Free in Three

marycanary

Hi

A couple of months ago I managed to pay off my unsecured debt which I had trailed around with me in one form or another for about 30 years. Since then I have managed to save an emergency fund so I have now decided to turn my attention to my mortgage. I am on a five year fix rate which ends in February 2019 and I would like to have paid all the mortgage off when the fixed rate ends in three and a half years.

Currently the mortgage is £45,500. To pay this off I think I will need to overpay by £1,000 per month. However, the rules of the fix rate allow me to overpay by only 10% per year so I am going to save the rest in a linked offset savings account.

During this time I would also like to build up a larger emergency fund. I have about £4,000 saved at the moment but I would like to increase this to at least £6,000. So in the next 41 months I would like to save £47,500 plus the interest which will be added on the way.

So here we go

marycanary

Hi,
I use YNAB, You Need a Budget. I love it, particularly the process of telling your money what to do. I call it giving every pound a purpose. So last night I went through my spending during September as recorded on YNAB. No big surprises because, after all, I told the wage I received on the last banking day of August what I wanted it to do. I get paid again on the last banking day of September (30th) so on Wednesday, when I know exactly how much I've made in the month, I will be back on YNAB to tell my money what to do during October.

It hasn't always been like that, until I got started on setting a budget and sticking to it I had no idea where my money went. The first month I set a budget I allocated £50 to eating out and takeaways. Boy was I in for a shock! I found I was spending closer to £150. Setting and sticking to a budget helped me pay off unsecured debt I've carried round for 30 years. Just madness really.

Mary

Luckyinlife

Budget defiantly will help in life with MF and saving

money is so easy to spend yet so hard to earn

Personally i just give myself a fixed amount for petrol food and treats this could be cloths game what ever but i dont always spent it all so next month i give myself less and save the rest

How long have you had the mortgage for ?

marycanary

Hi Luckyinlife,

Thank you for relying. I've had the mortgage since March 2014. It started at £50,000 and I have paid it down to £45,500 and I now want to get serious and get rid of it by the time the 5 year fix is up.

You seem to be doing really well attacking your mortgage plus you have a great emergency fund

Good luck

Mary

Luckyinlife

Ah right thats a great mortgage figure to start with i guess you had a deposit :]
5 years is a great target im aiming for 5-10 Ya im remortgaging myself at the moment and fully renovating the house so need all these things to settle down and then see what i can pay off the mortgage :]

Good luck on your journey

pennystretcher

Considering the current saving account rates aren't that great - how much is the penalty if you overpay more than the 10%? I'm with YBS and the penalty is 1% of the overpayment, so I keep overpaying that as the interest charged on mortgage v savings accounts (except rainyday funds I have in TSB and Lloyds) is poor and the interest charged is reduced as soon as they receive OP. (Monthly payments kept the same)

marycanary

Hi

Yes I'm no longer a young woman and I have owned property before with my ex partner so I've starting over again on my own with my share of the equity in a joint property.
Also I am saving in a linked off set savings account so the effective interest rate is the same as the mortgage

mary

Secret_Saving_Squirrel

Good luck Mary. I also had to,start again after selling up the family home and giving half to ex oh. It was hard when my friends all seemed so much further down the road but I soon caught up again and I am sure you will too.

lippy1923

Good Luck. Great goals you have set yourself. I look forward to reading your progress.

Lippy

shangaijimmy

Welcome onboard the mad house!

A_Frayed_Knot

Hi :hello:

Welcome. Look forward to following your journey with great interest as I have similar mortgage/goals (slightly less/slightly more) but just a fraction of your aim for op.


Good Luck