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Irish cottage journey to (4!!) mortgage freedom

edited 4 September 2020 at 9:46AM in Mortgage-Free Wannabe
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hildosaverhildosaver Forumite
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edited 4 September 2020 at 9:46AM in Mortgage-Free Wannabe
Hi all,

I have decided to start up a new thread to reflect my own journey to mortgage and financial freedom. I did have another thread which I didn't really get around to updating very much and I thought it best to start afresh.

A bit of background - I'm turning the big 40 this year (:eek:) and I guess it has certainly focused my mind a lot on the next 10 years and what I would like to achieve by the time I am 50.

I'm married to my DW and just over 2 years ago we moved into to what I hope will be our forever home. Mortgage is 126k and home is valued at 220k, so far so good. Before we met and were married both myself and DW owned our own homes, both of which we both still have - mine was in negative equity for a while but through overpaying we are now able to say we do have equity in my old house which is rented out. DW's old house is currently empty but we are hoping to let this out in the next month or two (still a little bit of electrical work needs done). We also have another rental house which is currently on a buy-to-let mortgage which we bought when DW received an inheritance. I'll try and make it all a bit clearer below:

Main Home - Mortgage £126,000 - Value £220,000 - (mortgage is £579 p/m), overpaying £100 per month and on 2 year fixed deal (I think its around 2.34%).

My old Home - Mortgage £90900(ish) - Value £115-120,000 -(mortgage is £525 p/m roughly) rented for £500 p/m, overpaying £500 per month and on SVR (4.45%) though hoping to remortgage as buy-to-let later this year (permission to let currently)

DW's old Home - Mortgage £55,000 - Value £70,000 - currently empty, no overpayments and on interest only at a low rate. (mortgage is around £100 p/m)

Inheritance money property - Mortgage £36,000 - Value £60,000 - rented at £400 p/m, interest only at a low rate (mortgage around £96 p/m) - no overpayments at present.

All in all we have mortgages of the value of almost £310,000 which is quite scary. :eek:

My plan since I learnt about the benefits of overpaying has been to focus on my old home which was stuck in negative equity (my plan was to sell this house) and over the past few years we have managed to bring the mortgage down from around £120,000 to now close to £90,000 in less than 4 years which I am really pleased with. I'm going to continue overpaying this at £500 p/m till I get it down to around £88,000 which should enable me to finally remortgage this to a buy-to-let (currently have permission to let) and to reduce the term by a few years. I estimate I should be able to reduce the mortgage payments by around £100 p/m by doing this.

So then I am unsure what the next stop should be. By the end of this year we will finally have remortgaged both our own home (already done) and that troublesome old house of mine (which by then might actually break even). I've decided that by continuing to overpay we could keep all these houses long-term instead of selling one or two of them off which was my original plan before I got addicted to overpaying!

We are hoping to start a family this year (have a referral to fertility clinic next month as we have been having no luck) so obviously if we are fortunate enough for that to occur then plans may have to change however I want us to be in the best possible position we can be and also I hope to make it possible that DW could work part-time and for us to still be able to pay bills and live.

With that in mind do you think I should continue to focus on our main home and my old house as they have the biggest mortgages or should I change my focus onto the interest only houses once I remortgage my old home to hopefully break even re: rent and mortgage payments? What I'm considering is to overpay both interest only mortgages down for one year (next year) then look to remortgage them as repayment mortgages. Then I will no longer have to worry about having to find a large amount of cash in 15/20 years to pay them off.

We also save a little (though not as much as we should) I have an ISA which I put £50 into every month (currently around £3000 in it) so another option is to reduce the overpayments from next year and start saving more.

Any advice would be great!!

:money:
I am insane and have 4 mortgages - total mortgage debt £258k. Target to zero = 10 years! (2030)
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Replies

  • hildosaverhildosaver Forumite
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    Had a non-spend day yesterday by using last night's left-overs for lunch and a quiet night in. Not sure I'll manage that today as I've been a little unorganised this week and have no lunch stuff in the house so will have to buy something :(

    Have already made my overpayments for the month (£600 total) so I'm not not so patiently waiting till I get paid again and I can make another overpayment! It is addictive watching those numbers go down isnt it??
    I am insane and have 4 mortgages - total mortgage debt £258k. Target to zero = 10 years! (2030)
  • lulabelle1lulabelle1 Forumite
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    Hello and Welcome!

    Wow, you've got your hands full with all those houses and mortgages!

    I'm far from being any kind of expert, but I'd advise:
    -Save some money, having a nice little savings pot could remove some of the burden you may feel in regards to having all of those mortgages.
    -Focus any planned OP's on your own home
    -if you can, change the interest only mortgages to repayment mortgages so that the o/s debt will start to slowly come down

    I personally wouldn't focus any OP's now on the rental properties as currently you still get some tax relief on mortgage payments for these properties when you do self assessments... so this might save you a few pounds in tax over the next few years

    Also - your own property is your home, if possible it would be nice to be mortgage free (and worry free) on this house first... then it's yours, no matter what life might have in store around the corner.

    Once your own mortgage is paid, I'd start to apply OP's to the rentals to get rid of those too :)
  • hildosaverhildosaver Forumite
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    Hello Lulabelle1 thanks for responding!

    You are right, we do have our hands full and to be honest over the past few years it has at times felt like a burden on us but I think that if we can manage to finally remortgage my old home to a BTL at a better rate and reduced length then I will finally feel like some of the pressure has lifted.

    That is great advice about changing focus to our main home - I think I will do this once we remortgage my old home - I LOVE the thought of living in a home that we truely own and as you say that will really give us the security that we need to go on and hopefully overpay the other houses to oblivion!!

    So my plan will be as follows:

    Continue to overpay my old home till we can remortgage BTL, reduce term and interest rate (hopefully July/August 2016).

    Remortgage rental properties to re-payment mortgages.

    Focus overpayments on our home and aim to hit the 10% overpayments for the next 2 years (may be a bit too ambitious but you gotta aim high right?)
    I am insane and have 4 mortgages - total mortgage debt £258k. Target to zero = 10 years! (2030)
  • MM10MM10 Forumite
    57 Posts
    First off I would have an emergency saving fund in a savings account ( quick access, low return), as said above focus mainly on your home first. Pay that off before facing the others. Also maximize your ISAs.
    Total mortgage when started £256,809 in May of 2011; 2018 MFW #5
    Main mortgage was £214,309; now [STRIKE] £110,716 at Feb 2016 [/STRIKE]; [STRIKE] £63,645 at Feb 2017 [/STRIKE]; [STRIKE]£10,600 at May 2018[/STRIKE]
    Original repayment date 2036; Main mortgage free date [STRIKE]July 2021[/STRIKE]; [STRIKE]Dec 2020[/STRIKE]; [STRIKE]January 2019[/STRIKE] June 2018:)
  • MadcatgirlMadcatgirl Forumite
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    Hiya - we're also juggling a few different mortgages. I'd be tempted to half and half it, oping on your family home and your rental. We're doing that with ours, as although our rental is on a btl with reasonably low rate of interest, we're conscious of the tax implications when mortgage relief ends. My partner is focussing on the rental and me on the family home.

    Sounds like you've got some good potential for retirement rental incom :)
    March 2016 - £178,914.59; July 2017 £146,160.38
    Mortgage end Sept 2043; Target - pay off by March 2022, now Sept 2021
    Target balance July 2018 £112,560
  • hildosaverhildosaver Forumite
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    Thanks for the advise guys - Madcatgirl you are right in that we do have good potential for a retirement income but we are a long way from that at the moment! I will feel like we are moving in the right direction once I get my old home re-mortgaged I think, that will be about 4 years hard work to get to that point so I think a bottle of bubbly may be opened that day!

    Slow and steady wins the race they say though at times it does feel soo slow! Would love to have the sort of income that I could overpay £1000+ per month though that is within reach if we can get all our rentals rented and have the houses on low interest deals.

    Another no spend day yesterday, we are hoping to have our old campervan back from mechanics next week and then we can book ourselves a few weekends away in it to give us something to look forward to. All being well today will be another no spend day, will take a look in our freezer and see what delights I can grab for dinner!
    I am insane and have 4 mortgages - total mortgage debt £258k. Target to zero = 10 years! (2030)
  • gallygirlgallygirl Forumite
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    With so many good regular savers and interest paying current accounts at the moment I'd focus on those rather than putting anything into a cash ISA (remember the first 1k of interest is tax free now). Once you've sorted out the remortgages it would also be beneficial to whack money into the savers and current accounts rather than overpaying the mortgages (you could always use the savings once they've matured to make a lump sum). A bit of faffing around sorting out accounts and minimum funding and/or DD's to get the regular savers set up but once done it's easy.

    You're in a very good position to set yourself up for the future and retirement need not be 'a long way off' if you don't want it to be!
    A positive attitude may not solve all your problems, but it will annoy enough people to make it worth the effort
    :) Mortgage Balance = £0 :)
    "Do what others won't early in life so you can do what others can't later in life"
  • hildosaverhildosaver Forumite
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    Thanks for the advice it's been really helpful. I'm a bit of a master at the 'no-spend days' and I have managed about 5 this week alone. The downside to this is that several days can go by without me really doing very much and sometimes it feels that life is passing me by. Do any of you guys feel like this sometimes?

    My wife (along with her sister) are the main carers for their mother and one of them stays over at their mum's most nights every week so often there are 2-4 days per week that I don't get to see my wife which can be tough on both of us - although I do enjoy my own space it can get me down sometimes.

    Funny enough one of the things that can cheer me up a bit is staring at my mortgage overpayment spreadsheet and dreaming of what life could be like in 5-10 years time - it's the years getting there that is the problem!
    I am insane and have 4 mortgages - total mortgage debt £258k. Target to zero = 10 years! (2030)
  • edited 26 April 2016 at 11:46AM
    hildosaverhildosaver Forumite
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    edited 26 April 2016 at 11:46AM
    Yet another no-spend day today - I spent around £4.50 in total yesterday on a lunch (bad) and some spinach and reduced asian peanut noodly thing which I hope will create a couple of days lunches (good).

    Both my DW and myself are feeling a bit low at present as we both are having a tough time in our jobs in different ways, DW has a real bully of a boss and is applying for lots of things so hopefully will get a change soon and me because I'm working on my own a lot without much guidance in a new role and my confidence is taking a beating (I am my own worst enemy in many ways).

    Fortunately we are both really looking forward to this weekend when we see ELO in Dublin and then we will spend the weekend in the city - it will be a fairly expensive weekend but I really think we need it so I don't mind (we rarely splash out on anything).

    I paid £60 off my credit card yesterday also which is good (I owe £1000 and have a direct debit set at £150 p/m so I hope it will be cleared by the end of the year). My hope is that by the start of 2017 we will have re-mortgaged our debt and reduced term and repayments and I will also have cleared all credit card debt. What a great start to the year that will be.

    The campervan got through the MOT without any hassle (woohoo!) it's coming into it's 22nd year and is still going strong - really looking forward to booking ourselves in a few sites for some weekend breaks. Our 'big' holiday this year will most likely be spent in the campervan down the west coast of Ireland which should be great (weather permitting) and reasonably cheap.
    I am insane and have 4 mortgages - total mortgage debt £258k. Target to zero = 10 years! (2030)
  • hildosaverhildosaver Forumite
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    Hello again,

    Had a fairly expensive week - spent £95 getting the guttering repaired at one of our houses - glad it's done though as it was causing damp in one of the bedrooms so fingers crossed that will fix it. We also need to buy a new fridge for the same house as the old one is starting to fail. More expense but that is the hazard of being a landlord!

    We also spent a great weekend away in Dublin - we hoped to see ELO but sadly they cancelled at the last minute which was a shame (especially since we already have plans made for next weekend so will not be able to see them) but the silver lining is that I know somebody who wants the tickets and we will get our money back (around £160).

    My packed lunches are boring but save me a fair amount each week so will continue - I mostly eat salads now.

    Since I got paid I have overpaid our main home's mortgage by £100 and I intend to overpay my old house by £500 this week - we are 2 months away from when we can re-mortgage that house (I hope) and then I will overpay the full £600 towards our home and see how we go.

    I'm saving £50 per month into an ISA which I would love to raise to £100 but may need to wait for the remortgaging to happen first (I have around £3300 saved as an emergency fund at present) - I know ISA's may not be the best place for money with the recent changes to tax on interest so over the next few months I will look into moving this into a higher interest current account.
    I am insane and have 4 mortgages - total mortgage debt £258k. Target to zero = 10 years! (2030)
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