Mortgage Free - step 1

Pmc2k24

Hey,

Been reading this forum for a while and thought I would start up my mortgage free diary! My old house is now being rented out due to me being moved to a different location..

Situation (will be updated with more specifics such as rate and fix dates when im back home :cool:)

House value
£220,000

Mortgage outstanding -
£111,139.88 - Santander (paid DD via 123 account)

Monthly payment
£640.8 - ring fenced from my salary rather than the rent

Rent
£808

Max repayment/yr - 10%

Overpayments so far this year
£5500 - Jun

Max overpayment remaining
£6332.78

Savings
£4000 @ 4% with Club Lloyds - to be used on the mortgage in the near future

Other debts
Parents (yup..) - £8100 .. but don't seem desperate to have the money back any time soon, as long as it is repaid

Student loan - Paid off Jun 15 - £309/month back in pocket

Dream -
Pay off 10% / year
Save anything left from the rent (after tax)
Pay large lump sum in 2017/2018 when fix ends - mix of savings from the rent and any extra from salary
MF in 5-8 years depending on other events

First goals -
Pay remainder of 10% allowance this year - £6332.78
Pay 20% of parents debt - £1620

Total
£7592.78

Minus savings
£3952.78 / 4 = £988.2 / month

Cheers!

enjoyyourshoes

could you increase monthly mtg to max overpayment by DD, then get used to that going out and accounting for it like all other commitments, then forget about it ?


Then any savings could be used to throw at mtge when the trade off between ERP and accrued interest becomes in your favour ? (once mum and dad are cleared)

Pmc2k24

I spoke to Santander about a regular overpayment to the maximum I could and they informed me that they would have to reassess my financial situation to ensure I could afford it.

The adviser therefore advised that I make payments over the phone each month instead (although I could have sworn I was told something different in the past).

So as soon as my mortgage goes out, on the same day, I will start making overpayments. Its not ideal as it would be a lot better to forget about it as you say, but, I think keeping a log on here will help the motivation!

That system will likely start Jan next year as my 10% repayments reset 31 Dec. The other thing I had a go at recently was funding circle, which could come in handy for savings, albeit with the associated risk.

Fancynancy77

Hi

Your situation is similar to mine in that I am paying off a mortgage on my old home and now rent somewhere else.
Our mortgage amounts are fairly similar too but mine is in Euros.

I'll be subscribing to your thread (this is something I just figured out how to do today)

good luck :money:

Floxxie

Wouldn't you be better not to overpay the mortgage as the more you pay off, the less interest you have to offset against the rental payments?

Pmc2k24

Hi guys!

Thanks for the advice and Fancynancy - good to have someone at a similar stage!

In terms of the mortgage and interest - that was the original plan however with the new budget changes and tax impact I decided I would rather just pay it off seeing as paying a bank interest will now cost me money!

Long way to go but first steps already done