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Mortgage Free by 40
quantic
Posts: 1,024 Forumite
Just wanted to run my little mortgage free plan by the forum and basically see what everyone thinks. Please feel free to point out any downsides or oversights or if you have a better suggestion I would love to hear it.
Our property is currently worth £190,000 and we owe £123,000 with 21.5 years remaining, our initial term is fixed at 3 years. We are 6 months into it, so 2.5 remaining before we can change deals - at the end of the 3 years we will owe £113,000.
We are saving up at a rate of around £1400 per month with a running total of £15,000 so far. We plan to keep saving until the initial 2.5 years is up and with an aim to have around £45,000/£55,000 saved by then (including current £15,000).
We will then use this to pay a chunk off the mortgage, bringing the mortgage down to between £68,000 (worst case) and £58,000 (best case.)
We then plan to get a fixed deal for 7 years to pay off the remaining total, which will cost around £750 per month, meaning our mortgage is paid off a couple months before my 40th birthday.
Our property is currently worth £190,000 and we owe £123,000 with 21.5 years remaining, our initial term is fixed at 3 years. We are 6 months into it, so 2.5 remaining before we can change deals - at the end of the 3 years we will owe £113,000.
We are saving up at a rate of around £1400 per month with a running total of £15,000 so far. We plan to keep saving until the initial 2.5 years is up and with an aim to have around £45,000/£55,000 saved by then (including current £15,000).
We will then use this to pay a chunk off the mortgage, bringing the mortgage down to between £68,000 (worst case) and £58,000 (best case.)
We then plan to get a fixed deal for 7 years to pay off the remaining total, which will cost around £750 per month, meaning our mortgage is paid off a couple months before my 40th birthday.
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Comments
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Sounds like a plan. Go for it!0
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It sounds like a good plan.
What is your current mortgage rate and what are the associated ERCs to pay it back?
Just thinking there may be an outside chance you could reduce your interest rate by adding your current savings to your equity and dropping under 60% LTV.Thinking critically since 1996....0 -
We currently pay 2.7%, (LTV of 68%) our £15k would indeed bring us below the 60% but we are in a fixed deal for the next 2.5 years so doesn't really help us out until then.0
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Do you know how much it costs to buy yourself out? (known as an early repayment charge or ERC). It could make sense to do it if overall you could get a better rate than 2.7%.
It sounds like you already have a very competitive rate so perhaps not but worth crunching the numbers just in case.Thinking critically since 1996....0 -
Yeah, I will definitely have a look into it - its quite annoying, when we took out the mortgage it was the absolute best deal going by a mile. No fee's either. Now we could get below 2% easily. Had I known at the time how much we were going to be able to save, i'd have just gone for a fixed 10 year!
Our new house is much closer to work so we have been saving a fortune on travel.0 -
Yeah, I will definitely have a look into it - its quite annoying, when we took out the mortgage it was the absolute best deal going by a mile. No fee's either. Now we could get below 2% easily. Had I known at the time how much we were going to be able to save, i'd have just gone for a fixed 10 year!
Our new house is much closer to work so we have been saving a fortune on travel.
Tell me about it!!! :cool:Thinking critically since 1996....0 -
Old post I know but I'm a new joiner researching!
It's pleasing to see like minded people with a plan to free the burden, stick to it and its a no brainer for success in reducing the bain...0
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