Quarter of a million reasons to be Mortgage Free!

edited 10 November 2015 at 4:38PM in Mortgage-free wannabe
112 replies 19.7K views
coxj2901coxj2901 Forumite
207 Posts
edited 10 November 2015 at 4:38PM in Mortgage-free wannabe
Hi all,

Like others, I have read through quite a lot of diaries and think it's time I finally started my own mortgage free quest. We recently bought our dream home 2 years ago with a mortgage of £255,000 over 28 years. The house is currently valued at around £330,000 and the mortgage balance currently sits at £244,671. We have just remortgaged for a 2 year fix of 2.34%.

I am 38 years of age and live with my wife and three daughters aged 12, 10 and 5. My mother in law has recently moved in with us and we are currently in the process of converting the garage and building an extension which will become an annex for her to live in.

I started my own business around 6 years ago and we took on a lot of debt during this period which is now almost paid off and the remaining £10,000 we owe is at 0% (£5,000 to my mother in law who wants £100 per month paid until she reaches her pension age) and £5,000 on a credit card which is at 0% until 2018. Therefore these will be paid off before any interest is accrued but I won't be overly focusing on these and will switch my attention to the mortgage instead.

I am fortunate that the business has steadied itself and organically grown over the 6 years since inception so that our monthly drawings are at a point that I can really start making some decent sized over payments.

Here is a quick snapshot of our monthly income and expenditure:-

Statement of Affairs

Monthly Income Details
Income from Employment (after tax). . . . . . . . . . . . . . . . . . . . . . . 6,200.00
Benefits (Inc. Child Benefit/Tax Credits & Income Support). . . . . . . . . . . 188.00

Monthly Expense Details

In Your Home

TV licence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.12
Internet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30.00
Home phone. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.00
Electricity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70.00
Gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70.00
Water . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.00
Council tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180.00
Home insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.00
Mortgage/Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,045.09
Mortgage life insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30.96
Food and household shopping . . . . . . . . . . . . . . . . . . . . . . . . . . 500.00


Motoring & Public Transport

Petrol/Diesel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400.00
Car insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.67

Debt Repayments

Credit card repayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150.00
Car Lease Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 435.00

Savings & Investments

Pension payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240.00
Buying shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.00
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Childrens Savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60.00

Family

Pet food. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00
School trips. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00
Pocket money. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.00
Pet insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.00

Entertainment

Satellite/Digital TV. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.00
All other entertainment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400.00

Clothes, Health & Beauty

Optical bills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.00
Haircuts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30.00
Dentistry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00
New clothes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180.00

Big One-Offs

Birthdays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.00
Summer holiday. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500.00
Christmas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80.00

Total monthly income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,388.00


Total monthly expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,862.84

Total surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,525.16



My plans are to try and clear the mortgage in around 8 years which would mean overpayments of circa £1,750 per month at current interest rates. We could obviously scale back our outgoings to be more aggressive with the overpayments but after a long period of being in debt and having hardly any money we want to try and enjoy this journey by having a couple of holidays each year and days out as a family.

Here's to the next 8 years! :beer:
Nov 2015:- Mortgage Balance £244,671
Aug 2017:- Mortgage Balance £183,832
«13456712

Replies

  • pennystretcherpennystretcher Forumite
    458 Posts
    Part of the Furniture 100 Posts Combo Breaker Mortgage-free Glee!
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    :T welcome! Looking forward to your updates..
  • comeandgocomeandgo Forumite
    5.3K Posts
    Tenth Anniversary 1,000 Posts Name Dropper
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    You have a slight addition error, your monthly income less your monthly expenditure?

    I see it now, your income is over by £1,000
  • comeandgo wrote: »
    You have a slight addition error, your monthly income less your monthly expenditure?

    I see it now, your income is over by £1,000

    Thanks for spotting that, I have edited it now to show the correct amount :o
    Nov 2015:- Mortgage Balance £244,671
    Aug 2017:- Mortgage Balance £183,832
  • Petal88Petal88 Forumite
    263 Posts
    Eighth Anniversary 100 Posts Combo Breaker
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    Welcome! I'm looking forward to following your MFW journey and I'm very impressed with your OP plans!
    Mortgage Apr '15: £316,384
    Mortgage Oct '17: £305,399
    Daily interest at start: £38.23
    Daily interest Sep '17: £12.09
  • Good luck - will watch out for your posts!
    SLM
  • edited 3 October 2017 at 12:05PM
    coxj2901coxj2901 Forumite
    207 Posts
    edited 3 October 2017 at 12:05PM
    I've had a refund from a company for £180 today that was unexpected as it was a non refundable deposit that they have ended up refunding! Therefore I've paid this £180 against the mortgage which will help towards a stretching November target.

    Balances updated

    Old Mortgage Balance . . . £244,670
    Overpayment . . . . . . . . . £180.00
    New Mortgage Balance . . £244,490
    Interest Saved . . . . . . . . . £150.00

    Targets

    Monthly Overpayment Target . . . £1750.00
    Actual Monthly Overpayments . . . £226.00
    Shortfall / Surplus . . . . . . . . . (£1524.00)

    2015 Targets (Only 2 months!)

    2015 Overpayment Target . . . £3500.00
    2015 Actual Overpayments . . . £226.00
    Shortfall / Surplus . . . . . . . . . . (£3274.00)

    Total Summary - Nov 2015 to present

    Cumulative Overpayments . . . £180.00
    Cumulative Interest Saved. . . £150.00
    New Daily Interest . . . . . . . . £15.68

    In other news work continues on the annex and the workmen have taken off the garage doors and started bricking up the openings for the windows to be put in.

    They have finished putting the footings in for the extension and they are now up to damp course level so hopefully they will start erecting the walls over the next day or two, so we should start seeing the shell come together.
    Nov 2015:- Mortgage Balance £244,671
    Aug 2017:- Mortgage Balance £183,832
  • Your circumstances sound very similar to ours. We bought our dream home in 2010 and converted a former stable into a one bed apartment for my parents. Our mortgage was £300k and is now just under £250k. It was a lot lower but I borrowed a large amount of money against the mortgage to pay for our new windows.

    A quarter of a million pound mortgage is a large and unwieldy amount of money and can sometimes be a bit dispiriting when you drop a couple of thousand into it and it disappears with barely a ripple. :(

    I find that setting myself some short-term goals really helps. My previous goal was to own more than 50% of the home. I achieved this, but then re-borrowed money and went back over the 50%. The current aim is to blitz the remortgage loan ASAP.

    Anyway, good luck with you MFW journey. :)
  • Welcome and good luck. It's a large mortgage but the small amounts OP'd really do add up!
    MFW 2017 #123 2018: £1,852.64/£39,200 (4.7%)
  • I've had £28.84 paid back to me today which was owed so I have rounded this up and paid £30 towards the mortgage.

    Balances updated

    10th Nov-15 Mortgage Bal . . £244,670
    Overpayment . . . . . . . . . £30.00
    New Mortgage Balance . . £244,460
    Interest Saved . . . . . . . . . £25.00

    Nov 2015 Target

    Monthly Overpayment Target . . . £1750.00
    Actual Monthly Overpayments . . . £256.00
    Shortfall / Surplus . . . . . . . . . (£1494.00)

    2015 Targets (Only 2 months!)

    2015 Overpayment Target . . . £3500.00
    2015 Actual Overpayments . . . £256.00
    Shortfall / Surplus . . . . . . . . . . (£3244.00)

    Total Summary - Nov 2015 to present

    Cumulative Overpayments . . . £256.00
    Cumulative Interest Saved. . . £175.00
    New Daily Interest . . . . . . . . £15.68
    Nov 2015:- Mortgage Balance £244,671
    Aug 2017:- Mortgage Balance £183,832
  • shangaijimmyshangaijimmy Forumite
    3.8K Posts
    Part of the Furniture 1,000 Posts Name Dropper
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    Big ambitious and well thought out plans. Love it and have subscribed.
    MFW: Was: £136,000.......Now: £61,892.24......
    Mortgage Neutral Deficit: £43,082.90... Mortgage Neutral Savings: £18,809.34
    MFiT-T6 #13 - £3,517 of £15,500 (22.69%)
    1% Mortgage Challenge 2022 - £157.59 of £650
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