Mortgage Free by 2030 - Diary of a wimpy MFWKid

MFWKid

Hello all,

Well, as with many of you, I've been lurking around the forums for many years without really contributing much of my own.

A little background, my OH and I have a wonderful son (3 years) who has been our main distraction for a while now. We live in a property and area we both love, even if it isn't the dream home we probably always wanted, but have decided to be sensible and pay off the mortgage as soon as possible as opposed to moving into even more debt. We live comfortably, not crazy, but not super thrifty either.

This decision really came from a light bulb moment as I was discussing childcare costs with a friend. Joking around calling it a "second mortgage" made me suddenly realise a dastardly plan that led me to this forum.

As my son's childcare costs starts to reduce (due to free hours, changes in work commitments, school, etc), we are going to use the money that to overpay the mortgage. This is in addition to starting to reduce our general outgoings to bump that value up even further. The overall plan is to pay off the mortgage before we are 50 - 15 years from now - which still sounds like a long time, but nearly half what we are committed to. If we can do it any sooner then all the better!

So, the plan!

Long term:
- Pay off enough of the mortgage to get below 65% LTV (currently around 72%) within 3 years then,
- Re-mortgage, and re-organise funds to tackle the remaining amount over 7-12 years

Short term:
- Build a modest reserve of £2,000 for an emergency fund
- Streamline our finances to help increase overpayments
- Build up to average over £1,000 of overpayments a month within 3 years

Writing it down does suddenly make me realise how big a goal this is - but we are up for the battle!

10-15 years is a long slog, but hopefully you can stay with me for the journey - I would value the input!

MFWKid :j

Luckyinlife

First thing first go sign up on the discussion board where we all have the same kinda target :]
https://forums.moneysavingexpert.com/discussion/5199647

You can defiantly say child care costs are a second mortgage just for the people you pay not yours :[

You seem to have a great idea of where you want to be or head to

Keeping a diary will show you over time how far youv come and the support is priceless on here some amazing people

may i ask how much your mortgage stands at now ? and do you have a fixed rate or anything atm ?

MFWKid

Hi Lucky,

Thanks, I've put my name down

Mortgage stands at 220,000 and we have 3 years left at a fixed rate (3.99) before it goes to SVR. Its not great, but hopefully the remortgage in a few years will get that rate down - but to be honest I like knowing the exact amount going out either way.

Hoping the diary is going to keep me focused!

Luckyinlife

Aww good :]

I see if you can overpay 1k a month it wont last very long at all

can you overpay 10% a year fee free

is this the forever home for you ?

MFWKid

1k is certainly the aim - although its going to be closer to 250-500 at first. Yes, 10% is the limit, although that won't be a problem either any time soon!

Forever home, probably. We've thought long and hard about it - and even started to get the bug again when starting to look at estate agents - but our home is nice, the location is fantastic and there isn't really a need for anything bigger.

That said - we will see. But either way being mortgage free is certainly going to open up the options later in life

Luckyinlife

Ya i feel the same way about my place iv lived in the area in a slightly smaller house not much tho all my life

So i could easily live in my new place forever no need for more room really but as you say you never know what may happen in life

good luck anyway and ill follow with interest

Secret_Saving_Squirrel

Good luck MFW kid. Sounds like a good plan.

class2ldn

We are just in the process of completing on our new house and I have a similar timescale to be mortgage free albeit 2028 when I'm 45. Will be keeping an eye on this.
Good luck

MFWKid

Thanks all, (love the name SSS - yours was one of the first diaries I read through)

I think in all honesty the justification on the house and not moving probably is as much to do with validating choices up to now as well. We probably could have moved a few years ago, but chose to have children instead. I decided to leave a job for a lower salary as it was becoming too stressful. Etc, etc.

Now, its starting to feel like the right choices were made - hopefully this is the right one too

class2ldn - excellent, looking forward to sharing the journey with a few others - best of luck with the new house!

Definitely getting the buzz for it all now - been reading diaries and doing spreadsheets since 8pm...

MFWKid

Ok, 1 day in and today was a good day

It was an NSD (despite a very tempting coffee calling after me), and have cancelled Sky (never watch it), and sorting out the broadband. So I'm £21 up already!

Also, it looks as if I will be hitting that small emergency fund target by the end of the week. Which leads me to my first question - what do most people do with their emergency fund?

At present we have 3 accounts, one each and a joint. Each month we transfer X amount into the joint to cover the bills. My plan is, as each service I save on is removed we simply reduce the amount we pay into the joint accordingly. Then, everything else goes into the overpayment. Simple, but makes it easy to track.

So - what should I do with the emergency fund? Move it into one of those accounts? Then never take more than that for the overpayment? Or move it into something more savvy? My problem with this is surely it needs to be readily accessible - so a tied down saver isn't going to help much here is it?

Good problem to have tho

Luckyinlife

Personally i keep my EF in a easy access account you wont earn much intrest last check around 1 %

i keep 5k earning 4% and the rest in a isa/saving account as id use that before breaking into the 5k that earns 4%

123 acount is the best around for 20k worth but it all depends on the situation your in