I want to be mortgage free

doodle_bug

As of today I owe the Nationwide £47450 but I now have more than that in savings, not actually touched any of my redundancy money yet and should have a nice interest payment at the end of march.

On the paper statement I noticed that I'm actually tied in until the 30th June so all being well soon after that date I'll be mortgage free.

New job is taking a bit of adjusting to but it could work out pretty well, watch this space.

Good luck to you all in your quest to be MF

setmefree2

DB,

Glad everything has turned out so well for you - Mortgage Free, you lucky thing. As you can see from my sig we have a way to go yet...

All The Best

SMF2

doodle_bug

Now down to about £45,700.
I've had a change of mind though, I might not pay off my mortgage after the tracker deal ends in June. I've taken out a fixed rate ISA with the Nationwide today fixed for a year at 6.15%, you can fix for 2 years and there are some other banks giving better fixed rates but I'm happy with the Nationwide. Put £6,000 in 2 ISA's and will put another £7,200 ( budget just upped the amount you can put in) in April. I think interest rates aren't going to go up this year and should come down, at the moment you can get a 5 year fixed mortgage with the Nationwide at 5.63% with no fees for existing customers. I might not be able to pay off my mortgage in full in June by taking out these ISA's but I'll be up on the deal as long as the rates don't go up. I'll probably have to get another mortgage for about £10,000 but I can still make over payments of £500/month. There are quite a few permutations going on in my head whilst writing this, I could re-mortgage say £20,000 on a 10 year repayment and make over payments, in April 2009 I could then draw down on the over payments to put the money in another ISA if it is worth doing at that time. I have 3 mortgage a/c's on the go now and making over payments of £1,500/month, I'll have to keep 3 a/c's on the go to give me the flexibility of being able to make up to £1,500 over payments.
I was adamant about clearing my mortgage asap towards the end of last year but off setting against a higher earning ISA seems to make more sense, anyone see any downsides to what I'm thinking of doing?

doodle_bug

4/4/2008 £43900

doodle_bug

down to £42,100

Tie in ends in June, I'm going to leave upto about £10,000 still on the mortgage, I want the flexibility to draw down on my overpayments because my daughter might want to borrow a deposit for a house. I'm not going to re-mortgage in any deal just pay Nationwide's BMR it is 6.49% at the moment and I'm getting 6.15% on my ISA. It would be an error to use the ISA to pay off the mortgage, I would be losing out future years tax free allowance by doing that and the BMR could get lower anyway.

Still want to be mortgage free and can still make sizeable overpayments easily due to the actual reduction in my monthly mortgage payments, MF by the end of the year? maybe.

doodle_bug

Now down to £11,000.

I think the actual mortgage payment will be around £100/month and I was paying £500/month ish. I could make overpayments of at least £400 without even noticing. I'm very undecided about going totally mortgage free, by keeping the mortgage going I have the option to draw back down on my overpayments. If I got the mortgage down to £3000 the difference in interest between my ISA and mortgage interest would be next to nothing. I'm sticking on the Nationwides BMR 6.49% at the moment.

setmefree2

Wow :eek: Well done you. :j:jHow did you do that?:money:

doodle_bug

I was tied in with Nationwide until the end of this month, had my savings and redundancy money but would have incurred penalties if I'd payed it off earlier, I wasn't losing , my mortgage rate was 5.34% until the end of this month and getting 6.15% in an ISA. Will now go on the 6.49% BMR. the loss is minimal, not worth me trying to get a deal.
Thanks for your interest.

Old_No.7

Hi Doodle-bug, this is a very inspiring story! Not sure why you don't pay off your mortgage in full though? If you can overpay £1,500 a month, then surely once the mortgage is cleared, you can put all that into an ISA (until full, which only takes 2 montsh: after that you'll have to find another savings account). Your savings will grow tremendously fast, and you can lend your daughter your own money when she needs it at no interest (or an interest rate you feel is fair). Cut out the banks all together if you can, I'd say: especially with this ridiculous arrangement fees they are coming up with at the moment. That's a nice saving in itself.

doodle_bug

Old_No.7 wrote: »

Hi Doodle-bug, this is a very inspiring story! Not sure why you don't pay off your mortgage in full though? If you can overpay £1,500 a month, then surely once the mortgage is cleared, you can put all that into an ISA (until full, which only takes 2 montsh: after that you'll have to find another savings account). Your savings will grow tremendously fast, and you can lend your daughter your own money when she needs it at no interest (or an interest rate you feel is fair). Cut out the banks all together if you can, I'd say: especially with this ridiculous arrangement fees they are coming up with at the moment. That's a nice saving in itself.

My daughter has had an offer accepted on a house and she will need about £5,000 from me, she's had about £7000 already this year for her wedding. The more money you get the more ways it seems to find to slip through your fingers.
I could put £7,200 (joint allowance) in a cash ISA this year, I would be down £24 for the year but that £7200 will accrue interest over many years. It is something I didn't get at first, I thought you'll only got the tax free each year on £3000 but if you have been saving for 10 years you would be getting tax free interest on £30,000+ whatever interest it has gained.
Staying on the Nationwide BMR gives me maximum flexibility, no tie ins and no fees to pay, whatever I have left after using my ISA allowance will go to pay it off. As I said I'm tempted to leave a debt of about £3,000 to give me the option of drawing back down on the overpayments and not incurring any set up or valuation fees.

I had the idea to be MF early last year and set myself a goal of 3 years. It is very odd how things have turned out, inexplicable really, it's like some kind of hidden power was generated by my concentrating on how to get MF. Wonder if anyone else has had a similar experience. Last year my wife and I both got made redundant after many years in our jobs between us we got £37,000 payoff. Some people might have looked at that money as a new car, nice holiday, new stuff in the house but I was focused all the time on it being to pay off the mortgage.
2 weeks into my new job a van crashed into the back of my car and I've had bad whiplash, whatever compensation money I get is going to get blown, watch this space.

All the best and good luck.