Mortgage Free Life Begins at 40!

Winter_Jasmine

Hi All,

Mr WJ and I bought our home in late 2005, always intending to overpay. Our hope was to pay it off by the time Mr WJ turns 40 in March 2016. I've been lurking on this forum for years and years and found you all really inspirational but now that we're within two years of our ideal target I think it's finally time to start my own MFW diary!

We've managed to overpay a few thousand every year, which has reduced our mortgage from £100K to £43K at our last annual statement date (Sept 2013) however, we really need to pick up the pace if we're to get anywhere close by March 16. Our fallback target is by the time I turn 40 in 2018, which is hopefully pretty realistic.

We're on a lifetime tracker mortgage with a rate of 0.99% above base rate, currently scheduled to finish in 2030 :eek: We can make unlimited overpayments but can't reduce the term (there's an early redemption fee of £250 if we want to pay it off completely). Although the term doesn't reduce, we are able to keep out monthly payments the same - which means that every time we've overpaid, more of our standard direct debit has actually become an overpayment itself - iyswim. Our provider will only recalculate the payments without us requesting it if there's a base rate change

We're lucky enough to have no debts and we're both working although I've had a very early warning that my job might be at risk in the next few years - which is obviously another bit of motivation to pay down the mortgage.

Mr WJ is brilliant with money, I'm definitely the spendy one! I'm really trying hard now to save every penny I can - love the phrase I've seen on someone's signature on here 'every penny's a prisoner'! I'm trying to keep that mantra in my head

I'm hoping that being active on this forum will help keep me on the straight and narrow and remind me of my financial priorities!

Winter_Jasmine

I'm trying to be as old-style as possible and save money that way. Was really annoyed today that I had to resort to the tumble dryer, it was really foggy here this morning but I hung the washing out anyway hoping it would lift, which it did a bit. Then someone lit a bonfire so I had to admit defeat!! First time I've used the dryer in a couple of weeks though. I've also been wearing a jumper indoors instead of having the heating on all the time (yay me :rotfl:)

Mr WJ came home from work with half a dozen huge (and free) free range eggs last night. The colleague who gave them to him reckons he'll be able to let us have a box a week as he gets so many and doesn't want anything in return - how lovely! So there's £1.50 a week saved :T

It's my Mr's birthday today so, instead of spending £20 on the usual birthday takeaway we're having steaks bought from the meat man at our local market (we've started going to see him late afternoon when he knocks everything down so he can go home!) with broccoli from my Mum & Dad's garden and a bottle of fizz that I won in a competition

OldBeanz

Noble gesture to pay your mortgage off early but you would be better off paying the money into a Santander 123 account and earning 3%. If you had stuck the excess money into shares you would have been even better off.

Winter_Jasmine

Funny you should mention that...I've just been looking at the 123 account. For the first 5 years of our mortgage we tracked at base rate but the rate couldn't fall below 4.5% (if my memory serves me correctly) so we haven't always had it quite as good as we do now! I know that a good part of our wanting to clear the mortgage is ruled by our hearts rather than our heads - the idea of freedom through being mortgage free is something that definitely spurs us on, especially as neither of us are particularly happy in our jobs. When our savings rates were better we used to build up a bit to earn interest and then make an annual overpayment. The 3% rate on 123 savings is definitely worth looking at, thanks for your input

Happier_Me

Welcome to the forum.

You are on a great rate and your targets are similar to ours. I would love to be mortgage free by the time I reach 40 (next year) but this isn't realistic so we are aiming for mortgage freedom the year DH turns 40, so 2016.

I've also thought about slowing down with the over payments and increasing our savings as an alternative but, like you, I really want to be mortgage free so we have the freedom to make some lifestyle changes in our forties. We've been mortgage free before for around 18 months and it was great but I am sure it will be even better second time round, knowing we don't intend to move again.

I have a monthly cash flow that tracks our in comings and outgoings. Many on here have savings pots and this works really well for them but I'm not that organised so I set myself a monthly budget of £700 for the credit card (£400 Food, £100 Fuel, £200 Entertainment/Clothing/Other) and £150 Cash (£30 travel, £10 Lottery, £110 Entertainment/Other). We can live comfortably within these budgets but do occasionally fall off the wagon.

I am earning an extra £400 a month at the moment which has paid for our holiday and annual expenses (car insurance/house insurance etc) this year.

Since joining this forum I have started meal planning and batch cooking. I can't recommend this highly enough. We try to be sensible with out decisions too - for instance, I would much rather take my two children on a day trip than spend £60 on a meal out for instance. I would much prefer to have a holiday or a couple of weekends away during the year instead of a takeaway once a week.

Good luck with your MF plans.

Alchemilla

Welcome! Pretty name.

Hurdler

It sounds like you have a similar tracker to mine.
Welcome to the forum

:wave:

Winter_Jasmine

Thanks for your replies I'm following all your diaries and am finding your progress really motivating!

DH and I have separate current accounts but each pay into a joint one for bills. We don't set a budget for groceries etc (DH doesn't see the need and tbh, if I was as good with money as him I wouldn't either!) but we are very careful. We have a chest freezer that's usually stuffed full of bargains from the whoopsie fridges, we make good use of vouchers and we bulk buy household goods and other non-perishables when we see really good offers. My problem is that I get distracted by pretty, shiny things! I've been doing very well with non-essential spending since Christmas though. Someone said on this forum the other day to remember that 'we're MFW, not DFW' which is a really good way of looking at it - however, I'm taking advantage of feeling motivated and so probably behaving fairly DFW at the moment, which won't do me any harm at all!

Totally with you on the holidays Happier Me
that's the one luxury we try not to do without. We rarely go out which is fine by me - I'd much rather spend our spare cash on a break away than waste money buying a hangover! :rotfl:

I made our first overpayment of this mortgage year (Oct-Sept) last week , which we'd saved over a few months. Despite the sensible thing probably being to put money into a 123 account, from now on I'm planning/hoping to make an overpayment every month - as soon as I'm paid and know what I had left from the previous month's salary I shall be on the phone to the bank

My other challenge this year is to offset the cost of Christmas and birthdays by earning cashback and doing surveys. I've currently got almost £18 in OnePoll and a couple of quid in another survey account so got a loooonngg way to go - luckily I am saving monthly as well

Winter_Jasmine

Alchemilla wrote: »

Welcome! Pretty name.

Thank you This will make where I live sound far more idyllic than it really is but when I was trying to think of a user name, I looked out of the window and one of the first things I saw was the lovely winter jasmine flowers growing up our fence. My other choices were 'wood pigeon' or 'dead hanging basket' haha :rotfl:

Winter_Jasmine

Right - started the week off right by making lunch for tomorrow using some of my Approved Food couscous mountain with some frozen peas, sweetcorn and peppers (bought with £10 Iceland voucher that I got free for trying their bingo site :j ) I'm awful for ordering stuff from AF and then just ignoring it so I've promised Mr WJ that I'll consume couscous mountain before buying any fresh lunch foods It's working out quite well tbh as it only takes me about 30 secs to prepare and I can take it with me when I'm working away from the office. Bit concerned about all the starchy carbs seeing as I've been a bit rubbish with food and exercise lately. However.....tomorrow is the start of my pre-summer health kick, which means chicken and steamed veg for dinner, NO alcohol, crisps or chocolate and re-starting the couch to 5K plan.

Hope you all have a lovely week xx

Winter_Jasmine

Well, health kick day one went pretty badly - came home from work and instead of a run/walk had a large Baileys and a nice sit down!

On a much more positive note, DH came home with half a dozen free eggs from a lovely colleague and had confirmation of his annual bonus which will be paid this month = a lovely overpayment of £2k+ to be made next week :T

Very happy today - I did some calculations this morning and I think that it may be just possible (although very hard) for us to pay off the mortgage by Feb 2016. 23 months to go is a really lovely thought but depends on stable incomes and no major financial hiccups...but it is a very lovely thought....:happyhear