Pay off my mortgage in 5 years

buzzyzoe

I'm under £40000! £39969.21 to be exact.

After I did the 2 weeks handover on my old job, I managed to get a filler job for 3 weeks and I'm due to start my new job a week on Monday, which I'm really excited about. It's looking like I will be Schedule D rather than PAYE for that so I will need to start putting money aside for my tax return each month.

I'm on track to have the mortgage paid off in 3 years, hopefully this could come down further depending on what I'm earning across those 3 years as well!

ch4rly2002

Well done! I've just found your thread and caught up with it. You are doing amazingly well! I'm 30 next week and won't be mortgage free for quite a few years, although I'm hoping with my OPs to knock a few years off. Great advice about the coupons - I'm going to look for your blog for some other ideas. I can't believe how little you manage to spend. I'm sorry you got mugged I think the rental portfolio is a great idea as a pension in your circumstances. I also like your idea to rent out the flat when it is mortgage free. One thing I didn't realise before I became an accidental landlord is that the interest rate on a buy-to-let mortgage is a LOT higher than on a residential mortgage so if you can rent the mortgage free flat and get a residential mortgage on the next property as your main residence, that should save you quite a bit! I look forward to reading your progress as it sounds like you'll be mortgage free in no time at this rate. Out of interest, you say you work in TV, what do you do? Camera work, special effects, wardrobe? No real reason for asking, I'm just curious

Kittenkirst

Fantastic news Zoe! You are very dedicated and inspiring, keep up the good work

buzzyzoe

ch4rly2002 wrote: »

Well done! I've just found your thread and caught up with it. You are doing amazingly well! I'm 30 next week and won't be mortgage free for quite a few years, although I'm hoping with my OPs to knock a few years off. Great advice about the coupons - I'm going to look for your blog for some other ideas. I can't believe how little you manage to spend. I'm sorry you got mugged I think the rental portfolio is a great idea as a pension in your circumstances. I also like your idea to rent out the flat when it is mortgage free. One thing I didn't realise before I became an accidental landlord is that the interest rate on a buy-to-let mortgage is a LOT higher than on a residential mortgage so if you can rent the mortgage free flat and get a residential mortgage on the next property as your main residence, that should save you quite a bit! I look forward to reading your progress as it sounds like you'll be mortgage free in no time at this rate. Out of interest, you say you work in TV, what do you do? Camera work, special effects, wardrobe? No real reason for asking, I'm just curious

Thank you! I was lucky in that my mortgage was relatively small to start with, so I'm able to make a lot of progress quite quickly

So true about BTL mortgage rates, I really want to avoid the complication of that as much as possible as I'm sure it will be confusing enough becoming a landlord!

I work in production, I'm a production manager so I deal with budgets, health and safety and logistics mainly. It's a very varied job and a lot of fun (for me anyway, I'm an organisation freak!) - no two days are ever the same

ch4rly2002

That sounds like a really cool job. I look forward to following your progress

AnotherJoe

Just to harp on about it for the last time, every hundred pounds you pay off your mortgage saves you £1.59 a year.

If you paid that £100 into a mortgage, you'd get £125. Plus whatever the employer puts in. If you arent putting in enough to match what the employer will on the grounds the few quid for a few months isn't worth it, you are losing out twice.

If for example your employer will match you up to a level, if you put in £100, it could become around £250 in your pension. That beats £1.59 I'd say

If you pay off your mortgage and then let the flat out, you'll have no interest to offset profits against.

So, kudos to you for the focus but i think its likely being directed in the wrong way.

As for your 17 pensions (I understand the hyperbole but I'm sure you've got a lot) open up a SIPP and transfer them all into that. Its pretty easy to do, the transferring in company does all the work. Then you have one statement not 17, lower charges which means higher growth. Don't underestimate how much that growth will be over say 30 years instead of a few pence off your mortgage.

BTW, if you look at it from a long term POV, which you are with a rental portfolio, getting a new pension 3 times a year for 30 years is no different at all mathematically to having one pension for 30 years. They will both be worth the same at the end if they have the same amount put in.

DesignNotDefault

Buzzyzoe,

I really like your diary, very motivational.

Congrats on your overpayments and strategies to keep the motivation up and spending down - it really is a marathon and not a sprint eh! That couponing is brilliant, I must look into that more myself.

Sorry to hear of the mugging, hope you are ok. Despite the hurdles described in your posts you seem to have bounced right back which is awesome :-)

I'm intending to be mortgage free in 5 years myself. Although I might have to review how much I can overpay due to other commitments (I'm also a debt free wannabe), I'm focusing on that goal all the same.

All the best! :-)

buzzyzoe

AnotherJoe wrote: »

Just to harp on about it for the last time, every hundred pounds you pay off your mortgage saves you £1.59 a year.

If you paid that £100 into a mortgage, you'd get £125. Plus whatever the employer puts in. If you arent putting in enough to match what the employer will on the grounds the few quid for a few months isn't worth it, you are losing out twice.

If for example your employer will match you up to a level, if you put in £100, it could become around £250 in your pension. That beats £1.59 I'd say

If you pay off your mortgage and then let the flat out, you'll have no interest to offset profits against.

So, kudos to you for the focus but i think its likely being directed in the wrong way.

As for your 17 pensions (I understand the hyperbole but I'm sure you've got a lot) open up a SIPP and transfer them all into that. Its pretty easy to do, the transferring in company does all the work. Then you have one statement not 17, lower charges which means higher growth. Don't underestimate how much that growth will be over say 30 years instead of a few pence off your mortgage.

BTW, if you look at it from a long term POV, which you are with a rental portfolio, getting a new pension 3 times a year for 30 years is no different at all mathematically to having one pension for 30 years. They will both be worth the same at the end if they have the same amount put in.

I assume you mean pension in paragraph 2? I still don't agree I'm afraid. Even if £100 is £250 in a pension, once I've paid my mortgage off and rented the flat out, that rent income is 100% profit. I'd be making around £1000 per month - I just don't see how a pension beats that.

The capital value of the flat will at worst stay the same, and at best (and much more likely) go up so I will also have that capital amount sitting there if I ever need it, or, if I still have it when I'm at pension age, instead of a pension. Money in a pension doesn't increase with inflation, hence why my mums pension is now not enough for her to live on in her retirement. If there's one thing that keeps up with inflation, it's property prices (in London anyway)

I understand how pensions work, I just don't think they are the best way of providing for retirement. Besides, I'm really not here to debate that, I'm just here to keep a diary of my overpayments, which I have decided is the best way of allocating my money at this point in time :beer:

buzzyzoe

DesignNotDefault wrote: »

Buzzyzoe,

I really like your diary, very motivational.

Congrats on your overpayments and strategies to keep the motivation up and spending down - it really is a marathon and not a sprint eh! That couponing is brilliant, I must look into that more myself.

Sorry to hear of the mugging, hope you are ok. Despite the hurdles described in your posts you seem to have bounced right back which is awesome :-)

I'm intending to be mortgage free in 5 years myself. Although I might have to review how much I can overpay due to other commitments (I'm also a debt free wannabe), I'm focusing on that goal all the same.

All the best! :-)

Thanks so much for reading, best of luck to you as well! It's such a great motivator to think about being mortgage free and how much extra money you will have each month

buzzyzoe

I'm trying to get back into doing more surveys and bits and bobs to earn a bit of extra cash. I'm at £36.10 on OnePoll so not long to go to hit the £40 cashout mark which will be a nice boost. I've also joined a couple of new sites including MintVine and Crowdology so will see how they pan out.

I've been spending a bit more money on food shopping than usual as I'm aiming to run 1000 miles this year for charity, so have been trying to eat cleaner and leaner, which sadly is not cheaper! I just need to eat everything in my freezer and then I can do a big MuscleFoods order of loads of meat and that should help keep costs down a bit.

I have been experimenting lots with new recipes, and have found some good breakfast options I've been making pancakes with one banana and two eggs which I was absolutely amazed by as it really does taste like traditional pancakes and is super low calorie and high energy before a run. I've also discovered overnight oats, which is basically oats with milk and a bit of yoghurt, plus extra flavourings. I've been using chocolate protein powder This is great for me because I don't like porridge but I've always wished I did as it's so healthy! Not sure why I like the cold version but I do so that's good news.

I bought a George Foreman grill on Amazon for easier cooking of steaks and chicken which was a bit of a splurge for me but only cost £14.99 so could have been worse!

I've started my new job now and am really enjoying it so far. I'm not at all sure what/when I will get paid this month. I did 13 days at my filler job but at a lower rate to usual, and then this month I'll get paid for a measly 3 days at my new job (as they annoyingly pay at the end of the month but they calculate it from mid-month of the previous month to mid-month of that month).. so hopefully I'll get something reasonably close to a normal pay packet but I'll have to wait and see what happens!

I hate the mid month slump where you haven't made any overpayments in a while and you're just waiting for payday! Pancake day next week though which is my favourite day of the year