FinancialBliss: My mortgage free journey…

financialbliss

Normally I take our electric and gas readings and supply to Scottish Power. In doing so, I'm getting a direct debit that closely matches our usage and last month, they dropped it slightly from £69.00 a month to £62.00 per month (combined DD for both electric and gas). So, with my meter readings taken on the first, I've just got around to putting up the November stats as follows:

Electric (Units / Cost):

• January: 331 / 36.04
• February: 313 / 33.77
• March: 295 / 32.90
• April: 268 / 30.31
• May: 251 / 29.05
• June: 239 / 27.78
• July: 209 / 25.39
• August: 258 / 29.66
• September: 275 / 30.09
• October: 316 / 34.18
• November: 315 / 33.97

Gas (Units / Cost):

• January: 65 / 68.22
• February: 55 / 57.53
• March: 42 / 45.49
• April: 23 / 27.34
• May: 14 / 19.07
• June: 9 / 14.23
• July: 6 / 11.59
• August: 8 / 13.38
• September: 10 / 14.51
• October: 21 / 27.53
• November: 41 / 50.93

Total, ie Electric and Gas (Units / Cost / Balance)

• January: 396 / 104.26 / 22.75
• February: 368 / 91.31 / 8.45
• March: 337 / 78.39 / 7.06
• April: 291 / 57.65 / 26.41
• May: 265 / 48.12 / 47.29
• June: 248 / 42.01 / 74.28
• July: 215 / 36.98 / 106.30
• August: 266 / 43.04 / 132.26
• September: 285 / 44.60 / 156.66
• October: 337 / 61.71 / 156.95
• November: 356 / 84.90 / 134.05

Slightly under on electric, but about double on the gas :eek: Still, we're still in credit by £134.05.

House price index data has been updated, so that's coming up next...

FB.

financialbliss

House price index data as promised - year to date to November:

2008 year end house value: 232,022.54

Month: Change / Value / LTV

January: 1,990.83 / 234,013.37 / 24.94%
February: 859.68 / 233,153.69 / 24.63%
March: 3,167.24 / 229,986.45 / 24.65%
April: 135.73 / 230,122.18 / 24.20%
May: 5,474.79 / 235,596.97 / 23.29%
June: 3,031.50 / 232,565.47 / 23.18%
July: 2,760.01 / 235,325.48 / 22.55%
August: 1,809.84 / 237,135.32 / 22.12%
September: 4,253.14 / 241,388.46 / 21.28%
October: 859.67 / 242,248.13 / 20.83%
November: 271.47 / 242,519.60 / 20.53%

Another modest increase for November - but this means our house has theoretically gone up by about £10,500 this year. I do this purely for mathematical interest - not intending on selling any time soon!

FB.

financialbliss

It’s 12/12/09 – this means it’s exactly 3 years today until I (and now a few more thanks to the MFiT-T2 challenge) hope to be mortgage free.

My mortgage balance today is exactly £48,383.00, which I’ve updated on the MFiT-T2 challenge as my starting value.

So how is it currently looking against my 12/12/12 goal?
As I’ve absolutely no idea where the BoE base rate is going over the next 3 years, once we come off our 4.79% fix in March 2011, so I’ve played safe and for the purposes of projecting put us on a theoretical 7% for the remainder of 2011, then adding 1% per year until mortgage free, ie 8% in 2012, 9% in 2013, 10% in 2014 etc. Note that the Nationwide standard variable rate is currently 2.5%

So providing I pay £1,100 to the mortgage each and every month until it is cleared, I can say with a fair degree of certainty that I will be mortgage free in…

February 2014.

Unfortunately, in order to hit the 12/12/12 goal, I’d need to pay £1,464.30 a month, which means I have a shortfall of £364.30, every month.

Going to be fun over the next 36 months as I aim to bring forward this mortgage free date!

Financial Bliss.

setmefree2

FB

gallygirl

financialbliss wrote: »

So how is it currently looking against my 12/12/12 goal?
As I’ve absolutely no idea where the BoE base rate is going over the next 3 years, once we come off our 4.79% fix in March 2011, so I’ve played safe and for the purposes of projecting put us on a theoretical 7% for the remainder of 2011, then adding 1% per year until mortgage free, ie 8% in 2012, 9% in 2013, 10% in 2014 etc. Note that the Nationwide standard variable rate is currently 2.5%

So providing I pay £1,100 to the mortgage each and every month until it is cleared, I can say with a fair degree of certainty that I will be mortgage free in…

February 2014.

Unfortunately, in order to hit the 12/12/12 goal, I’d need to pay £1,464.30 a month, which means I have a shortfall of £364.30, every month.

I think you have erred well on the side of safety FB & your £1,100 payment will eat into capital much more than planned :T

LouiseJ

*Knocks gently and pokes head around door sheepishly*:o

I thought I would pop in to see how you are getting on.

financialbliss

Quick update...

Green Flag. Breakdown cover from July has finally tracked / validated in QuidCo, who report I should get the £25 cash back at the end of this month.

Mortgage year end balance. I overpaid £3.50 last week, estimating that for the remainder of the year, I'd need to pay about 4 or 5 pence on the 29th or 30th December to hit a round year end mortgage value of £48,500. Turns out that my daily interest is slightly less than I anticipated and I may end up below £48,500 without any further payments - interest and fractions of a penny. I may end up with a year end value of £48,499.96 - ie 4p below. :rolleyes:

Imeasure. I've this week registered with imeasure (http://www.imeasure.co.uk), with the intent of supplying electric, gas and water meter readings weekly. Simple enough to do on a weekly basis and should give us an idea if we're about average, above or below as you get compared to other similar households.

FB.

financialbliss

Copy of post in mortgages and endowments board:

I normally just lurk in this mortgages and endowments board – I have a mortgage free diary in the mortgage free wannabe board, but I thought I’d post this here for wider coverage on the question (I’m also posting this in my diary).

Background.

• I have a repayment mortgage with Nationwide – 5 year fix at 4.79%. This now has just 15 months of the fix remaining (Jan ’10 to Mar ’11).
• I have already overpaid about £21,500 and can borrow this overpayment reserve back from Nationwide if required.
• I’m expecting to start 2010 with a mortgage balance of £48,500.
• If I do not re-mortgage to another provider, I’ll drop onto the Nationwide BMR at 2% above BoE rate, ie BMR rate of currently 2.5%
• Savings are split between Nationwide eSavings (0.45 nought point four five percent) and Egg savings at 3.25% (may well be lower now) – total about £9k. Could argue that I have about £30k in savings (£9k + £21,500 in the mortgage account as an offset that I can get back, but not so easily).
• No other credit / debt except mortgage and not expecting to make any large purchases in the next 36 months.

Objective
I aim to clear my mortgage on or before 12/12/12.

I have recently been paying around £1,025 (standard payment £898.03) and from January ’10 I was going to up the total payment to £1,100 (£898.03 + £201.97 OP) – about the ceiling of what I can afford per month without dipping into savings.

However, faced with low savings rates, I’ve been pondering over making the full £500 overpayment that Nationwide allows, ie £898.03 + £500.00 = £1,398.03 for the 15 months I have left on the fixed rate.

This extra £300 / month would need to come from savings - £300 x 15, ie £4,500.

I’ve gave some numbers here:
http://spreadsheets.google.com/pub?k...S9TpuKCw&gid=1

Note: To place “safe” regarding interest rates, I’ve put myself on a 7% mortgage rate from April 2011, then added 1% per year until the mortgage is cleared. Hopefully a worst case scenario and won’t be any worse than that.


Left block shows continuous payment of £1,100 until the mortgage is cleared – March 2014.

Right block shows full £500 overpayment from Jan ’10 to Mar ’11, reverting to £1,100 until the mortgage is cleared – September 2013.


Pros.

• I can reduce the term of the mortgage by 6 months.
• I can reduce the mortgage interest from £6,675 to £5,400 ie by about £1.275, ie making better use of savings.
• £500 is a voluntary OP – I can stop this at any time, ie I’ve not committed to shortening term / higher monthly payment excluding OP.
• Despite stopping £500 after 15 months, the compound interest effect still has a benefit for the remainder of the mortgage.

Cons.

• Higher risk strategy – approximately halving savings from £9k to £4.5k.
• Should I re-mortgage away from Nationwide, then the £21,500 + new £4,500 in Ops becomes inaccessible, but that would be the case anyway irrespective of an additional £4,500 in the pot.

Should I ramp up the overpayments to £500 or not?
Is there anything I’ve not thought about?
Anyone else been in a similar situation and what did you do?

Many thanks,
Financial Bliss.

uzubairu

I'm with Nationwide (on a fixed rate too - 4.79 for 10 years and 6.5 to go) and I've been moving some of my emergengy money to the Overpayment Reserve.

I've used up my cash ISA allowance, have some savings with egg @ 3.25% and can't get a better rate anywhere else so I've added £9K to the pot so far this year.
Having access to this money if/when we need it, but paying less interest on the mortgage in the mean time is why we've gone for that option.

I've already paid £850 this month and plan to pay another £130 tomorrow. Nationwide haven't charged us a single penny in fees all year even though every month the total overpayments have been over £500.

abouttimetoo

Hi FB

Sorry to hijack your thread with a techy question I'd like to post some graphs in my thread and I'm sure you've given instructions somewhere in your own thread as to how best to do this but i can't seem to find it again.

Any help gratefully appreciated

PS I don't post too often but follow your thread all the time, you're doing great! I'm going to spend some of my time off over christmas going through my plan as whilst I've forging ahead with my own OP's all year I feel I've got sidetracked a bit this year dabbling in shares and a couple of unexpected expenses so I want to see how this all stacks up against my MFW date

Am I allowed another PS? :rotfl:Just wanted to take the opportunity while I'm typing to say grateful thanks to the setting up of the MFiT T2 challenge, I made my first OP to it a couple of days ago and I'm really excited about it