Forever Home Fund

katep23

December 2014
Mortgage £346,545.00
Mortgage free date 2044
LTV 86.64%

2nd February 2019
Mortgage £305,561.51
Capital paid off capital last month: £1,394.10
Total paid off capital: £41,033.49

LTV: 67.9%

katep23

We have reduced the capital by over £40k in just over 4 years which is a nice milestone and even better when I think that for the first 3 years our interest rate was 4.44% and of our £1,700 payment, almost £1,200 was interest.

Feels so much better being on 2.59% and each month we are paying over £1,300 off the capital. It's 1 year since we remortgaged and even taking into account the ERC we have made real headway into the mortgage.

OH has agreed we can make an OP to get under £300k at the start of June - sounds silly but it will be a huge boost to reach that by my birthday. Can't wait for the mortgage to start with £299!

Then the next milestone will be reduced the capital by £50K which will be before the end of the year.

Would really love to have the mortgage paid off by the end of the 10 year fix (so February 2028) but would need to OP another £1,150 to do this. That's not happening at the moment but is something to aim for.

With our current OPs I think we will still have around £100k when our fix ends which we should be able to pay off within 5 years so by the time we're 56 ish.

My ultimate goal is to retire or at least reduce working by the time I turn 55 - I should have a decent fund in my DB pension by then but don't want to take it until state pension age so need to fund the gap between 55 and 67 (currently).

I do have three DC pensions but don't think there will be enough in there as it stands so need to pay off mortgage and put enough aside to fund the gap between DC pots and what I will need to live on for 12 years.

Hmmm, all food for thought and need to ensure we find the right balance of OPing the mortgage and saving for retirement.

LeighofMar

Hmmm, all food for thought and need to ensure we find the right balance of OPing the mortgage and saving for retirement.

You're doing great! But that pesky retirement is always in the back our minds, isnt it? We are woefully behind on that end but decided that being MF would be an essential part of our retirement. And we are self employed so at least we are more or less in control of how much we make and can contribute. But boy, it's a lot of juggling.

Tropically

Wow, well done! 40k off the capital is excellent.

katep23

That's exactly it Leigh, a balancing act and being mortgage free is part of the bigger picture and overall strategy.

Tropically, I'm a way behind you looking at your signature but so pleased to be hitting some decent milestones now.

Need to get in touch with TSB and find out how to make an OP - tried to log in to internet banking but don't seem able to. Can log in on app but no option to transfer from my TSB current account to the mortgage and no account / sort code to do a transfer from my main current account.

shangaijimmy

We're the same plans but figures are smaller. I hope we can be done in 5 yrs (end of our imminently starting fix), but think its more realistically 6 yrs. That then gives me 10yrs of throwing money at pre retirement funds, so that i can reduce to part time at 55 and have cash to make up a wage to delay pension draw down for a further 13 yrs!

Balancing act it certainly is!

AnotherJoe

shangaijimmy wrote: »

We're the same plans but figures are smaller. I hope we can be done in 5 yrs (end of our imminently starting fix), but think its more realistically 6 yrs. That then gives me 10yrs of throwing money at pre retirement funds, so that i can reduce to part time at 55 and have cash to make up a wage to delay pension draw down for a further 13 yrs!

Balancing act it certainly is!

You'd be much better off doing it the other way round.
That way your Pre retirement funds get an extra 5 years to grow, inflation whittles your mortgage down with no effort on your part, and if you are saving into a pension you get the extra tax relief with an extra 5 years for it to grow.

gallygirl

AnotherJoe wrote: »

You'd be much better off doing it the other way round.
That way your Pre retirement funds get an extra 5 years to grow, inflation whittles your mortgage down with no effort on your part, and if you are saving into a pension you get the extra tax relief with an extra 5 years for it to grow.

Seconded SJ. Financially it does make the most sense. Though I appreciate that's not the only thing to be considered.

katep23

Another Joe, for me it's about getting the mix right. I've got a DC pension from my old employer which is frozen, a DC pension I started at 20 which I still pay £50 a month into (never increased it!) plus my current DB CARE scheme.

I think I'll get a 2% pay increase this year and plan to sacrifice this as AVCs, have worked out how much to sacrifice for the same take home now and it adds over £1,200 per year to my pension if I pay it in for next 13 years. My plan is to increase the AVCs at a later date but need to get details of OH's pensions to work out where any additional pension contributions can best be utilised.

But for me it's really important to OP the mortgage in parallel. Having paid 4.44% for our first mortgage and seen how much of our payment was interest (over £40 a day at the start!), and remembering the eye watering interest rates of the 80s, I want to protect us from that, hence the reason we took a 10 year fix.

ETA - my OH always says that for me everything has to be "perfect 10" so I try and optimise everything. With this dilemma I have come to the conclusion that doing something imperfect is better than doing nothing and I am hedging my bets with OPing and contributing more to our retirement fund.

katep23

December 2014
Mortgage £346,545.00
Mortgage free date 2044
LTV 86.64%

2nd March 2019
Mortgage: £304,229.26
Capital paid off capital last month: £1,332.25
Total paid off capital: £42,365.74

LTV: 67.61%