Wipe out the mortgage in 99 steps!

edited 11 October 2015 at 9:32PM in Mortgage-free wannabe
25 replies 2.5K views
ajdjajdj Forumite
567 Posts
Part of the Furniture 500 Posts Combo Breaker
edited 11 October 2015 at 9:32PM in Mortgage-free wannabe
I've been actively involved with the 'save £12k in' challenge over on the Savings & Investment forum run by slowlyfading. My quest is to be mortgage neutral, so thought it would be good for me to track my progress with a MFW diary.

Background:
I'm 31 female, live with my wife (45). Been together 7 years, married in July. We live in her property which is mortgage free. I have 2 mortgaged BTL's purchased before we got together, approximately 10 years ago. We manage our finances independently (but with transparency) as that has always suited us. Due to the age difference we are at slightly different stages with our financial goals.

However, our life goals are very much in alignment and we plan to retire early. My wife is on course with retirement planning and savings to achieve retirement in 5 years time at 50. I want to get serious about the challenge of being mortgage neutral by the time I'm 40 so that it gives us more flexibility to instigate a lifestyle change. At the moment our conversations about retirement centre around possibly swapping our UK home for one abroad and having the freedom to do more travelling.

Mortgages
BTL Mortgage 1: £124,063
BTL Mortgage 2: £80,065
Total: £204,128

Current savings
Regular Savers: £8,600 @ average 4.02% interest
Cash ISA: £5,400 @ 2% interest
Loyalty Saver: £15.61 @ 1.2%
S&S ISA: £10,000
Total: £24,015.61

Mortgages-Savings= £180,112.39


Strategy:
Both mortgages are 2.5% variable (2% + BR). Interest only.
Regular savers mature at different stages, once matured the plan is to put into S&S ISA or possibly look at P2P. Currently putting £750/month into different accounts.
Cash ISA also acts as an emergency fund with easy access. I add £50/month to keep the rate.
Loyalty saver is attached to my current account and acts as a crisis fund (immediate access). This should have £500 in it.
S&S ISA is invested in low cost ETF portfolio with AJ Bell.

Short Term Goals
Achieve £25,000 total savings by end November
Save additional £1,000 by end of the year to be put aside for external decoration on one BTL scheduled for next year
Restore £500 crisis fund- started Tilly Tiding this week (thanks to this board). Have set up a daily reminder on my phone to help me get into the habit.

Long Term goals:
Increase savings next year to aim for £1200/month (had to reduce savings this year to pay for the wedding).
Mortgage Neutral by 40 (99 months to go!)
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Replies

  • Good luck on your journey :)
  • ajdjajdj Forumite
    567 Posts
    Part of the Furniture 500 Posts Combo Breaker
    Here's a stab at an SOA:

    Income
    £2,070 Salary (after 15.5% pension contributions, student loan repayments, private mileage)
    £595 Rent from property 1
    £0 Rent from property 2 (currently empty- my brother and his gf will be moving in shortly for ~3 months to help them out whilst looking to buy).
    Total £2665

    Expenses
    £260 Mortgage 1
    £170 Mortgage 2
    £50 Service Charge Property 1 (rising to £100 from Jan)
    £100 Service Charge Property 2
    £50 Council Tax (my contribution)
    £400 Household expenses * (groceries- 3 meals/day for 2 + 1 cat, toiletries, cleaning products, wood burner fuel etc).
    £25 Exercise
    £800 Savings
    £13.50 Sim Only mobile contract
    £20.00 Haircuts (4 visits/yr)
    £50.00 Entertainment/Going out (tend to do 1 nice meal every 8 wks)
    £250 Holidays - not actually saved for but estimated based on 2-3 holidays a year. This is unlikely to change as we both really value some time away from work.
    Total £2188.50

    Potential underspend £476.50

    Things like clothes and shoes are replaced ad-hoc when needed (rarely).

    * Wife pays for majority of council tax, Gas, Electricity, Insurances, TV Licence, Broadband. This is just how we split expenses.
  • LuckyinlifeLuckyinlife Forumite
    1.6K Posts
    Forumite
    Great plan
    will be awesome when it all comes together :]
    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
  • ajdjajdj Forumite
    567 Posts
    Part of the Furniture 500 Posts Combo Breaker
    Monday is weekly shopping day. £81.01 spent after using £12 off £60 coupon and 2 brand matches totalling £1.68. My wife always get sent 6 weeks worth of coupons at a time which we then use with my Nectar card. Mr S therefore doesn't think she uses them, so a new set drop through the letterbox every 6 weeks or so, without fail. These coupons really help as we are very good with what we eat, everything cooked from fresh. We get through so much fresh fruit, vegetables and salad it's unbelievable!

    Log burner lit for the first time since March as its started to go a bit chilly. Cat thinks she's died and gone to heaven, bless her. Now the game begins where we try and cope with the log burner alone for heat through the winter. Last year we turned the central heating on 4 times, 3 times for an hour on v.chilly mornings and once after being away for a weekend and the whole house needed a thaw.

    £4.77 TT'd to loyalty saver today. That's £19.38 in just 3 days. Not sure I'll keep up those numbers up but will see how it goes.
  • LuckyinlifeLuckyinlife Forumite
    1.6K Posts
    Forumite
    I love a log burner dont have one myself but they are great :]
    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
  • ajdj wrote: »
    Monday is weekly shopping day. £81.01 spent after using £12 off £60 coupon and 2 brand matches totalling £1.68. My wife always get sent 6 weeks worth of coupons at a time which we then use with my Nectar card. Mr S therefore doesn't think she uses them, so a new set drop through the letterbox every 6 weeks or so, without fail. These coupons really help as we are very good with what we eat, everything cooked from fresh. We get through so much fresh fruit, vegetables and salad it's unbelievable!

    Log burner lit for the first time since March as its started to go a bit chilly. Cat thinks she's died and gone to heaven, bless her. Now the game begins where we try and cope with the log burner alone for heat through the winter. Last year we turned the central heating on 4 times, 3 times for an hour on v.chilly mornings and once after being away for a weekend and the whole house needed a thaw.

    £4.77 TT'd to loyalty saver today. That's £19.38 in just 3 days. Not sure I'll keep up those numbers up but will see how it goes.

    Do you have a stove fan, invested in one last year and they really work to circulate the hot air :)
  • ajdjajdj Forumite
    567 Posts
    Part of the Furniture 500 Posts Combo Breaker
    Do you have a stove fan, invested in one last year and they really work to circulate the hot air :)

    Yes, its great for circulating the hot air downstairs but we find it doesn't push it all the way up the stairs due to the layout of the living room so bedroom always feels noticeably colder.
  • ajdjajdj Forumite
    567 Posts
    Part of the Furniture 500 Posts Combo Breaker
    NSD 2 days running so moved £25 to savings today. Given myself a budget of £125 to last me until I next get paid on 25th.

    Chicken Tajine in the slow cooker for tonight to have with some cous cous- smells amazing!

    Starting a 2 year part time MSc tomorrow. Very fortunate that work have agreed to fund it for me so it won't affect my savings plan and will hopefully help boost my income potential once finished.
  • ajdjajdj Forumite
    567 Posts
    Part of the Furniture 500 Posts Combo Breaker
    Yesterday was another NSD and expect today will be too as I'm working from home :)

    Sold an item for £32 last night- £30 to savings, £2 to the Loyalty Saver.

    Signature updated to reflect the focus on MFW, so close to the £170k's now!
  • Good luck on your journey!

    We are also aiming to retire early but havea way to go yet. My aim is 55 (14 years, five months to go!) but if we can keep up the pace we should have the vast majority of our retirement saving done by 50. Anything saved after that will be a bonus and/or to help the kids get on their feet financially/reduce the time we need to live off savings before accessing pensions.

    I have considered buying a BTL in the past but have never taken the plunge.
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