11 years to be MF ready for retirement

louby40

I currently have just over 17 years left on my mortgage. My 5year fixed rate ends in May 2020 (2.55%). I owe £93,392 on my mortgage at the moment.

I've been overpaying by £33.96 a month to round my monthly payment up to £600, thats £407 a year since 2015 when I took my mortgage out.

I plan on retiring in 11 years so I need to start over paying massively to achieve this, as I want to be mortgage free in retirement. I'm currently paying off some debts (house refurbishment on 0%) which will end when my fixed rate ends., so I'm not really in a position to overpay anymore yet.

I estimate I'll need to overpay about £300 a month to achieve this but am not entirely sure.

Any extra that I can scrabble together from surveys or top cash back sites I plan on throwing at my mortgage.

edinburgher

Would you consider using some of any pension lump sum to knock your mortgage on the head?

It could be a way to keep the OPs slightly lower, while building up additional pension benefits over the next 11 years.

Just a thought, I am very pro-pensions

louby40

I could throw a bit at my mortgage from my lump sum - it's an option but I'd like to keep as much of my lump sum as possible as if I retire at 60 I'm going to have to have something to bridge the 7 years before I get to 67.

I'm a teacher so my pension is really good. By the time I retire I will have been teaching for 33 years. because of changes to the teachers pension in 2015 my pension will be in 2 halves, i'll get my first bit at 60 and second at 67.

I also have a small pension from a job I worked at before for my local council.

I will eventually downsize to release equity in my house, I'm still undecided whether to sell before I retire or after as I've only been here for 3 years and love it. Not ready to move yet.

edinburgher

Ok - not such a valid suggestion if you have DB pensions and need to bridge that gap

Remember you can pay up to 100% of your salary up to £40k? into a pension - might be worth making hefty investments into a SIPP to help bridge that gap, you'd be able to draw the SIPP before 60 I think, so you could look at a 3 stage retirement in terms of income becoming available.

You'll also get state pension.

beanielou

Happy shiny new diary

louby40

So would I be better paying into a SIPP rather than over paying my mortgage and then using my lump sum to pay off my outstanding mortgage balance?

My house will be worth approx £200k by the time I retire (maybe more) and I could buy a small terrace for £100k thus releasing £100k or so to fund my retirement.

It's so hard to know what to do!