Balancing multiple goals

RichyRich

Milestones seem so far away! Today's mortgage balance is £207,175.15 which includes June's contractual payment but not the overpayment which I've yet to make - I'll make it a little later in the month as some direct debit amounts are changing and I don't want to go overdrawn by overpaying the wrong amount.

We've not upped the overpayment amount yet as we've had a fairly spendy few months which have been a mixture of unavoidable and indulgent. I keep telling myself that things will settle down and then we start looking at what we want to do for holidays next year :mad:

Overpayments continue at around the £700 per month mark and, despite spending more than we should, haven't been compromised on. We're still on track to be below £200k by Christmas but, my word, £200k is a lot of money. I'm not even sure that getting to that level will make me feel better as it seems like such an insurmountable sum.

All that is keeping me going is the thought that with every overpayment more of the next payment goes toward the principal so we should see increasing rates of return going forward.

We are playing a long game and I know that in the long run it will be worth it, but right now it feels like such a grind - I think I'll go and play with the overpayment calculator to see if I can find a milestone to look forward to :rotfl:

Keep up the good work all. Here's hoping I'll be in a happier place for the next update!

VDOT47

Rich - your numbers are different, but your situation sounds quite similar to ours. I constantly switch from thinking the priority is to pay as much as possible off the mortgage, to then thinking I should put more into savings and then thinking I should increase pension contributions! I think that the approach suggested above of working on all three at whatever level seems the most sensible at the time is the best advice!


Good luck, and keep chipping away!

RichyRich

BIG milestone today.

I've been making monthly overpayments of £700+ religiously since March 2017 and, today, the overpayment I made yesterday is showing on my account.

Current balance: £199,600.73.

I have breached the £200k barrier!

It's not been without its challenges: not least an unreasonable service charge increase and unexpected legal fees, but I've finally got to a milestone that feels tangible (well, as much as any arbitrary target can be tangible!)

There is still work to be done, of course, but I wanted to be sub £200k by the end of the year and I have done it with a month to spare. It's a double celebration too as I start a new job tomorrow.

My fixed rate finishes in March so I'll start looking at the market over December. I'm really hoping that my current lender has some good retention deals, to avoid the hassle of remortgaging, but que cera cera. If we have to move we will move, but the truth is that I'm happy with Nationwide so I do hope they remain competitive.

Cheers!
Rich

Mortgage_Minimiser

HI,

I'm with Nationwide as well, and I love the ease with which you can overpay, no minimum amount and always 10% of the original loan. I think it's worth a little more tbh.

I remortgaged 2 weeks ago on 1.99 for a five year fix and my mortgage balance is similar to yours @ 191k. I can still OP 24,375 though, which is 10% of my original mortgage.

I always find it better to go in and speak to them.

Good luck with the remortgage!

MM
x

RichyRich

Hi MM

I agree - the 10% being calculated by reference to the original balance is a boon and something I'd lose if I switched away. When we last did a product switch we did it by video link in one of the branches and it worked really well tbh - but I'd already found that Nationwide was the most competitive before I went down. I wouldn't necessarily just go down next time - I'd always do my research as to w hats on the market first.

Here's to being mortgage free (one day!) :beer:

Cheers

glass_half_full

Hi RR,
Congrats on getting under £200k!
The title of you diary caught my eye. I can relate to the challenge of balancing the various goals. I go round them (pension, mortgage, savings etc) and then decide to balance across them. Plus trying not to sacrifice today too much for tomorrow. I think one of the challenges is that sometimes the goals are so far away they don’t feel real. However, one thing I will say, and that is your future self will thank you for what you are doing now. I am 52 and so retirement is now within an imaginable time frame, and I am so glad I started with AVCs 25 years ago when I couldn’t imagine ever reaching retirement!
Good luck with your plans.

lippy1923

Congrats on breaking the £200k mark.

I feel your struggle with finding the right balance. For me I have now found the right balance is to overpay and save at the same rate. So I always aim to OP at least £500 per month which means my savings should ideally increase by this much.
Pension is quite far from my mind tbh. My employer pays 8% and I pay only 5% but I am not overly fussed as I have the same concerns mentioned about actually being able to draw my pensions. I'm still in my 20's so I will probs be in my 60's before I'm allowed to take my own money. Way into my 70's for state pension.... if that even exists then at all!

RichyRich

Lippy, that's one of my concerns too. On the one hand I'm desperate to put money into my pension because I'm saving tax at 40%, but I'm so reluctant to do it because the age at which I will be able to withdraw is at the whim of this and future governments. I am OK with 55, but less OK with "55 now but maybe older later". I need certainty, hence the parallel ISA.

RichyRich

I'm 33, FWIW.

lippy1923

You still sound like you're putting in a good % but there's def more incentive to topping up the pension if you're in the 40% tax bracket.

I don't think it really matters too much what you decide to do (pension, overpay mortgage, savings, investments) as its not set in stone and you can always swap and change to suit.

It's a nice problem to have. At least you are not throwing your money down the drain or getting into debt. Keep us updated whatever you do, its always motivating to keep track on here