FinancialBliss: My mortgage free journey…

financialbliss

Hi back FFP,:hello:

Thanks for popping in and saying hello. Feel free to contribute at any time. I try very hard not to judge, as people typically post only a very small window of information about themselves to these forums, so unless someone wants a specific answer to a question they pose, I’ll just digest any information given out…

Your own mortgage free date. In about 12 years time Well you asked – I’d go for 1st September 2021. That’s about 12 years away. Why then? 1/9/2021 or nineteen, twenty, twenty one. Easy date to remember. Perhaps I should get out more?

Our first mortgage was taken out when I was 26 on a 25 year term. This would have completed in 2021 too. However we up-sized and despite putting 105k down on our current home, to make our present mortgage affordable on one wage, we had to go for another 25 year term pushing the completion date back to 2029 – when I would be 59.

It can at times seem like a massive uphill struggle, but it can be done. You just have to be sensible about what you spend your money on, try to get better deals, eg insurance for less, cut out the excesses - you know the sort of stuff - it's been mentioned many times before on here, but also do live a little too.

Why the urge to be mortgage free? Our first mortgage was interest only with an endowment repayment vehicle. Despite going for a 2 year initial fixed rate at an exceptionally low rate (for the 1990’s), the product had an overhang (if that’s the right term – can’t remember, not one of my better financial decisions), meaning that we were locked in to the mortgage provider for a further 4 years :eek: and weren’t allowed to pay off any capital either.

So we saved up and paid off 50% of the mortgage as soon as we possibly could and eventually got it down to ~4k.

Was quite keen to rectify this mistake – that was probably the initial driving force for the first mortgage. Second mortgage – I didn’t want to be mortgage free at 59.

How to keep yourself motivated? Photo your house, divide it up and cross out a block each time you reach a milestone, do graphs, track your interest, start a diary…, join the mortgage free in three take 2 challenge (MFiT-T2) , whatever floats your boat.

Thanks,

Financial Bliss.

StuartGMC

financialbliss wrote: »

. Second mortgage – I didn’t want to be mortgage free at 59.

FB, you definitely need to get out more as your OH said; I think you meant you didn't want to have to wait until 59 to be mortgage-free?

I jest because you are usually so precise in the detail you offer here.

It's interesting in the present situation considering interest rates that those of us with mortgages were faced with in the early-mid 1990s. Of course, once these dropped the lenders lost income so dreamed up the clever ploy of "affordability" i.e. at 8% interest rate you paid £900 a month, but with interest rates of 4% just look at what £900 per month can get you in terms of a mortgage....

... well actually it got you the same sized property it did when interest rates were 8% because it just raised the multiples of salary demanded of first time buyers etc.

So I'll pin my colours to the mast and blame the lenders for the house-price boom.

However, I do know in 1994 we had quotes at prevailing 8% interest rate and statuary +2% (i.e. 10%) and we demanded to know repayment costs at 13% a typical figure for the preceding 15yrs or so, to understand our ability to cope in the absence of a pay rise. How many people are presently asking what repayments would be if rates were 8% I wonder so they know their tolerance for increases in the absence of a pay rise?

....sorry I've rambled on too long

financialbliss

StuartGMC wrote: »

I think you meant you didn't want to have to wait until 59 to be mortgage-free?

I jest because you are usually so precise in the detail you offer here.

Oops

Yes - didn't want to wait until I was 59 to be mortgage free. Tired this evening, which begs the question - why am I still here?

StuartGMC wrote: »

So I'll pin my colours to the mast and blame the lenders for the house-price boom.

I'd concur. Debt fuelled bubble. It had to burst. Surprised it took this long! Anyone for a 125% mortgage - 100% mortgage and 25% unsecured loan, or perhaps a mortgage at 5 times your salary. Not in the current economic climate.

StuartGMC wrote: »

However, I do know in 1994 we had quotes at prevailing 8% interest rate and statuary +2% (i.e. 10%) and we demanded to know repayment costs at 13% a typical figure for the preceding 15yrs or so, to understand our ability to cope in the absence of a pay rise. How many people are presently asking what repayments would be if rates were 8% I wonder so they know their tolerance for increases in the absence of a pay rise?

Base rates went up 0.5% to 5.75% on 12/09/1994 and up another 0.5% on 07/12/1994 to 5.75%

I wonder how much pain we're going to feel in 2010 / 2011 onwards when the base rate starts climbing back up towards the 5%+ mark after we have got used to these lower mortgage payments / rates?

Now if that's ever a reason to pay down your debts...

FB.

setmefree2

fiddling_flower_petals wrote: »

How I'm going to stay motivated for another 12 years, is another question? Any ideas anybody?

It's addictive LOL:rotfl:so that bit is easy. Question is what will we all do when it's over?

setmefree2

financialbliss wrote: »

I wonder how much pain we're going to feel in 2010 / 2011 onwards when the base rate starts climbing back up towards the 5%+ mark after we have got used to these lower mortgage payments / rates?

Now if that's ever a reason to pay down your debts...

FB.

Too true

Little_Mama

financialbliss wrote: »

Base rates went up 0.5% to 5.75% on 12/09/1994 and up another 0.5% on 07/12/1994 to 5.75%

I wonder how much pain we're going to feel in 2010 / 2011 onwards when the base rate starts climbing back up towards the 5%+ mark after we have got used to these lower mortgage payments / rates?

Never as much pain as when I was paying 15.8% on an interest only mortgage with negative equity of 40% of the original (1989 bubble) purchase price back in 1992. Having survived through that I will never pay anyone another penny interest more than I have to.

LM

fiddling_flower_petals

financialbliss wrote: »

Hi back FFP,:hello:

Thanks for popping in and saying hello. Feel free to contribute at any time. I try very hard not to judge, as people typically post only a very small window of information about themselves to these forums, so unless someone wants a specific answer to a question they pose, I’ll just digest any information given out…

Your own mortgage free date. In about 12 years time Well you asked – I’d go for 1st September 2021. That’s about 12 years away. Why then? 1/9/2021 or nineteen, twenty, twenty one. Easy date to remember. Perhaps I should get out more?

Thanks,

Financial Bliss.

Thanks for the warm welcome to your thread, and the end date suggestion.

Like you, our first mortgage on our first property was IO and started in 1996, we moved to our current home in 2004 with a bigger mortgage(part repayment/part IO) and extended our term to 25 years:mad: , because I wanted to return to work part time following birth of DD. So I suppose it was always my intention to trim the odd year here and there, at the end of each product term. Which I haven't committed to yet, as mortgage deals have been fully flexible allowing upto 10% overpayment and a draw back facility too.

Must admit I'm a little bit of a number and spreadsheet [STRIKE]freek[/STRIKE] person and quite liked your suggestion on 1/9/2021 but really would like to complete mortgage when the endownment policy matures on 22/03/2021(fingers crossed).I massively devalued what this investment would achieve when I remortgaged, and could have kicked myself for not checking out the surrender value a year ago, when I first joined MSE, so I'll keep a close eye on this investment.

fiddling_flower_petals

setmefree2 wrote: »

It's addictive LOL:rotfl:so that bit is easy. Question is what will we all do when it's over?

Hi smf2

I've started reading your diary too, but haven't got round to finishing, so haven't posted yet.

Very addictive, I'm now sad enough to confess, not only do I have a regular OP set up but monitor mortgage online and have recently [strike]due to mortgage OCD[/strike] started to make additional payments to round down the figures. Fortunately online mortgage figure only adjusts once a month or if additional payment are made, although interest is charged daily. I'd be in a terrible state if daily interest was applied to online balance everyday:rotfl: , although it wouldn't hurt my MFW quest.

As to what I'll do when MF, if I achieve 2021 DD will be 16 and DS 14, so I suppose we'll have a couple of years before DD and DS are old enough to go to uni( hopefully, no pressure kids if you ever get round to reading this,but Mummy and Daddy think furthering your education is very important). After that who knows, houses, weddings and grandchildren.:eek: Eek I almost saw my life flash in front of me.

SmileyG_2

Little_Mama wrote: »

Never as much pain as when I was paying 15.8% on an interest only mortgage with negative equity of 40% of the original (1989 bubble) purchase price back in 1992. Having survived through that I will never pay anyone another penny interest more than I have to.

LM

God, I remember that.........

and I felt smug because my fixed rate was 12.75% (and my company was subsidising 2.75% of that!).

People were railroading me into the property market at the peak (1989) and I had negative equity for 11 years!

It certainly focusses you to treat amortgage as a debt and not a cash cow!

SmileyG

StuartGMC

SmileyG
I think those hit by that recession, whether on or kept of the housing ladder, have primarily been the ones being "cautious" since and to wish to clear the mortgages quickly with overpayment etc and as you note, see it as a debt (on your home, BTL is I think different in that context, not that I have one!)