slow march to freedom

Greetings all,

I took out a mortgage in 2012 for £156000 on a £186000 home. We had £20000 in debt at that time and have since reduced it to £5000. The mortgage is fixed at 5% and has two years left to run, early redemption fees of 7% mean there's not much point in leading early. The consumer debt is at 0% till December when we can either pay it off or do a balance transfer.

We have an emergency fund of around £8000.

Short term I want to get the LTV down to 60% so that when we remortgage in 2 years we can access the best deals. I hope to then clear the mortgage within 5 years of remortgaging, ideally 2!

Monthly repayments are £914 and we op by £500/ month. We also save £500/month into a share save scheme which will make in 2.5 years. This is too late for the remortgage but we should achieve the LTV rage without too much drama given local price rises.

Threats to this plan are:
Interest rates
Child care- 8 month old baby and starting nursery full time
Share save scheme might not give us the return we hope for
New car is on the horizon and will be expensive
Interest rates may go up before we remortgage but given the aggressive pay off shouldn't matter too much.

Hoping to get some ideas here and have some accountability to keep on track.

Cheers.
MM

Replies

  • LuckyinlifeLuckyinlife Forumite
    1.6K Posts
    Forumite
    Sounds great your doing all the right stuff good luck

    To pay off that amount in such a short time would be amazing
    Mortgage--- [STRIKE]£67700 March 15[/STRIKE] [STRIKE]£65221 April 15[/STRIKE] [STRIKE]£64983 July 15[/STRIKE] [STRIKE]£64780 sept 15[/STRIKE] Remortgage [STRIKE]£67295 oct 15[/STRIKE] [STRIKE]£66599 Nov 15[/STRIKE] [STRIKE]£65878.73 Dec 15[/STRIKE][STRIKE] £64834 1st Jan 16[/STRIKE] [STRIKE]Feb 16 £64,511.89[/STRIKE][STRIKE] March 16 £64,056.40[/STRIKE] [STRIKE]April 16 £62550[/STRIKE] [STRIKE]May 16 £62,396.20[/STRIKE] Feb 17 £60.800
    Emergency fund 23k
  • So I did some maths yesterday and found that we're currently £300 short in monthly payments to hit the 7 year goal and £600 to hit the 5 year goal, not good news!

    Part of this short coming should be made up with the shares that are bought at a 25% discount. This means if they stay at there current value we will be up £6000 on them over three years or £125 /month. That still leaves me £175/ month short of the magic number. My student loan gets paid off in twelve months and that will save £212/ month which would close the gap nicely but leave us a few thousand down on the goal, again hopefully we can get a cheaper deal on the remortgage to make 7 years a possibility.

    One other way we could hope to make the faster goal is through frugality but with approx 60% of our income going towards paying off the mortgage I think this will be a big ask.

    The other hope is for my wife to get pay rises which could be used to increase our savings rate. My pay is decent right now but has hit a ceiling. I'm a teacher and the only way to get higher pay is to move to senior management and that holds no interest as I value having a life!
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