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Hope is not an Effective Financial Strategy

edited 3 March at 8:18PM in Mortgage-Free Wannabe
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shangaijimmyshangaijimmy Forumite
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edited 3 March at 8:18PM in Mortgage-Free Wannabe
Hi all - Thanks for popping in and helping me to stay motivated.

This is the 6th version of the opening post (Jan 2020 - 58 months into this diary/challenge), but is reflective of where we are currently at. Lots has changed since starting this MF journey, not least adding a 3rd child to our household!

Initially this was to be a 120 payment challenge and as we made rapid progress through scrutinising every little element of our finances I became optimistic of sneaking under 100 payments. However after our 3rd remortgage since the start of the diary challenge (5yr fix at 1.99% in Feb 2019), I switched focus towards accelerating our pre-retirement and pension provisions and we're now aiming for 150 payments but with a significant uplift in our longer term financial well-being.

Whilst this post details my current goals it seems a shame to ignore previous achievements, so I've summarised them below:

Achievements - 60 payments
  • Balance - £75,488.93
  • Diary Reduction Total - £60,511.78
  • Cumulative Overpayments - £32,523.26

Targets for 2020
  • Closing Balance - £68,500
  • Net Reduction - £1,215.87 // £8,000
  • Overpayments - £412.74 // £2,000
  • Savings - £2,466.99 // £24,000
  • Declutter at least 1 item everyday - 63 // 366
MFW: Was: £136,000.......Now: £73,674.67......Reduction: £62,326.42... in 5yrs 4mths!
Mortgage Neutral Target - Feb 2025...£66,409.77 remaining
MFiT-T5 #8 - £10,313 of £23,100 (44.65%)
«134567382

Replies

  • lippy1923lippy1923 Forumite
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    Good Luck :)

    You have a similar goal to me. Pay off in 10 years. I still have 20 years remaining on my mortgage at present, so to half it would be amazing. This can only be achieved if we stay in our current home and not upsize though. I'm still not sure if I want to stay in our house that long, but the idea of paying it all off early and being MF is making me think otherwise.

    Will be watching this thread with interest to see how you get along. Have you got ideas on how you are going to save the money to overpay?

    Lippy
    Total Mortgage OP £61,000
    Outstanding Mortgage £33,044
    Emergency Fund £30,650
    Mortgage Neutral Target <<Dec-20>> £2,394 to go

  • shangaijimmyshangaijimmy Forumite
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    Hi lippy.
    We too have exactly 20 years remaining!
    My initial thoughts are to allocate 1/3 of income to the mortgage initially. I'll list our finances soon but with our current mortgage deal that equates to a £423 overpayment. To make 8 years I think we need to find an extra £100 or so a month which I hope to get through savings interests, under spends on food and petrol, eBay and any other creative means.

    Obviously the whole plan will change throughout the years go take into consideration wage increases, more children etc... I can't mentally think of big timescales so it'll very much driven in cycles of 2 and 3 years. More of which will follow!!
    MFW: Was: £136,000.......Now: £73,674.67......Reduction: £62,326.42... in 5yrs 4mths!
    Mortgage Neutral Target - Feb 2025...£66,409.77 remaining
    MFiT-T5 #8 - £10,313 of £23,100 (44.65%)
  • ourcornercottageourcornercottage Forumite
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    Hellllloooo! Same goals, 400 OP per month and pay off in 10 years max! Good luck!
    target under 89k by end of 2018 & under 75k by end of 2019
  • Maybe_its_becauseMaybe_its_because Forumite
    412 posts
    Eighth Anniversary 100 Posts Combo Breaker
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    Hi,

    Great to see you've got your diary up and running. Glad your remortgage has been done and you can start getting your teeth into the MFW challenge.

    Following your diary with interest as we're similar timescales (22yrs -->10 yrs)

    MIB
    MFW2020 #5 £1,008/2,000 Aim for MF-in-10 from 2015
    Sep'12 £233,750 Jan'15 £222,329 Jul’20 £149,895
    MFiT T4 #24 £48k/£34k
    MFiT T5 #24 £11,105/£41k
    £13,428 in 2012 Debt Free day 30th April 2014
  • shangaijimmyshangaijimmy Forumite
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    Ok i said i'd post details about current mortgage so here goes (trying to keep things short and figures/stats driven)!
    • House Value £225000
    • 4 Bed Detached - Is our family home and intended to be so until we downsize ain approx 25 years
    • Mortgage originally £163000 over 30years in June 2006
    • Remortgaged for £136000 over 20 years, so knocking a year or so off the original term
    • First Direct 1.99% for 2 years, monthly payment of £687
    • Intention is to allocate 1/3 of income to the mortgage so total payment of £1110 per month
    1. After the 2 year fix ends i'd like us to be at £115000 minimum
    2. Our intended overpayemnt will do this
    3. We'll then throw any extra's we can such as food and petrol underspends, months with no council tax etc...
    4. So secretly hoping for £113000!
    MFW: Was: £136,000.......Now: £73,674.67......Reduction: £62,326.42... in 5yrs 4mths!
    Mortgage Neutral Target - Feb 2025...£66,409.77 remaining
    MFiT-T5 #8 - £10,313 of £23,100 (44.65%)
  • shangaijimmyshangaijimmy Forumite
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    We have some savings squirreled away in current accounts that any interest will be thrown at mortgage, so in the 8 days we've been on new mortgage we've actually overpaid £19!!

    I'll detail more about savings, outgoings, past mortgage product and distance travelled in subserquent posts. My intention is to be brief remember!!

    Good luck everyone, keep inspiring the next mob of MSE's!
    MFW: Was: £136,000.......Now: £73,674.67......Reduction: £62,326.42... in 5yrs 4mths!
    Mortgage Neutral Target - Feb 2025...£66,409.77 remaining
    MFiT-T5 #8 - £10,313 of £23,100 (44.65%)
  • shangaijimmyshangaijimmy Forumite
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    Quick post to give some details about the SJ family before I move onto savings and statement of affairs.

    We are a family of 4 plus 1 bionic fish that seems to have lived forever, and a miniature schnauzer puppy called Vinnie. I am 36, Mrs SJ is 34 and our 2 boys are 6 and 2. We both work full time including evenings and weekends for me so our lives are pretty hectic. Mrs SJ is from a family of 5 and she is number 3 child so inevitably the pressure is on!!

    Which leads nicely onto why a 2 yr fix when we could have got slightly better with a tracker. Well the reason is plans are afoot for number 3, so the 2 yr fix gives us a bit of security to plan for maternity leave should we need it. And overall our overpayments more than make up for this anyway.

    So that's us, and it's my day off today so I'm off to play group with the youngest before dumping him at nanny's so I can finish decorating his room!! Then at some stage a snooze is definitely on the cards!
    MFW: Was: £136,000.......Now: £73,674.67......Reduction: £62,326.42... in 5yrs 4mths!
    Mortgage Neutral Target - Feb 2025...£66,409.77 remaining
    MFiT-T5 #8 - £10,313 of £23,100 (44.65%)
  • shangaijimmyshangaijimmy Forumite
    3.5K posts
    Part of the Furniture 1,000 Posts
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    Hellllloooo! Same goals, 400 OP per month and pay off in 10 years max! Good luck!

    Same goals and similar mortgage amounts too! What mortgage deal are you on as it'll be interesting to see the impact of our overpayments with different products.
    MFW: Was: £136,000.......Now: £73,674.67......Reduction: £62,326.42... in 5yrs 4mths!
    Mortgage Neutral Target - Feb 2025...£66,409.77 remaining
    MFiT-T5 #8 - £10,313 of £23,100 (44.65%)
  • ourcornercottageourcornercottage Forumite
    1.5K posts
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    Same goals and similar mortgage amounts too! What mortgage deal are you on as it'll be interesting to see the impact of our overpayments with different products.

    I have mortgage in 2 parts with HSBC tracker I cant quite remember the rates now but the higher part is 2.64 I think.

    I actually need to contact HSBC to see if the newer products better this. You have prompted me!
    target under 89k by end of 2018 & under 75k by end of 2019
  • edited 19 March 2015 at 5:30PM
    shangaijimmyshangaijimmy Forumite
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    edited 19 March 2015 at 5:30PM
    Ok, so I've already mentioned about my standard £423 overpayment which will see us finished in approx 11 years (obviously interest rates will have a major bearing on this), but for us to sneak it to 10 we need to find an extra £100 per month :eek:

    I have a plan developing but still think I'll come up short. I'm trying to view it as a yearly £1200 rather than a monthly thing but here goes:
    - 2 months of no council tax at £173 per month, so £ 346.
    - we have 3 Halifax rewards account to smash and grab the £5, so £180.
    - we have savings in nationwide and tsb current accounts which I plan to put all interest against mortgage, which will be approx £20 per month, so £240.
    - from sweeping current account every Sunday to round it down I think I'll about £10 per month so £120
    - from putting change away I reckon I can find £60 per year.

    So overall £946, without too much trouble.

    Any ideas on the other £250 per year or, £20 per month?
    MFW: Was: £136,000.......Now: £73,674.67......Reduction: £62,326.42... in 5yrs 4mths!
    Mortgage Neutral Target - Feb 2025...£66,409.77 remaining
    MFiT-T5 #8 - £10,313 of £23,100 (44.65%)
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