The Mortgage Free Roll Of Honour

rajeshdadwal

money_friend wrote: »

a. The date you decided to become a MFW - Dec 2005
b. Mortgage Debt at its highest - £241k
c. Mortgage-Free Date - fingers crossed by Sep 2009. (im 31). I have £30k to go!
d. Your one perl of wisdom - prioritise. I went without a decent car, designer handbag, lots of self pampering and splashing cash, to pump 95% of my salary into my mortgage each month! its dull, but so rewarding too!

95% of your salary into mortgage. What about bills and other general expenses?

jennyjelly

About 10 minutes ago I phoned ING and paid off the mortgage and now I feel like I'm walking on air.

We took our mortgage out in 1980 and through various house moves and home improvements it grew to about £40k. Not a lot now I know but when you think it was originally £16k to buy a house that cost £18k it had bulked up a lot.

About 10 years ago we were persuaded to consult an IFA who turned out not to be very good and we ended up on a short term fixed rate which shot up at the end of the term so we were paying horrendous interest. The lightbulb moment finally came about 3 years ago when we had £20k left, shopped around and moved to ING. Since then we have been overpaying as much as possible, and saving as well. A month ago we reached a point where the savings outweighed the mortgage so we did it. Feels great.

I would like to pass on several bits of advice which worked for us. All are small but the cumulative effect is amazing.

1. Overpay as much as you possibly can, but leave room to save a bit so you can have the pleasure of settling early.

2. Get a mortgage pig and ask it's permission before you spend on unecessary things. Feels a bit daft at first but focuses the mind. We had a big blue one and every Saturday we asked his permission to have a takeaway or go out for a meal. Sometimes he said yes, but mostly he made us think again!.

3. Be a cheapskate. I know it's old-fashioned, but I do believe that if you look after the pennies the pounds will look after themselves.

4. Do you really NEED to update your car/phone/TV/stereo/furniture or are you just following fashion?

5. Only use credit for things you actually can't live without, never for holidays or luxuries.

I could go on but I'd just be boring and smug.

happilass

Hi jennyjelly,
a very inspiring and motivating post. Well done to you both, you're advice/tips are great, thanks for sharing them.
Happi

UncleBuck

a. The date you decided to become a MFW
It was a strategy from the start, after training as a 'bean counter' and auditing building societies, you realise just how much money is being consumed by paying interest.

b. Mortgage Debt at its highest
On moving to our 2nd home in April 2003, £135k

c. Mortgage-Free Date
'Technically' 24/09/09, I say 'Technically' because our current 'offset' mortgate rate is 1% (.5% above base) and we have our savings earning far greater amounts of interest, even after tax!. Once the balance swings back to normal rates of interest, we'll look at paying off the mortgage for real.

d. Your one perl of wisdom.
Gosh there are sooo many pearls but you would stop reading the post!. Basically read everything on MSE on a regular basis, never assume that you always know best or have the best deal, keep control of your spending (I use MS money for the budget and a spreadsheet to track the mortgage\savings strategy)

e. And if you had a mortgage freedom diary on MFW, a link to it.
Sorry no diary BUT I have months of spreadsheets to review my journey, one day in the future


Good luck to everyone aiming for the same goal and thanks for reading this post :T

Take Care UB

co123456

The date you decided to become a MFW

Stumbled upon Rene Carayol’s Pay Off Your Mortgage In Two Years series on BBC2 in January 2006. As the breadwinner, I thought that removing all of our debts would provide a great safety net. Took us a little longer than two years,

Mortgage Debt at its highest

95K in August 2002 (3.5 times our combined wages)

Mortgage-Free Date

1st October 2009

Your one pearl of wisdom.

A journey of a thousand miles starts with a single push. Break your challenges into small managable pieces to make them easier to swallow.

And if you had a mortgage freedom diary on MFW, a link to it.

No diary. Joined the Mortgage Free Wanabee 2009 thread when I realized that this particular little target was a possibility.

RosieTiger

Cheery, many congratulations, enjoy that bottle of wine !

mathsmum

a. The date you decided to become a MFW
When we bought this house - 1992

b. Mortgage Debt at its highest
80 000

c. Mortgage-Free Date
We paid off the residue when the tax-free mortgage allowance was abolished

d. Your one perl of wisdom.
Soo much easier to just up the monthly payment - then you can't get your hands on the money and dither

BTW - what do you say to cold callers who ask if you are a tenant or a mortgagee 'i - own - the - house - outright' seems to need to be said v-e-r-y s-l-o-w-l-y to get through

Law_bean

I wanted to shout from the rooftops when I became mortgage-free. I didn't, and am posting here purely with the hope of inspiring others and perhaps re-inspiring those that are flagging. The feeling of freedom is brilliant.

a. The date you decided to become a MFW
June 2002, after a 2 year long acrimonious divorce got finalised, all the while watching house prices rise and rise, and thinking that, with ongoing maintenance payments, I'll never be able to afford to buy the sort of house I wanted.

b. Mortgage Debt at its highest
£113k

c. Mortgage-Free Date
June 2008, after 6 years, aged 42.

d. Your one pearl of wisdom.
I've got a few...

1. Offset mortgage - I swear by mine. There were cheaper fixed term deals available at the time, but the offset facility is brilliant - every single penny sitting around in your current account is working for you to reduce the interest cost. The benefit is even greater when you're a high-rate tax payer given that you save the 40% tax that would be due on any savings income.

2. Stoozing 0% credit cards - I latched on to this and used an Egg credit card to transfer funds into my current account. I then transferred this balance onto another credit card and started again with a second Egg transfer to a third credit card, etc. At one point I had £40k offsetting my mortgage, saving me thousands. But transfer fees put a stop to this now.

3. Living frugally - I drove around in an small older second-hand car for years. Younger and less senior colleagues would turn up to work in brand new cars and I'd feel a little embarrassed. But looking back from a mortgage-free standpoint, I now feel vindicated and proud. As it happens, I also don't drink that much alcohol, I don't smoke, buy expensive clothes or go on expensive holidays. I cancelled the daily newspaper, used the library more, made my own sandwiches for work etc. Small things, but they add up.

4. Budgeting and recording expenditure - I also swear by Microsoft Money, using it to capture all my income and expenditure on a monthly basis. There are other products out there (some are free), but the point is that you (obsessively!) record your expenditure and try to keep it below a fixed level month after month, year after year. Clearly some expenditure occurs, or can be made to occur, monthly (e.g. council tax, water, electricity, gas). Other expenditure is annual or "lumpy" (e.g. MOT, insurance, TV licence, AA membership). I set up Microsoft Money to "accrue", or set aside, one-twelth of the anticipated annual costs as an expense in each of the preceding 12 months. That way, 80-90% of outgoings were fixed each month, with only unpredictable costs (like boiler or car repairs) having to be managed when they crop up. I had a set maximum expenditure to hit each month, and knew that the further I was below that target, the more of the mortgage was paid off. Some months I missed, but that spurred me on to make up for it the following month to keep the average OK.

5. Bonuses and pay awards - I was fortunate that I did get the odd bonus and pay rise. But virtually all of these "windfalls" went against the mortgage.

And what now?

Once I had paid off the mortgage, I decided to keep it "live" by leaving £2k owing, but with £2k in an offsetting savings pot, eliminating all interest. I viewed it as a kind of insurance should I fall ill or suddenly needed some funds - the mortgage facility allowed re-borrowing.

I am glad I did this as I can now borrow at 1.25% (Base rate + 0.75% margin) and invest in savings products paying 3.25% (Citi and ING). I expect to be a Basic Rate tax payer this year, so the savings accounts will pay 2.6% net of tax. Consequently, I am now borrowing £100,000 from my mortgage bank to lend £50k each to two other banks, generating a £100 profit each month on the interest differential, risk free after tax. If interest rates rise, I will simply withdraw the savings and pay back the mortgage until something equivalent presents itself.

The feeling of being mortgage free and being able to say "stuff your job" is incredible. I've continued to live frugally over the last 15 months or so and have built up some savings. I have now decided to take the next step and have handed in my notice to start a career break, aged 43. Knowing exactly how much I need each month to live means that I know that I can survive 12-15 months before I need to seek employment again. Even then I have the ability to draw against my mortgage facility to stretch that out further if necessary.

I shall, hopefully, enjoy the even greater feeling of freedom that comes from doing lots of walking, cycling, gardening etc depending on what mood and the weather brings each morning. That's what saving hard, living frugally and being mortgage-free has meant for me.

And when I return to work, I will look for part-time work so that I can retain that better work-life balance over the second half of my working life.

Finally, I think someone earlier summed it up best - a monthly mortgage payment is not like council tax, which is paid every month, for ever, regardless - if you pay more, you save money! That may seem counter intuitive, but it is true!

cruickville

We did it on Feb 2009 1 month before 2nd child born and I was just about to start mat leave. Hopefully this means I don't have to go back to work until they are settled at school and i can change career. I am/was an evil mortgage advisor with a bank (I did sell with a conscious and didn't lie though). Must admit i did work hard for last 2 years to earn as much bonus as I could to pay off mortgage.


The date you decided to become a MFW

a. August 2001

b. Mortgage Debt at its highest

£95,000

c. Mortgage-Free Date

Feb 2009

d. Your one perl of wisdom.

Be obsessive, reduce your term, find a way round the t&c's, put any bonus straight into your mortgage, keep doing budget planners and review your monthly spending on credit cards. Keep reviewing your spreadsheets and obsess some more. I will 35 in a couple of days and it feels great to be able to probably jack in my job, raise my kids and train for a better more rewarding career. As someone said before don't buy stuff you don't need. Good Luck!

george_jetson

Law_bean wrote: »

The feeling of being mortgage free and being able to say "stuff your job" is incredible.

It really is. i've been mf for almost a year now and it is that feeling of freedom that is the best thing about it. OK I haven't taken a career break or even dropped my hours, but the knowledge that I could do so if I so wished is incredibly liberating. I'm at work because I want to be not because I have to be and that knowledge makes a world of difference.

Law_bean wrote: »

I shall, hopefully, enjoy the even greater feeling of freedom that comes from doing lots of walking, cycling, gardening etc depending on what mood and the weather brings each morning. That's what saving hard, living frugally and being mortgage-free has meant for me.

Agreed again, it's not about trinkets or a new car it's about enjoying life - for me it's travel and nights out. The pleasure of a new toy will fade with time, the feeling of freedom that comes with being mf I don't think ever will…

Thank you for an excellent post!