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5 years to freedom?

hjghg5
Posts: 58 Forumite

My remortgage completed today, so it’s time to put in place a plan to pay it off. Unlike previous remortgages, I approached this one with the intention of it being my last, so I’d better put that plan into effect now.
The numbers:
Loan - £100,000
Term – 10 years
Fixed rate – 5 years at 2.2% (or possibly 2.25%)
Overpayment limits – entirely unlimited
House value approx. £300,000
The ability to overpay cost me a slightly higher rate, but it’s still lower than the deal I’ve just moved from.
The plan…
Does that sound like a plan?
The numbers:
Loan - £100,000
Term – 10 years
Fixed rate – 5 years at 2.2% (or possibly 2.25%)
Overpayment limits – entirely unlimited
House value approx. £300,000
The ability to overpay cost me a slightly higher rate, but it’s still lower than the deal I’ve just moved from.
The plan…
- Overpay each month by keeping my payments at what I’m paying on my current deal rather than taking advantage of the fact that they’re £150 per month cheaper on the new rate.
- I’m due to receive an inheritance late this year or early next year. I’m an executor as well as one of the beneficiaries so I know what the numbers are and have control of the process. We’re currently in the process of selling a house, then the proceeds need to be divided up. I’m planning to use some of this for other things, but around £30-40,000 will be paid off my mortgage. (I did consider staying on my old SVR until I received this and only remortgaging for a lower amount afterwards without the need for as much flexibility in overpayments, but for various reasons it was easier to remortgage first).
- I’m currently also putting money into other places each month - £200 5% regular saver, £250 SIPP, £350 S&S ISA, £100 LISA, plus some AVCs into my work pension – so I could divert some of this money to mortgage payoff, but I’d prefer not to put all my eggs in the housing basket as the mortgage rate is relatively low.
Does that sound like a plan?
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Comments
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Happy shiny new diary
Sounds like a plan to me!I am a Forum Ambassador and I support the Forum Team on Mortgage Free Wannabe & Local Money Saving Scotland & Disability Money Matters. If you need any help on those boards, do let me know.Please note that Ambassadors are not moderators. Any post you spot in breach of the Forum Rules should be reported via the report button , or by emailing forumteam@moneysavingexpert.com. All views are my own & not the official line of Money Saving Expert.
Lou~ Debt free Wanabe No 55 DF 03/14.**Credit card debt free 30/06/10~** MFW. Finally mortgage free O2/ 2021****
"A large income is the best recipe for happiness I ever heard of" Jane Austen in Mansfield Park.
***Fall down seven times,stand up eight*** ~~Japanese proverb. ***Keep plodding*** Out of debt, out of danger. ***Be the difference.***
One debt remaining. Home improvement loan.0 -
We in similar position as you, 10 yr fix with 6 yrs left with £102k outstanding. Will be following :beer:0
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Sounds like a great plan!0
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Happy new diary! Can't wait to see how you get on0
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A bit of a change of plan, but some progress. I realised that trying to clear my mortgage as quickly as possible might not be the best use of my money, so I've come up with a bit of a plan to pay it down but not quite as aggressively, and spread my money around a bit more as follows...
Mortgage - I've just repaid (today!) £15,000. That brings my balance below £80k, and my term to 7 years and 10 months. I'm holding off on deciding whether to make regular overpayments too.
Pension - I've massively increased my contributions to my workplace pension from 5% to 20% (plus 7% employer contribution). A pay rise helped here ;-) I'm also still contributing £250 per month to my SIPP (although as the workplace pension is salary sacrifice I might dump this contribution and bump up the workplace one a bit more).
ISAs - I paid in the full £20k for the last financial year (£16k S&S, £4k LISA) and will do the same again this year (£11,800 already paid in, then carrying on with £350 + £100 per month to the S&S ISA and the LISA).
Regular Savings - still £200 per month, but now only at 3% :-(0
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