought a card from Asda which I get through my job. It gives me a 5% discount. So, £50 card should be £47.50. I realised when I clicked through I had £5.50 cashback on the account too, so it only cost me £42 for a £50 card. Going to try and make that last me for the rest of the month for grocery spends. It won't arrive til Monday though, so this weekend's shop will be on top, but hoping to keep that to £20 (not including the dreaded weekend, must have with wine ciggies!). So transferred another £8 to mortgage OP pot. Total so far this month £45.62 which means I'm always half way to my goal of £100.

Tiny

TheFactory

Hi TT

As said, pay off the higher interest things first, you can snowball all your money saved into the next thing to pay and before you know it you will be debt free and able to start bringing the mortgages down! This is what I did this year, I still havent over paid a single penny on my mortgage as I wanted to get my unsecured debts sorted first!

Good luck!

cardiffmatch

Hi TT,

Congrats on getting started - I'm aiming for 10 years too, although my realistic MF date is a little beyond that at the moment!

Like you and TheFactory, I had the "debts or mortgage" question, having been flirting with the MF world for ages! I finally got debt free last year and that was so important in getting us into a position where we were able to buy our house last month. Now I can focus on mortgage payments without a disheartening chunk going to credit cards etc - I have to focus on staying this way though.

Anyway - I just wanted to stop by and say good luck and I hope we will both succeed in ten years and be here to celebrate!

CM

Tinytott

Thanks CM. I will have a look at your diary if you don't mind and get some tips!

I phoned the Halifax as it occurred to me I might have overpaid my mortgage exit fee back in 2010, so sent a letter off as they are no longer dealing with it over the phone. I might get nothing, but my philosophy is "if you've nae cheek, you've nae chance!" (yes I'm Scottish lol).

Have a great weekend!
Tiny

Hurdler

hahah - yes my house was frequently referred to as the money-pit as well, but you are on the right track wanting to be a MFW good and early - good luck with your journey