yet another mortgage escape quest

sound_mind

Hi everyone. I've just remortgaged and added some debt to my mortgage to renovate and to extend the lease - and even though on paper it's not a bad move, I'm feeling [STRIKE]a bit[/STRIKE] very worried about this.

The good news is that I managed to lock in a 5-yr fix rate mortgage at 1.79%, also that I don't have any debt apart from the mortgage, and I have a stable job. Well, as stable as a job can be nowadays.

The bad news is that I'm a single mother and the total mortgage amount is high. I've never overpaid on my mortgage before, but I think it's time to start doing that, as I'm in my early 40s and don't want to pay a mortgage until I retire. The short term plan is to overpay as much as I can. The long term plan is to sell my London suburbs flat and buy a small property outside of London - hopefully buy it outright. My child is starting secondary school next year, so I'm very loosely planning to move in 7-8 years from now.

I'm now preparing my new budget - the new mortgage rate kicks in on the 1st of August. I've been using Excel for years, but have been looking into budgeting software lately - to be honest I was never much of a saver and never properly budgeted, but I want to change that. I will post my financials once I'm done with the budget, struggling a bit with some of the bits as some expenses are annual and some are variable (e.g. I help my mother with money sometimes).

Thanks for reading! This forum is really great, I've used it in the past for mortgage and general financial info and I'm grateful that it exists!

sound_mind

Here's my budget list. The plan is to stick to this budget each month, and whatever is left in the bills account and in the shopping account on the 24th of each month, use it to overpay the mortgage. I get paid on the 25th.

Also, I plan to save £300 each month into a First Direct regular account - for a full year, to get the 5% interest rate, and then take the full amount and interest and throw it at the mortgage.

Any comments or suggestions, please hit me ta

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Last budget update: 2 August 2018

(BARCLAYS) BILLS [STRIKE]~ £1830[/STRIKE] £1930
Barclays mortgage [STRIKE]£903[/STRIKE] £1,000 ( = £902 monthly repayment + £98 regular monthly overpayment)
First Call accident, sickness, unemployment insurance £36
Barclays ww travel, RAC breakown, mobile phones insurance £24
co-op home contents insurance, home emergency cover £5
service charge, ground rent, building insurance £93
council tax £105
e.on gas, electricity £75
Thames water £17
TV license fee £12
Netflix film subscription £8
Vodafone Internet, line rental, mobile phone incl int't calls, music sub £59
giffgaff child mobile phone £5
Zen Internet web hosting, domain registration £7
Google cloud storage £1
Tesco groceries delivery fee £3
TFL oyster top-up £100
TFC tax-free childcare £255
school clubs, sports, school lunches, parents fund £120

SAVINGS £600
Halifax child savings @ 4% £100
First Direct regular saver @ 5% £300 (this is my big mortgage overpayment fund)
[STRIKE]Tesco holidays fund @ 1.34% £200[/STRIKE] no holidays 'til April 2019 - paid from annual bonus

(FIRST DIRECT) SHOPPING [STRIKE]£750[/STRIKE] £850
groceries & toiletries £300
clothes & shoes £100
haircuts & mani/pedi £50
presents £50
household stuff £50
eating out £100
fun £50
unexpected [STRIKE]£50[/STRIKE] £150 (I increased this... for now - subject to review)

***

tboo

sound_mind wrote: »

The bad news is that I'm a single mother and the total mortgage amount is high/QUOTE]

I'm sure you didn't mean that and phrased it wrong so I've fixed it for you:)
The other news is that I'm a single mother and the total mortgage amount is high.

Welcome sound mind.

haircuts & mani/pedi £50 - are these necessary every month? these can be done cheaper at say training colleges or as a model at salons.

eating out £100 - around £23 week, can this be reduced?
fun £50- can this be cut? and used as an o/p.

julicorn

Hi sound mind, happy shiny new diary! Looking forward to seeing how you get on x

sound_mind

tboo wrote: »

sound_mind wrote: »

The bad news is that I'm a single mother and the total mortgage amount is high/QUOTE]

I'm sure you didn't mean that and phrased it wrong so I've fixed it for you:)
The other news is that I'm a single mother and the total mortgage amount is high.

Welcome sound mind.

haircuts & mani/pedi £50 - are these necessary every month? these can be done cheaper at say training colleges or as a model at salons.

eating out £100 - around £23 week, can this be reduced?
fun £50- can this be cut? and used as an o/p.

Thanks tboo! Well the 'being a mother' part is good. The single part not so much.... as someone put it on another thread, I'm "so utterly single it is ridiculous". I don't feel good about being single. I'm past the honeymoon of singleness, it's been too long. I just feel alone and it sucks. I can't sugar coat it.

On the pampering cost yes it seems high but I cut my hair every 2 months, my child's hair even less often because she likes it long. Mani/pedi is £35-40 in my area and I go about once per month, and deal with it myself in between. A haircut is £40-50, I just don't know where to go cheaper. Then there's eyebrows and other bits and bobs.. so I think £50 is realistic. I will try to do mani/pedi on my own in the winter (especially pedi) but I'm terrible at it. I also don't have a cleaner and I'm very good at ruining my manicure :rotfl:

Eating out yes I can cut. In fact I think I spend too much money on food altogether so I'm now consciously looking for buying stuff on sale and maybe "go down" one or two! brands. And eating out only on special occasions.

And yes the fun part seems high at £50 - that's my estimate, not actual - so I'm keeping an eye on it.

thanks.

sound_mind

julicorn wrote: »

Hi sound mind, happy shiny new diary! Looking forward to seeing how you get on x

Thanks julicorn, my mortgage is higher than yours so it's a long journey. Good luck to all of us!

beanielou

Happy shiny new diary

sound_mind

Thank you.

So the remortgage went through (1.79% interest rate for 5 years, yay!) and the regular payment is actually £902, not £903, and it will be taken only on the 16th of Aug, but then rest of the payments on 1st of each month.

I've decided to change my budget a bit. First of all, I won't be holidaying until maybe April next year (:() and I can use my annual bonus to pay for that. Also, I have decided to regularly overpay £98 - basically "round up" the monthly payment to £1000. Also, save £300 each month into a First Direct regular saver 12 months @ 5%, then when this matures take the entire amount of £3600+ approx £90 interest and overpay the mortgage.

So basically this is now the budget:

(Barclays) Bills: £1930
(Halifax & First Direct) Savings: £400
(First Direct) Spending: £850

I know I increased the spending budget a bit but knowing myself I think that's wise. Also my plan is to do a swipe of both bills (Barclays) and spending (First Direct) accounts on the 24th of each month just before pay date - and use that money to overpay the mortgage as well OR save it in the emergency fund OR both. Most bills leave my account within the period from the 26th to the 3rd of next month, so there are no bills due between 4th and 24th, only spending.

So there. Hope my grand plan works.

sound_mind

My pet peeve tonight: I've remortgaged from Halifax to Barclays today and Halifax took a full payment today, even though mortgage was paid in full . I know the payment will be returned by Halifax to my account in the next 2 weeks but still... The first Barclays mortgage payment is due on the 16th - hopefully I get the money back from Halifax until then, otherwise I will have to temporarily borrow from the emergency fund.

First world problems.

pinkypig

Hello :wave:

Another single mum here . Sole responsibility can feel a bit daunting but if you look a bit closer it's quite liberating as you are in control, you get to make the plans and the decisions and there's no danger of anyone derailing your efforts:D. The very best of luck to you.

PS there's a bit of a broadband price war at the moment. Just negotiated mine down to £22.50 pm including basic tv, landline, super fast optic and a free SIM for my mobile with 300 mins and unlimited texts. Might be worth switching or putting a bit of pressure on your provider to match the competition:D

PP xx

sound_mind

pinkypig wrote: »

Hello :wave:

Another single mum here . Sole responsibility can feel a bit daunting but if you look a bit closer it's quite liberating as you are in control, you get to make the plans and the decisions and there's no danger of anyone derailing your efforts:D. The very best of luck to you.

PS there's a bit of a broadband price war at the moment. Just negotiated mine down to £22.50 pm including basic tv, landline, super fast optic and a free SIM for my mobile with 300 mins and unlimited texts. Might be worth switching or putting a bit of pressure on your provider to match the competition:D

PP xx

Thank you pinkypig! I totally agree! Sometimes I feel anxious when I think about the future and what ifs, but my ex is quite responsible so at least I know that my child will be looked after. I also have a large extended family and I know I can count on them as well, in case things get worse. As long as we're in good health, anything else is a bonus.

I've just switched broadband providers actually. I was paying £18.99 for line rental and free unlimited broadband with Sky and I switched to Vodafone fibre for £20 per month, including line rental. I don't have TV except for the TV license. I also use Netflix.

My mobile contract is ending early 2019, so I plan to switch to SIM only, if my phone still works well at that time.