the time has come...to get the mortgage below £200k

thewalrussaid

Hello all on the MFW board!

It is a bit scary to start a diary so do bear with me if I start rambling. I have been a long term lurker on this forum and this board in particular for years. I have been inspired by everyone but especially Gally Girl, Tilly, GreenT, HelenDaveKids & Edinburgher, in fact it was Edinburgher and Pennyforthepot who introduced me to the idea of FIRE and MMM’s blog. Reading MMM and other blogs focussing on FI really opened my mind to possibilities I hadn’t previously considered. I suppose in a way it distracted me because previously I had thought that to pay off the mortgage was the sole goal. The thought of FI widened my horizons and got me thinking about other long term investments. Anyway I won’t bore on for too long but suffice to say that it gave me a massive amount of food for thought.

Some brief details, DH and I purchased our home two years ago with a £270k mortgage this currently stands at £245,990.00. The original mortgage period was 20 years and is now 18 (which is kinda stating the obvious but just confirming). The rate for the first two years was 2.74% and we have just opted for a Halifax retention product and fixed for 2 years at 1.69%.

Why do we want to be mortgage free? Well maybe that should be why do I want to be mortgage free? Not that DH isn’t on board, he is, but more in the sense the he doesn’t really spend too much anyway and is quite happy for me to get on with it. I suppose the driving factors are time and peace of mind, whilst I am not long out of my twenties DH is somewhat older, and while people are living and working for longer I think it is better to get rid of the mortgage as early possible as opposed to assuming that he will continue to earn his current salary for the next 18 years! The positive flip side is that hopefully my earnings will increase over time but I don’t want to rely on that – hence we have limited time to get rid of this mortgage.

Peace of mind is the other factor because shortly after marrying DH lost his job and was out of work for 6 months. This was incredibly stressful because I had also made the dumb mistake of building up credit card debt due to the wedding and we had £10k to pay off (hence why I started a DFW diary). The debt is thankfully now all gone and DH has been in his permanent role for over a year – but even that process was stressful with his probation period being extended before being signed off. While we were going through these events my biggest fear was losing the house, a lot of it was pride and wanting to save face but it also made me think about how amazing it would feel to completely own the roof over our heads and not be beholden to a lender. This and some advice I read on MyBestJumper’s diary from Secret Saving Squirrel made me realise that I might be overcomplicating matters in the short term with thoughts and plans for ever more complicated investments/BTLs etc and that there was nothing wrong with simply aiming to pay off the mortgage early.

Things change and none of us know what is around the corner, I am hoping we will have children at some point in the future (DH has a child from his previous marriage) and if that happens it will seriously alter our current budget. Therefore as the title suggest the aim over the next two years is to get the mortgage balance below £200k before we remortgage. I am hoping that we can then reduce the term and fix for a longer period, say 5 years.

My first aim is to get our savings back up to £9,000 – this year should have been all about saving but to be perfectly honest we have been on two holidays, which after last year were needed. All holidays have been planned and saved for so we are still debt free. The savings goal will be achieved by 01.01.16 with final savings from December’s pay packet.

From February we are going to start overpaying the mortgage whilst continuing to save. I have calculated that we will need to overpay the mortgage by £1,200 a month to get down to the target by September 2017 (our current deals expires on 31.10.17).

In an ideal world I would simply love to have the mortgage gone by 2023 but that would be a very tall order therefore for now I am going to focus on achieving this first goal.

Anyway if anyone has read this far thank you so much for not falling asleep, I will leave it there for now!

Walrus

Luckyinlife

Welcome :]

Sounds like a great plan to me

well done on getting debt free as well i did the same in jan this year then took a mortgage out haha

Tilly_MFW_in_6_YRS

Welcome to a brilliant forum with tons of support.

Good luck, Tilly x x

[Deleted User]

Great post, enjoyed your story and thinking, it has some similarities to me.

I'm getting ready to be debt free next week and then focus on the mortgage. My head's been in a whirl for the last few weeks trying to get direction for the next stage of our plan. I know how you feel about wanting to get rid of the mortgage sooner. I've been sorely tempted to throw everything at the mortgage but really need to be sensible and split the spare cash between savings, pension & mortgage (and find some extra for house renovations). Time is not our side so being mortgage free is only part of the plan.

Good luck with your journey.

Pushkin

Hi Walrus - welcome! Envious that you are starting this at your age - the penny didn't drop for me until I was in my early 40s. So what you are doing is very admirable.

thewalrussaid

Just popping in quickly so as not to go a whole month without posting! Will be back later. Main thing to note down is how switching rates has made such a difference, daily interest was previously £18.54, now with two yr fix at 1.69% it is down to £11.39 - much more encouraging, it makes me feel like my OPs will have much more impact.

diamondsonly

Hi Walrus,

Fab diary. I will be cheering you on your journey xx daimonds xx

thewalrussaid

Thank you to everyone who has posted welcome messages, I really appreciate it, I must post more often as it does help keep up motivation.

Mortgage payment has gone out of the joint account and I have made an OP of £109.22 (yes, sadly precise) to make sure the balance stays below the next £1,000 marker IYSWIM, so in the £244ks as opposed to over £245k (it's the little things).

Whilst watching Hidden Villages on 40D and wishing I lived in a picturesque hamlet I did my grocery shopping online for the weekend. Whilst I generally don't do online shopping I find it helps for the times when I have to stick to a set amount. I got everything I required and delivery for under £60 which I am happy with so at least that is one less thing to think of this weekend.

I was reading one of my favourite blogs the other week, its angle is anti-consumerist and I do find it very refreshing. A recent post was about how we can choose a simple life and it made me realise that by splurging on things I don't need I am essentially tying myself to work for longer than I need to. I know this is a slightly stark way of looking at things but on the other hand it means I am in control - I really don't need half the things I suddenly "have to have" and if I can curb those urges (& I am much better than I used to be) I will have a lot more freedom in the long term. A life that offers more time to contemplate the world and even just for more sleep is worth overpaying the mortgage for

thewalrussaid

[quote=[Deleted User];69001481]Great post, enjoyed your story and thinking, it has some similarities to me.

I'm getting ready to be debt free next week and then focus on the mortgage. My head's been in a whirl for the last few weeks trying to get direction for the next stage of our plan. I know how you feel about wanting to get rid of the mortgage sooner. I've been sorely tempted to throw everything at the mortgage but really need to be sensible and split the spare cash between savings, pension & mortgage (and find some extra for house renovations). Time is not our side so being mortgage free is only part of the plan.

Good luck with your journey.[/QUOTE]

Thank you for posting Penny sorry for the slow reply - a big congratulations on being debt free! :T I do know precisely what you mean about trying to think about everything at once, pensions, investments, the mortgage, upkeep of the money pit (I mean house) and then factoring in all the curve balls that life throws at you :-/ For me personally this is why I have decided to focus on the mortgage for 2 years to start with. I get bored when goals are very, very long term so 2 years is a much more manageable timeline.

Have you decided on a plan?

Luckyinlife

well done on hitting 244k :] and nice over payment :]

It is very hard sometimes to keep on top of stuff on here just do your best youll get your ups and downs but dont we all in life

bexster1975

Good luck! I don't think your analysis is dark at all. The whole point of a consumerist society us that it works for everyone except the people who buy into it! If you need it ( or want it enough and can afford it) then great - buy it. If you don't, all you do is tie yourself to the grindstone for a bit longer. If you love how you earn your living, no problem. If not.....

Will follow with interest. It gets very addictive

Bexster