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PinknSparkly's Mortgage Wannabe savings dairy

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  • gallygirl
    gallygirl Posts: 17,228 Forumite
    Name Dropper First Anniversary First Post Mortgage-free Glee!
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    If you think you will overly worry about what might happen then go ahead with your plan. Sometimes the best thing to do financially is not always the right thing to do for you and your plan is very sensible and balanced :T.
    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"
  • pinknsparkly
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    Thanks both, I need to do some serious thinking about this one. I've done some calculations and with our regular mortgage repayments, we will hit 60% LTV by the time we come to remortgage in 5 years time (assuming the value of our property doesn't increase, which I'm hoping is unlikely, especially given that we live in the south east and close to London!). Which would put us in the best possible position for remortgaging.

    I'm going to put the decision-making on hold until after Christmas and come back to it. However, leaving aside my fears of a stock market crash coinciding with a rise interest rates, the main argument I keep seeing for paying off mortgage over investing (excluding the tax benefits that you can get in the US) is the idea that you are more likely to commit to overpaying the mortgage than investing that money. Which is not an issue I feel I have - I would view regular investments as the equivalent of mortgage OPs (i.e. savings that could be used to pay off the mortgage if needed) and so would be just as committed to them as if they were going directly towards reducing the mortgage.

    I'm leaning towards only making small mortgage OPs in 2019 (i.e. cashback payments etc) to the mortgage, and keeping the £500/month "OPs" in reg savers instead of investing (so I can make a lump sum OP at the end of the year if I find I worry too much). I really appreciate you guys sanity checking me - my husband is very laid back and quite happy for me to be in charge of our money, but on the flip side he also has absolutely ZERO interest in learning about and discussing the options!
    MFW2023 challenge #99: £1090.11 / £1,000 MFiT-T6 (Jan 2022 - Jan 2025) challenge #99: Reduce mortgage to £400,000. Current balance = £413,551.19 Initial MF date (23rd Aug 2022): Sep 2051 Current MF date: Jul 2051 Last updated: 15/06/2023
  • Poppycat1
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    Congratulations on getting the mortgage sorted and the over payments. :j:j:j:j:j:j:j:j:j:j:j:j:j

    I feel the same as you re mortgage vs investing. I have decided that this coming year will be an investing year. I am in my late forties so have less time for the money to work for me. I'm finding it really difficult though, I've a bit of extra money in my account (change of goals) and i'm itching to pay it off the mortgage.

    Do you think setting your goal as mortgage neutral would make it easier? That's the way I'm seeing it.
    Without overpayments: 15 years, 1 monthsBecause of overpayments: 10 years, 10 months left until paid off
  • pinknsparkly
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    Thanks Poppycat - I know exactly what you mean about having extra money available and itching to pay it off against the mortgage!! I've got a very generous amount of money sitting in savings at the moment, left to me by my grandparents who passed away recently. We've decided to keep it for house improvements and to finance having a baby/compensating for reduced income, but the temptation to throw every penny at the mortgage is still huge!

    I've vaguely heard of the idea of mortgage neutrality - I think there's a user on the MFW board who has a diary called exactly that! I do like the idea of that, I'm very numbers-oriented and think if I set myself up a spreadsheet focusing on increasing my net worth rather than specifically reducing my mortgage then I could quite happily throw money into stocks and shares instead of mortgage OPs. I've also found that sending little bits and bobs to the mortgage here and there that would otherwise just get frittered away (lol, I've literally had a mortgage for 6 days and have already been getting very excited about paying money off it!) I feel like I am actively making OPs. I think I'm going to give investing a go (only a small amount to start with, I will increase that as my regular savers finish throughout the year) and see how I feel about it in a years time.

    Ultimately, what I want is financial freedom and the option of early retirement/reducing working hours/taking extended periods of time off work and that requires more than just having zero mortgage - it also requires an income of some description!
    MFW2023 challenge #99: £1090.11 / £1,000 MFiT-T6 (Jan 2022 - Jan 2025) challenge #99: Reduce mortgage to £400,000. Current balance = £413,551.19 Initial MF date (23rd Aug 2022): Sep 2051 Current MF date: Jul 2051 Last updated: 15/06/2023
  • savingwannabe
    savingwannabe Posts: 16,610 Forumite
    First Anniversary First Post
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    Mortgage neutrality sounds great. Retiring early is fab too. I wish I had tried these earlier and it's great that you are Pinky. What a great future you have ahead of you.

    I hope you had a great Christmas and have a great new year.
    Aiming for a minimal spend 2022
  • pinknsparkly
    pinknsparkly Posts: 542 Forumite
    First Anniversary First Post Name Dropper
    edited 2 January 2019 at 7:43PM
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    Thanks SW! We had a lovely Xmas and New Year, despite having to work Xmas eve AND NYE...! Hope you had a restful and peaceful break and are ready for 2019 :dance:

    I've made the decision that we will both open S&S LISAs (I'll open one this year and fill it, then open one for my husband in April as he had a cash LISA for buying our house) for our FIRE savings (aiming for £12,000 per year) and also open a S&S ISA each. We need to make "mortgage OPs" of £500 a month, or £6000 a year, to be mortgage free (or mortgage neutral as I'm now aiming for) by the time I'm 50. At the moment we are fortunate enough to be able to save £2k/month which I intend to split up into the following pots:

    £333.33 into my LISA for FIRE savings
    £333.33 into my husband's LISA for FIRE savings
    £500 into S&S ISA for mortgage neutrality
    £833.34 into S&S ISA for FIRE savings (I'll round it up to £850!)

    I am currently debating which providers to save with, and which funds to go for. I am tending towards something like the Vanguard LifeStrategy 100 fund / Blackrock Consensus 100 fund but need to do some more reading, including into HSBC Global and L&G Multi-Asset funds which I believe are also similar. And work out which is the cheapest combination of ISA/LISA provider and fund! I have read some threads on Reddit which make the argument that if you're going for LifeStrategy 100 rather than 80 (or lower), i.e. 100% stocks, then it would be cheaper to buy a Developed World and a Developing World tracker fund instead. I think I'll post something on the MSE Investing board and then just start, because I can go round and round in circles until the cows come home trying to work out which option is "best" but at the end of the day: none of the options are all pros and no cons!!

    Edited to add:

    You may also notice that despite saying all the above, I've still made some mortgage OPs this month..... This is because I have set our monthly mortgage payment to a nice round £750/month (a humungus £12 something OP) and have also been Tilly Tidying various current and savings accounts. I intend to continue doing this throughout the lifetime of my mortgage (plus sending over any cashback etc) to help chip away at it gradually in addition to building up my FIRE/mortgage neutrality pots.
    MFW2023 challenge #99: £1090.11 / £1,000 MFiT-T6 (Jan 2022 - Jan 2025) challenge #99: Reduce mortgage to £400,000. Current balance = £413,551.19 Initial MF date (23rd Aug 2022): Sep 2051 Current MF date: Jul 2051 Last updated: 15/06/2023
  • pinknsparkly
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    Made a few more teeny tiny mortgage OPs from Tilly Tidies. Then I realised I'd not cancelled our SO for our rent so that's going out on today on top of our first mortgage payment that we paid on 2nd January (which was almost £300 more than it will be normally due to needing to cover the interest accrued in December). Gulp!!! Fortunately, our landlords are my parents so as soon as the money reaches them they've said they'll send it back.

    On the plus side, the reason I noticed the SO in the first place was because I logged onto internet banking to pay them our share of the cost of the villa they're renting in the south of Spain for a week over Easter. I need to book flights next week but return flights are £58 each with RyanAir :eek: That's less than I was paying for an off-peak student discount return train ticket to visit my (now) husband every third weekend back in 2013!!! It'll be lovely to have (most) of the family all in one place, especially as I didn't manage to make it up to see them over the Xmas break :( And I'm also considering trying out a Sun (the newspaper) £9.50 holiday this year. We've never done one before, but even with the extras you have to pay it should still be less than £50 for a long weekend/mid-week getaway for us to look forward to.
    MFW2023 challenge #99: £1090.11 / £1,000 MFiT-T6 (Jan 2022 - Jan 2025) challenge #99: Reduce mortgage to £400,000. Current balance = £413,551.19 Initial MF date (23rd Aug 2022): Sep 2051 Current MF date: Jul 2051 Last updated: 15/06/2023
  • pinknsparkly
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    Also, I saw a thread on here earlier by a poster complaining about people not thanking other people for responding to their posts. I had noticed the "thanks" button on here but don't think I really ever use it - I tend to thank people directly instead. So, I'm going to try being better at using the "Thanks" button and apologise if I've seemed ungrateful to any of you for not "pushing your button". I do genuinely massively appreciate any and all responses I get on here!
    MFW2023 challenge #99: £1090.11 / £1,000 MFiT-T6 (Jan 2022 - Jan 2025) challenge #99: Reduce mortgage to £400,000. Current balance = £413,551.19 Initial MF date (23rd Aug 2022): Sep 2051 Current MF date: Jul 2051 Last updated: 15/06/2023
  • savingwannabe
    savingwannabe Posts: 16,610 Forumite
    First Anniversary First Post
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    It's great that you will get a quick refund of your rent payment!

    Blimey how organised are you??? Really well done on having such a great savings strategy. I really do applaud you!!!

    I don't even know what these fund things are. My money is just in ISAs and basic savings account. I need to find out more.

    PS My advice is please don't let anyone force you do press 'thanks', I don't know who said it but it is a bit arrogant. Just do what you feel comfy with. Your thread is so nice and refreshing to read we should be thanking you. lol. :rotfl::rotfl::rotfl::rotfl:
    Aiming for a minimal spend 2022
  • Skint_yet_Again
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    Pink please don't feel pressured to press the thanks button on here. Its a personal choice and I'm sure no one would take offense if you pressed it or not. I use it sometimes as a bookmark so I know where I've read up to :rotfl:
    0% credit card £1360 & 0% Car Loan £7500 ~ paid in full JAN 2020 = NOW DEBT FREE 🤗
    House sale OCT 2022 = NOW MORTGAGE FREE 🤗
    House purchase completed FEB 2023 🥳🍾 Left work. 🤗

    Retired at 55 & now living off the equity £10k a year (until pensions start at 60 & 67).

    Previous Savings diary https://forums.moneysavingexpert.com/discussion/5597938/get-a-grip/p1

    Living off savings diary
    https://forums.moneysavingexpert.com/discussion/6429003/escape-to-the-country-living-off-savings/p1
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