The ups, downs, and occasional sideways bits of trying to be mortgage free

brizzledfw

Hello :wave: a new subscriber here... I love YNAB and the clarity it brings, even if I don't always like what its showing me...

Potters off back to read through the early days...

Tahlullah

Well, a big reset on YNAB will allow you to get a true picture of where you are financially. Coupled with being forced to run the mortgage separately, you really will know how well you are doing at overpaying.

So, with a $220k mortgage, you can still aim to clear it earlier.

New start, new you.

Will be watching and cheering you on.

Tx

armchairexpert

Hi Brizzled! I've been lurking on your diary for ages. I'm from Bristol originally, before I moved to Australia. Lovely to have you.

Yes, Tallulah, lots to be said for a fresh start. I had to remind myself that my actual worldly goods hadn't changed just because the numbers looked different for a while there, but I'm fine again now.

armchairexpert

Back to rain and hail and cold. Soaked to the bone walking Doggie yesterday. Today's only slightly better, and we're back to having toileting issues with her: she doesn't like the rain, and she would rather go inside the house than out into it. I'm trying to keep an eye on her all the time, but she's good at picking a stealthy moment to go do her thing where it oughtn't be done. I have a call in with a dog trainer who can hopefully help, and in the meantime I'm going to have to roll up all my rugs and do a lot of cleaning. She's very sweet, but I wish I'd been better prepared for the work involved.

Money-wise nothing is happening. Changing all the bank accounts around has caused all sorts of annoying issues with auto-debits bouncing back and forward waiting to be sorted out. Some of my income comes via Paypal, and I can't access it until they've confirmed the new accounts which might take a while. That sort of thing. But there's very little spending going on amongst all this, at least.

shangaijimmy

Whe'd had an offset mortgage for about 8years and i really liked seeing everything in one place and seeing the effect of savings against mortgage interest. When we switched to a standard repayment and had to split things up it did take a few months to get used to things being in seperate places. And at times i do 'forget' where everything is for a few moments!!

armchairexpert

I've had offset/redraw mortgages since I first bought a house, but it's never been two separate accounts - i.e., an offset transaction and a mortgage - but always just one. They're good if you're disciplined, and if your income exceeds your outgoings by quite a lot, but in these last couple of years it hasn't worked for us well. Things are a lot tighter now, and it's hard to properly see where all the money is going. We just got used to having what was effectively a bottomless line of credit.

To add to that, we also put everything on the credit card and have it set to autopay monthly, but it only pays off the previous months' balance. So at the end of July it pays off June. That makes sense - the money sits in the offset account for a month longer - but it also reduces visibility of spending because the impact of overspending on the mortgage is delayed by a month. It was easy to go "oh, well, that month we had a few extra expenses, I'm sure this month's been better".

YNAB has helped enormously, but I'm also pleased that the mortgage structure has changed. Now, whatever the mortgage balance is, is the mortgage balance. I can redraw against it if I need to, but I'm not constantly seeing income and outgoings run through that account. Before, the mortgage balance was basically always false because it included money that was earmarked for future spending.

Sorry, that was a far longer reply than I intended!

Tahlullah

I guess the issue was, as you said, everything in one account. My offset mortgage has 8 separate accounts which are all linked for the offset, but they are all independent of each other. So the mortgages(1 and 2) have their own accounts, as does the bills accounts, spending money etc. It is the best of both worlds, in that payments and over payments can be seen instantly and credited to whichever mortgage account I choose, but any money in the other bank accounts offset the interest owed.

I guess you don't have First Direct in Australia. Doesn't matter, you have made the right decision for you. It gives you clarity, still with the bottomless overdraft facility if you need it.

Shanghaijimmy, with 8 accounts (which is contrary to what YNAB suggests) I often have to stop and think - what is this account for again? - It's a shame that Banks don't allow you to personalise your accounts with their own names. It would be better if we could label them 'mortgage' and 'bills' and 'savings' rather thank a string of numbers.

Tx

greent

Tahlullah wrote: »

I guess the issue was, as you said, everything in one account. My offset mortgage has 8 separate accounts which are all linked for the offset, but they are all independent of each other. So the mortgages(1 and 2) have their own accounts, as does the bills accounts, spending money etc. It is the best of both worlds, in that payments and over payments can be seen instantly and credited to whichever mortgage account I choose, but any money in the other bank accounts offset the interest owed.

I guess you don't have First Direct in Australia. Doesn't matter, you have made the right decision for you. It gives you clarity, still with the bottomless overdraft facility if you need it.

Shanghaijimmy, with 8 accounts (which is contrary to what YNAB suggests) I often have to stop and think - what is this account for again? - It's a shame that Banks don't allow you to personalise your accounts with their own names. It would be better if we could label them 'mortgage' and 'bills' and 'savings' rather thank a string of numbers.

Tx

Barc1ays and Ll0yds do - my online banking has labels such as 'Kitchen Fund', 'Holiday Savings', 'Car account' etc


Am guessing your account , ae, is more akin to the Virgin1 account? I was always put off one of those by the thought of having my cheque account have such a large debit balance - and the need to be totally disciplined to ensure steady repayment!

Tahlullah

Can I say, that for the first time in living memory, I actually believe another bank has facilities that are superior to First Direct! Thank you for that greent. But I'm not going to change my bank. I will just have to rely on memory and the hope that FD adopt this practice.

T

armchairexpert

I actually have TEN accounts all up!

1. Mortgage on my house
2. Mortgage on my mum's unit
3. Transaction account which offsets the unit (long story why it's that one, but doesn't matter because anything i save in interest on Account 2 I manually move over to Account 1) - this is where both salaries go and all expenses come out of.
4. Long-term savings account - this is the one that we empty Princess Pig into a couple of times a year, and when it gets to $2K (might take years, tbh) we buy some shares
5. and 6. Business accounts from my two partnerships - both of these are joint, each with another person
7. and 8. Savings accounts linked to the business accounts, where I put aside GST, which is goods and services tax that I charge on invoices and gets remitted straight to govt.
9. My personal business account - so the partnership pays me into this account, and then I pay myself a salary out of it.
10. My personal business tax savings account where I put aside income tax.

The only thing that's changed is that Accounts 1 and 3 used to be a single account!