Mortgage Free by 55

edinburgher

I would have said that the choice between debt and more equity vs. no debt and less equity will be inherently tied to a) your salary and b) any affordability calculations carried out by prospective lenders. That said, from my own experience of plootering about with "how much can I borrow?" calculators, debt does seem to have a disproportionate impact on how much financial institutions will lend you, no matter how "affordable" the minimum payments might seem. I do not think that their lending/risk models think along the lines of "I can bounce this from BT card to BT card for X years", I think they're based on "potential borrower has a debt - assume this must be paid off over X years". Their X is much shorter than yours, IYSWIM?

VDOT47

Yes, indeed! I think I have decided to pay one of the cards off before we move, and the other will be down to about £7k by then - if this seems to be affecting the amounts we can borrow from lenders at that stage I will think about paying the other card off rather than BT it.


As such, overpayments will reduce slightly over the next 18/24 months, while we prioritise having enough in savings to pay off one of the cards.

VDOT47

So, the monthly DD went out today. We pay £1200 each month, and the interest added is approx. £440 pcm at the moment, so today's payment should reduce the balance by £760 and bring it to approx. £244,140.


This month is looking very tight on funds, but I would love to make the £140 overpayment to get it down to £244k. Will have to look at my budgets to see if any can be spared, and also try to be super good at not spending too much over the next couple of weeks!

VDOT47

So the end of another month rolls around!


I had 2 weeks parental leave this month (unpaid) so the exact amount of salary I would receive this month was a bit of an unknown, but it actually came in a little higher than I had budgeted for, and we made some savings elsewhere during the month, so I managed to make an overpayment of £413.34 today.


Should see us below the £244k mark now, and will be close to £243k once the DD goes out (and interest gets added .....boo!) mid-month. If that is correct then, based on the purchase price of £374k, we would have edged just below 65% LTV! (243/374 - 64.9%)

VDOT47

DD went out on Friday, so we should now be below £244k balance, although annoyingly I seem to have forgotten my online log in details so can't check the exact balance at the moment. We do get a letter every month confirming the overpayment so when the next one comes through I'll at least know what the balance is at that point!


We seem to have had a very spendy couple of months, which is not good. I am hoping to find a few spare pounds in our account at the end of this month, together with a regular saver maturing and a bonus being paid - should make for a very good overpayment this month!

chelseablue

Know what you mean about a spendy few months, just ordered my son a new car seat...£140 (was reduced from £180 though)

Plus I need a new tyre for my car, oh and wiper blades! Tyre should be about £35 so not too bad.

Also had the car tax renewal letter in the post this week for husbands car, £66 for 6 months or £120 for the year.

Its never ending!

VDOT47

I've been pondering some of the jobs that need doing about the house over the autumn. As we do not intend to be here forever (2 years max) these will be smaller, cheaper jobs which will certainly improve the look of the house (and therefore hopefully not only improve our enjoyment of it, but also make it more saleable in due course) rather than major renovations.


We have agreed that the downstairs needs redecorating. As our living room leads directly to the stairs, it would make the staircase look even more tatty if we were to just redecorate the living room but not the stairs. And once the stairs are done, it makes sense to also do the landing, upstairs doors etc. So we are getting a decorator who has been recommended by a friend to come round in the next couple of weeks to give us a quote.


The second area that needs attention is the garden, and I will be asking a friend who runs a gardening company to come round to quote. He is usually very busy, so I may need to get him booked in a few weeks in advance.


I am hoping that the total cost of these two areas will be less than £1000. Fingers crossed.


I also need to dedicate a couple of Sundays to clear out the garage and do some trips to the tip.


I would like to get this all done before Christmas. Wish me luck.


Another week until payday, but a regular saver matured yesterday so I now have £3697.50 ready to be used as an overpayment at the end of this month. It only earned £97.50 over the year, but it seems sensible to do it this way, rather than paying £300 extra a month directly off the mortgage (5% reg saver, compared to 2.19% mortgage).

VDOT47

New regular saver opened and funded with £300 for this month.

Eagerly awaiting payday this month to allow for a nice overpayment! Will be nice to get into the 230ks, might bring daily interest below £14 too!


Away from moneysaving, I am really pleased that we seem to be past the worst of the summer. Don't get me wrong, I like it when its sunny, but this year was far too hot for far too long and made work, sleeping and just generally doing anything pretty unpleasant. The nights drawing in are also a pleasant sight, as it means that the annoying neighbourhood brats have to go back inside their houses earlier to annoy their own families, rather than the whole neighbourhood!

VDOT47

Slight change of plan - given the desire to move (and therefore apply for another mortgage) within a couple of years, and the inherent need to pay off the credit card balances at the time of that application (if necessary), I've decided to use my regular saver money and bonus to start to build up a savings pot of accessible money (rather than having it tied up in the mortgage).

I've still found enough slack in the budgets to overpay £559.27 this month though. When I get the letter through confirming the overpayment I will update the signature.


A quick review of my records suggests that since I started this journey in November, I have averaged overpayments of £415 pcm plus about £30 each month from the DD being rounded up, so £445 pcm on average in total. In addition, there was the one off payment of £11,000 from the money transfer credit card.


Even with no more big lump sum payments, if I averaged £445 pcm for the next 21 months (up to intended moving date of spring 2020) together with regular capital reduction from standard overpayments each month it should bring the balance down to about £218k. My aim is to whittle this down a little further to £215k, as well as building up savings sufficient to pay off a good chunk of the credit cards to allow for a better mortgage offer, and also to save up funds to pay for moving costs and SDLT. It's a big ask!!


Have just discovered the Early Retirement Wannabee thread on the savings board - some interesting views on there which I need to take on board and have a good think about.


I also have started to reconsider if the title of this thread is correct - do I want to be mortgage free by 55, or simply mortgage neutral? I also really want to bring it forward to age 50, but that might just be being greedy! Hmmm, plenty to ponder.


Have a good weekend!

EagerLearner

Hi VDOT47 have enjoyed reading your diary so far and has given me food for thought as I need to look at regular savers again.
I'm in the same position as you in that we'd like to move in a year or two, we don't want to spend much more on this place, having spent £26k over 9 years to bring it up to date. The equity is £200k now though, so it has been worth it. So long as property prices don't do a 2008 ha.
I've started a diary too, pop along and say hi, we can motivate each other on the journey!