When I grow up - my mortgage free journey

Yorkielass

After a lengthy gap I'm back and focused once more on finances.

In the end we overpaid £9340.82 in 2014 and took our mortgage free date from February 2042 as of December 2013 to December 2038 as of December 2014.

The monthly direct debit works well for us but I got slack at trying to add extra money and over the summer I didn't add anything extra for months. In November I updated our finances and added a £1000 overpayment which helped.

2014 got away with us as a year and I don't feel I kept on top of various areas of my life very well.

However we did do some big jobs on the house, our bedroom has been gutted, rewired, replastered and redecorated. We had the driveway widened and redone which has made a huge difference to the outside of the property (no more wobbly paving slabs) and then in November a new bathroom old one completely gutted, everything moved round and it's now lovely - I can have baths again :j (the cold tap didn't work on the old bath and the bathroom was manky so you didn't want to spend too long in there anyway!)

We've also done some smaller maintenance jobs too and have a list for 2015, which not quite as big or financially draining I hope, will continue to improve the house.

I think part of my trouble with overpaying/MSE is that I was trying to do too much that had small financial rewards given the time I have. For example Sw*gb*cks, survey sites etc. Years ago I Mystery Shopped but gave it up when I got a better job and started doing more volunteering.

I think last year I was putting too much effort into trying to do little surveys, click/search on things, do tillys tidies etc and the pressure outweighed the benefits. So I've stopped doing those things.

I'm still selling stuff gradually and the money made goes into a pot for home improvements like new furniture as always but I think I've realised that I can't work full time and have two substantial volunteering roles and then use free time to do these little bits and pieces. I know they work for lots of people and I've never knock them as a valuable tool - before I got this job they were invaluable - but I need to get my priorities straight.

So that's a bit of a review of 2014 and a few thoughts on 2015.

I need to do some budgeting spreadsheet type things this week - and will then share a bit more of our financial planning. I showed OH my Locoblade spreadsheet yesterday and we played through with various numbers and he could really see the impact OPing can have - he always got it, but I think filling in numbers and seeing the end date get closer is a big motivator.

Considering our fixed rate runs until August 2022 so things are predictable in terms of interest until then and assuming that rate continues afterwards (which it won't I know)

Overpaying our standard £642.54 a month (to bring mortgage payment up to £1500 total a month) sees an end date of August 2027.

Increasing it to £750 a month (£9000 a year so roughly what we achieved last year) sees an end date of February 2026.

Increasing it to £1000 a month (£12000 a year, my target for 2015) sees an end date of February 2023 - so basically when the fixed term ends.

Lots of things will change before then I'm sure in our lives so it won't happen but when OH realised we could be mortgage free at 40 (and neither of us are higher rate tax payers so it's not like we're earning mega bucks) rather than 60 which is what we took our current mortgage out over I think you really see/remind yourself what this overpaying does.

So thanks to everyone on this board - I've followed some new diaries to give me more motivation - financial planning time now.

SuperSecretSquirrel

Good to see you again Yorkielass! Well over 9k in overpayments last year in addition to plenty of big home improvements, sounds like you had a great year to me! Looking forward to seeing what you achieve this year

Yorkielass

January is always a hard month at work - long days reading on computer screens mean forums are low on priority.

Our regular £642.54 went out on Monday and it's a 'free' council tax month so I need to call up and pay that money in this week.

Yorkielass

Started the extra overpayments this month:

£128 council tax

£46 change that we had around the house bagged up and paid in

£30.09 left over from some money I've been owed for a while and just claimed back. Most of it went on my new sewing machine but this was the 'leftover' so it can go on the mortgage.

That's £204.09 extra so £846.63 for February at the moment.

Current MFD is July 2038, have taken 5 months off so far in 2015.

velocity_girl

Hi Yorkielass, just started reading your diary. You are doing so well, that's a big regular OP to be making every month! Makes me feel I should be trying harder

Will be following your journey!

jodles16

Sounds like your making great progress! Fab aim for this year as well, best of luck!

Jodles

Yorkielass

Thanks @velocity_girl and jodles16 - it's just works for us due to salaries versus outgoings.

Yorkielass

I've done it again, so much going on at work, the perils of having to call to make overpayments rather than doing them online, and then leaving it longer and longer have left another 3 months gap but:

Today I finally called up and made the overpayment I should have in Feb, and the £128 council tax for March and £17.91 to round that up to £350.

I recently looked at my ISA and took £2000 out of it, which I've put onto the mortgage today. That means I have £10000 in my ISA. I don't want to do below that (it's about 5 months take home salary for me) it's money just in my name and I just feel happier having some money there that I can get to easily rather than sticking it all in the mortgage overpayment.

So OPs so far in 2015:

January £642.54
February £642.54
March £642.54
April £642.54
May £2992.54

Total £5562.70

46% of my target for 2015 so far and 19 months off this year so far.

Now on a MFD of May 2037 (rather than August 2042 if we'd not overpaid at all).

We should be able to afford to increase our standing order more - that's what's going to work best for us in the longer term. Part of the trouble is we've both started using credit cards, paid off in full each month, but I haven't quite got our accounting sorted with the bills yet, and if I pay for something on the credit card which I have money in a savings pot for, e.g. gifts, I'm not very good at repaying the current account.

I'm going to set myself a weekly challenge and each Thursday come on here and update what I've done, so the challenge this week is to get my credit card bills and 'balance' things and start an updated SOA.

egoode

Congrats on your overpayments so far. I think it's definitely a good idea to leave the rest in the ISA as you never know when you might need money quickly.

Yorkielass

Thanks @egoode - the mortgage money can be withdrawn at any time but yes I don't want to go below £10,000 in that account.