FinancialBliss: My mortgage free journey…

setmefree2

I don't know anyone who is actively trying to be mortgage free at the moment, which is why I like MSE. I think if I talked about mortgages and money too much it would probably sound boring.

However, I do know plenty of people who save and invest. Presumably they could clear their mortgage at some point if they wanted?

I also know 2 different couples who were mortgage free when I met them about 15 years ago and they have influenced me. I remember thinking "I'd love to be like you" - I think it was the security of their situation that appealed to me.

Keep up the good work everyone

financialbliss

fiddling_flower_petals wrote: »

FB,

how acurate is the mortgage spreadsheet you mention in post 536, I've recreated the spreadsheet, and compared to my most recent mortgage payment and reduction in capital and I can't seem to get anything close to the spreadsheet.

Hi ffp,

It's reasonably accurate, but it depends on your interpretation of reasonable. I've just used the formula in that sheet to calculate my January mortgage interest and I've worked it out at 242.06. Also, I've just logged into my internet banking, took my latest interest amount, divided by 26 and multiplied by 31 to get a fair estimate from my mortgage account what the January interest will be. This came to 237.46.

There's a difference there of 4.60. Clearly, it's the calculation of interest that is the issue, but it should be reasonably accurate. Compares to 60k, 4.60 a month out isn't that much.

The main strength of this sheet is that you have 1 line per month, so if you want to pan forward over say, 3 or 4 years, then you only need replicate each row 36 or 48 times. I use this sheet for summary planning - where you can see a number of years on a single screen.

It could also be modified to calculate daily interest, but then you would have 365 lines instead of 12 lines per year. But short of contacting your mortgage provider and asking them for their mortgage account logic, it won't be spot on to the penny.

I could e-mail you a blank sheet if you wanted, not that I'm suggesting you've done it wrong mind you. PM me if you want a copy.

FB.

fiddling_flower_petals

financialbliss wrote: »

Hi ffp,

It's reasonably accurate, but it depends on your interpretation of reasonable. I've just used the formula in that sheet to calculate my January mortgage interest and I've worked it out at 242.06. Also, I've just logged into my internet banking, took my latest interest amount, divided by 26 and multiplied by 31 to get a fair estimate from my mortgage account what the January interest will be. This came to 237.46.

There's a difference there of 4.60. Clearly, it's the calculation of interest that is the issue, but it should be reasonably accurate. Compares to 60k, 4.60 a month out isn't that much.

The main strength of this sheet is that you have 1 line per month, so if you want to pan forward over say, 3 or 4 years, then you only need replicate each row 36 or 48 times. I use this sheet for summary planning - where you can see a number of years on a single screen.

It could also be modified to calculate daily interest, but then you would have 365 lines instead of 12 lines per year. But short of contacting your mortgage provider and asking them for their mortgage account logic, it won't be spot on to the penny.

I could e-mail you a blank sheet if you wanted, not that I'm suggesting you've done it wrong mind you. PM me if you want a copy.

FB.

Thanks,FB.

Using your spreadsheet end balance figures are out £70+, based on last month. I contacted the bank, who advised interest is applied at the begining of the month for the upcoming month, so your spreadsheet shouldn't be out this much. I will review of the next couple of months.

I'll PM my email address, if you don't mind forwarding your blank spreedsheet. Just as a double check against mine.

twix

financialbliss wrote: »

Hey, not just a newbie to my diary, but a newbie to MSE too. A very warm welcome from me. Hope you can learn a thing or two from the mortgage forum to help you in your mortgage reduction quest.

As you've mentioned a mortgage calculator, I've just drafted this up in word as I was creating the sheet in Excel.

Using this, you should be able to see how much monthly and daily interest and your net reduction each month.

I’ve never attempted to describe a spreadsheet before, but let’s have a try and see how many people get a useful calculator / analysis tool out of this…

Note: This sheet isn’t going to be 100% accurate – but, and it’s a big but, you can alter the rate, standard payments and overpayments on a month by month basis, so it’s flexible in use – much more so than the web based calculators

Fire up Excel or your favourite spreadsheet tool.

In cell A2 and continuing along the rows, ie A2, B2, C2, etc enter the following descriptions:

Year, Month, Days, Starting balance, Rate, Annual Interest, Monthly Interest, Daily Interest, Standard Payment, Overpayment, Total Payments, Net Reduction, Ending Balance.

For this sheet, I’m presuming you’re working from the start of the year, so…

In cell A3, enter 2008
In cell B3 enter 1, ie January
In cell C3, enter 31, ie number of days in January
In cell D3, enter the starting balance for the month
In cell E3, enter your mortgage interest rate, eg 5.49% should be entered as 5.49, not 0.0549
In cell F3, calculate the annual interest by entering =D3*(E3/100)
In cell G3, calculate the monthly interest by entering =F3/365*C3
In cell H3, calculate the daily interest by entering =F3/365
In cell I3, enter your standard monthly payment
In cell J3, enter any overpayments you’re making for that month
In cell K3, sum standard and overpayment to give total payment for month =I3+J3
In cell L3, determine your net monthly reduction (payment – interest) using =K3-G3
In cell M3, determine month end balance by using =D3+G3-K3

Ok, if I’ve not lost you yet, it’s simply a case of repeating the remainder of the year. This can be quickly be done by taking cells B3 thru M3, copying and pasting starting at B4. Once you’ve done this:

Change cell B4 to be =B3+1, 1 becomes 2, ie February.
Change cell C4 to be 28, or 29 if it’s a leap year!
Change starting balance to be =M3

Now copy cells B4 thru M4 again, and paste into B5, B6, B7 etc. Change the days in the month to suit until you get to cell B15, where you need to reset this to 1, plus put a 2009 in cell A15. Repeat until the point your mortgage balance in column M is zero!

There, it you followed my logic, you’ve got the beginnings of a sheet to do “what if’s” for mortgage payments.

If you do try this, or you have any problems with the above, please post back or PM me and I’ll try and help out…

Thanks,
Financial Bliss.

Hi Twix Here..
Can this be modified to project an Interest only loan, to calulate over payment on that situation. If so coudl you post how to do that.

twix

Hi Twix Here..
Can this be modified to project an Interest only loan, to calulate over payment on that situation. If so could you post how to do that. I have done the above and works very well.

financialbliss

twix wrote: »

Hi Twix Here..
Can this be modified to project an Interest only loan, to calculate over payment on that situation. If so could you post how to do that. I have done the above and works very well.

Hi twix,
Thanks for popping in. I've had a quick look at the existing sheet and there's not much at all to change to make it interest only.

Simply set the standard payment to the monthly interest - this then sets the normal monthly payment to just the interest on the debt. Only when you make an overpayment does the balance drop. That should do the trick.

I've been playing around with google docs. Here's a link to another sheet, ie not the one you picked above, that I've discussed earlier:

http://spreadsheets.google.com/pub?key=pVULvx3IkGyrSynVk5wVgFg&output=html

If you can see this, I'll make an effort to create the remaining sheets in google docs. Note that I've ticked the allow to view without logging in, so hopefully you won't need a google account, but I've not used google docs before - it's all new to me.

If you can't see this, if anyone can give a pointer as to where I'm going wrong, that would be most appreciated...

Also, I'd be curious to see if my e-mail address is disclosed as a result of this too!

FB.

StuartGMC

FB
I tried Googledocs when it launched related to sharing information in my voluntary activities in the community. I think you need to sign-in to observe the details and also edit? In my case, more due to the user mixture of volunteers than the online app itself, I wasn't able to get good traction in taking forward, but I have got a number of people using OpenOffice - at least we don't have issues on backwards file compatibility!

MFdream

Hi FB

I tried the spreadsheet when i saw your instruction in the forum. It works, and it is much easier now to see how my mortgage is progressing without further need to open the mortgage calculators in the web. :rolleyes: I have been addicted to mortgage rate calculators since i was doing some research before applying my mortgage.
Thanks.
MFdream

financialbliss

Wow. Didn't January go by fast? Well I certainly think it did!

If you've been following my diary over the last 12 months, you should have noticed that I'm keeping an independent tally of my mortgage interest and reporting this on the last day of each month, so I can determine monthly and daily interest.

Intending to continue this in 2009. So here's how it sits for January:

Year starting balance: 59,500.00

Month / Payment / Interest (per day) / Net reduction / Balance.

January: 1,200.00 / 237.37 (7.66) / 962.63 / 58,537.37

Totals (Payment / Interest / Net reduction):

Minimum: 1,200.00 / 237.37 / 962.63
Maximum: 1,200.00 / 237.37 / 962.63
Average: 1,200.00 / 237.37 / 962.63
Grand Total: 1,200.00 / 237.37 / 962.63

Compared to January 2008 where the interest was 9.03 per day, that's a nice drop!

Got funds in place for mortgage coming out tomorrow. Also intending to overpay tomorrow by 301.97 to up the standard mortgage payment of 898.03 to 1,200.00

Financial Bliss.

setmefree2

financialbliss wrote: »

Also intending to overpay tomorrow by 301.97 to up the standard mortgage payment of 898.03 to 1,200.00

Financial Bliss.

well done on that