Aiming for Mortgage Free by 1st September 2018

Andy_WSM

Hi all,

I've been a Virgin One account customer for some time and found it useful at times as it allowed me to over/under pay as and when I liked. However; they no longer honour their "always 0.5% above the bank of England rate" and haven't done so for some time and are no longer a cheap deal as they used to be. I decided to shop around for a new mortgage and am moving to Tesco on 1st August 2013 with a new starting balance of £40,000 over 10 years on a fixed 5 year term at 2.49%, then variable for the last 5 years. Property value is currently £180,000.

I can overpay by 20% per year. I have also set up a separate savings scheme to save £375 per month for the next 5 years, idea being at the end of the fixed term I will have enough saved to clear the balance and not be at the mercy of potentially higher interest rates.

So it all seems to be a great plan to be mortgage free in 5 years time and this is my thread to keep myself on track with the plans.

Alongside paying the mortgage, paying into the savings schemes, I intend to keep squirreling away money so that I can meet the 20% overpayment each year - that way, in 5 years time I will not need the lump sum of savings and it will be mine to squander on holidays, hookers & drugs (I only do one of these really and it usually involves Micky Mouse, so you can work out which it is!).

Here goes...Wish me luck...

nattypants

What a fantastic position to be in Andy! I am of course hugely envious, and my one piece of advice would be to go easy on the drugs

muddywhitechicken

Good luck Andy

elantan

I always knew that mouse was trouble

Good luck

MallyGirl

We are still with the one account because we are using the flexibility a lot in the coming months but it certainly isn't the best rate any more. We pay 3.9% with less than 50% borrowing facility to value of house (facility of £280k on value of £615k). If we were prepared to be less flexible we could get a much better rate I am sure. Maybe when we have paid off the upcoming big stuff

Andy_WSM

Mortgage completion happened yesterday as planned. The whole process of remortgaging from RBS (Virgin One) to Tesco has gone very smoothly indeed!

ixia

Welcome Andy, Great plans and good luck

Andy_WSM

Got a cheque in the post today for the difference between what I borrowed (which was the minimum £40k Tesco would lend) and the amount I owed. Just over £400 which is the first months repayment sorted, so nearly all of this months salary can sit in savings towards clearing this debt on it's 5th anniversary

I'm feeling good right now. No debts, Utility bills all in Credit, and cupboards & freezers rammed to bursting with food. I actually have no NEED to spend any of my salary this month, although do have a day trip and a weekend away planned so will spend some.

Andy_WSM

Oh, nearly forgot. I decided to sell some stuff that's been kicking around in the loft for too long on eBay. So far raised £100, hoping to raise over £200 in total and it will all go towards paying off the mortgage early

I'll update with my numbers at the end of the month, but hoping debt (currently £40k) - savings = ~£38k" after only the first month \o/

mywifenow

What an amazing position to be in, Andy!

We too set ourselves a realistic plan to be mortgage-free, but in seven years instead of five ... overpaying when we can (up to 10% per month if we wish, but the chance would be a fine thing!), and putting savings away to try and shorten that 'home-stretch' as much as possible.

Best of luck with it all ... may your rainy days be few and your clover plentiful!

Andy_WSM

I love the enthusiasm to be debt free that we all share in this forum.