Mortgage Free 2018

Sherbet66

Felt the need to share...

Current mortgage: £42,694 @ 1.89% fee free 3 year fix, fix finishes Nov 2018, property valued at £250,000 and the original mortgage was £120,000 in 2007.

Current mortgage payments £433 per month.

Savings: £17,600 spread between Ratesetter & Zopa, earning 4% interest.

It can be a struggle sometimes but I'm currently saving £700 per month, I've just signed up for HSBC current account & the wife to First Direct current account both allowing access to their 5% savings (thanks MSE), therefore £550 per month is earmarked for 5% interest for the next 12 months with £150 to Zopa.

I estimate that by November 2018 when I emerge from the 3 year fix onto the standard tariff that my savings will clear the outstanding mortgage amount, I will be 45 years old :-). I've made a few sacrifices along the way, I'm an average wage earner, my car is getting on a bit and the kitchen is needing done but worth it i'd say.

When I originally mortgaged the amount I owed seemed so huge that i couldn't imagine clearing this but constant overpayments ate away at the debt. After a while I got used to the overpayments and I gradually ramped this up as I made savings across my household spending.

If I can do it anyone can

lexington013

Wow, an inspirational post, well done with your overpayments. Becoming MF at that time of your life is excellent progress. Keep up the good work. As you say, anyone can do it!

Allotrope

Well done! I'm trying to save a significant amount each month but it's hard work sometimes isn't it? You've done so well

Sherbet66

Getting there....

Mortgage now £37700, saving account £26500. A quick calculation this morning figured that at my current rate I should clear the mortgage by September 2017, I'll be 44 years old :-)

Top moneysaving tips

1. I'm now making my own wine/beer, tastes pretty good and at £1.50 a bottle and 50p a pint, unbeatable value.
2. DE Shaving, razor blades cost 6p each, once I mastered the technique it's actually pretty easy, i get a better shave and saves loads on the cartridge razors.
3. Cook everything from scratch, do a menu plan for the week and only buy what is needed. Average food bill is £45 per week for a family of 3 (Lidl) and we eat really well.
4. Overcook dinners and use the leftovers for lunch the next day, saved £10 a week on lunches.
5. Nest Thermostat, cost £200 but saving about £80 a year on bills.

Could do better....

1. Must stop buying crap on Aliexpress I don't need
2. Car was written off, bought a 5 Series estate on a PCP deal
3. Booked a long weekend in Spain with pals, ran out of money on day 2 and used bog standard credit card thereafter, ouch!

Things I'm going to do in 2019 when i'm mortgage free:

1. Book a full on 2 week holiday to San Francisco/LA, no expense spared and do the whole Disney thing full on (usual holiday is budget flight to Europe + Airbnb)
2. Do up the kitchen
3. Any suggestions?

greent

Hello! Similar amount and timescales as our mortgage, I think - which we cleared in 2015, both aged 45

Following becoming MF we have:
* replaced the boiler (we were planning on doing it anyway as it kept breaking down and parts were becoming hard to source - and then one day it literally went 'bang')
* new windows and external doors - warmer house
* 3 week Florida holiday in the Summer for our family of 6 - lots of ££ but a great time and some fab memories (usual if we go abroad is a budget airline and a villa in somewhere like Portugal in Oct half term)
* decided upon (and ordered) a new custom handmade kitchen (stupidly expensive) - being done in Jan/ Feb of next year and will leave us skint - but will be lovely
* started paying down our BTL (IO) mortgage
* had one child start uni (and another may go next Sept)

Do you need other house improvements? - our boiler and windows/ doors have helped with the warmth and energy efficiency (and the appearance) of the house.
Can you overpay your PCP?
Pension top ups?
If nothing else - save/ invest until you think of something else

MM10

Hi Sherbet,
You have a similar scale mortgage and age as me:)

When main mortgage is paid off 2019, I plan to spend a year saving up to pay off the cheaper commune loan. Once that is done I have a 10-15 year plan to save up a perpetuity so that we can be finally financially independent but then I'll be in my fifties and my oldest perhaps at uni.
So I guess, just like you, I may do the whole Disney thing and splurge a bit before going back to the drawing board

Sherbet66

Thanks folks, it does seem like we have similar goals and achievements! I'm definitely having a bit of a blow out then back to saving for the long term, I estimate that we will be better off by £1100 each month but I'm wary about racking up any more debt (ie, to finance a new kitchen), the PCP deal only came about when my old car was written off, I bought something cheap from a small independent garage and that broke down on the way home, I was without a car for a month and needed something asap, I was none too happy to take on more debt although its interesting idea about overpaying it which i will look into. Luckily enough my pension is a final salary so that's sorted.

I guess I've gotten used to ring fencing my overpayments into various high interest account (hands up if you have a complex excel spreadsheet), to be honest it will be nice not having to fret about every unexpected bill that comes along.

Happier_Me

What's the interest rate on the PCP deal? Might be worth targeting this debt once you're mortgage free although I'm all for enjoying yourself too!

If you decide to pay this off its worth checking the 'penalty' for early repayment. I have paid off two similar agreements in the past and the companies in question added additional interest (around 90 days I think) as a 'penalty'. However, I was allowed to pay the bulk of the loan off and then phone and pay the final smaller balance afterwards... with the extra interest calculated on the remaining smaller sum. Saved over £200 in interest each time.

Also with regard to your pension... It's still worth checking out its value and the best time to access this. If you're intending to work to your SPA not necessarily a problem, but if you want to retire earlier then you're pension will be reduced accordingly. For instance, I am aiming to be able to afford retirement at 55 and I can access my pension at this age, BUT it would cost me a fortune to do so. I intend to fund the ages 55-60 through other means (ISA's, SIPP etc) and access my final salary pension at 60 when I have some protection from actuarial reduction.

WorldTraveller_2

Similar story to us! We cleared our mortgage a couple of weeks ago, just before my 44th birthday. Never imagined we would be mortgage free in our 40's but with constant overpayments and careful spending it was possible. It's a great feeling when you get there, we love travelling and it's nice to know there will be more holidays for us in future years!