Kill the mortgage before 73!!

kev2009

Hi,

i'm not too far behind you in terms of when my property will be paid for. I had to take mine over 30 years as wouldn't fit in less, which means I will be 68 when mine will be paid, which ironically is when I suspect i will be eligible for state pension.

I am looking to reduce this of course by over payments, I haven't made any yet, looking to make my first small over payment this year, fingers crossed all being well.

Good luck on reduce the time

Kev

helejenkins1

I haven’t updated for a while as I’m still waiting to complete. Exchanging contracts this week with a completion date of hopefully 6th of December.

Looking forward to a new year and new start. I am working on my SOA all the time making sure it’s as realistic as possible and will post as soon as I’m happy with it.

I will certainly look into increasing my pension contributions but I certainly don’t want the mortgage till I’m 73. I think my SOA figures show I’ll be able to do both.

helejenkins1

I think I’m finally happy with my SOA. I haven’t been a position for many years where I’ve been able to save and budget for things like holidays birthdays etc. They’ve always just gone on the credit card, so I wanted to make sure I was being as realistic as possible.
The mobile phone bill is high but we are both locked into a contract for another year but when that is up we will be looking at sim only deals. If there’s anything else that stands out to anyone then please feel feel to let me know.

ousehold Information[/b]
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 1492.6
Partners monthly income after tax....... 1582.84
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 3075.44

Monthly Expense Details
Mortgage................................ 557
Secured/HP loan repayments.............. 240
Rent.................................... 0
Management charge (leasehold property).. 14
Council tax............................. 130
Electricity............................. 30
Gas..................................... 31.73
Oil..................................... 0
Water rates............................. 31
Telephone (land line)................... 10
Mobile phone............................ 96.96
TV Licence.............................. 12.37
Satellite/Cable TV...................... 50
Internet Services....................... 12.5
Groceries etc. ......................... 250
Clothing................................ 50
Petrol/diesel........................... 180
Road tax................................ 14
Car Insurance........................... 64.63
Car maintenance (including MOT)......... 40
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 29.4
Pet insurance/vet bills................. 16.14
Buildings insurance..................... 10
Contents insurance...................... 8.65
Life assurance ......................... 20.46
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 20
Entertainment........................... 150
Holiday................................. 400
Emergency fund.......................... 100
Total monthly expenses.................. 2618.84


Assets
Cash.................................... 1600
House value (Gross)..................... 218000
Shares and bonds........................ 0
Car(s).................................. 25000
Other assets............................ 0
Total Assets............................ 244600


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 183250...(557)......2.2
Hire Purchase (HP) debt ...... 15000....(240)......6.9
Total secured & HP debts...... 198250....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Loan from parents..............36000.....200.......0
Total unsecured debts..........36000.....200.......-


Monthly Budget Summary
Total monthly income.................... 3,075.44
Expenses (including HP & secured debts). 2,618.84
Available for debt repayments........... 456.6
Monthly UNsecured debt repayments....... 200
Amount left after debt repayments....... 256.6

Personal Balance Sheet Summary
Total assets (things you own)........... 244,600
Total HP & Secured debt................. -198,250
Total Unsecured debt.................... -36,000
Net Assets.............................. 10,350

helejenkins1

So a little step forward. We are exchanging today.

helejenkins1

I was thinking I wouldn’t really start updating this diary much until I was in a position to start overpaying the mortgage but having had a lazy day with a sore head I have been able to start reading a few diaries and I’m feeling truely inspired.

So the sore head is down to a night out with DH last night to celebrate our 2nd wedding anniversary. I woke up this morning feeling so bad about how much we spent. Over £150!! This is the sort of impulsive behaviour we need to stop when we move house. I really don’t want us to end up back in the same position again. So my phone battery is now down to 11% from 100% this morning from reading MSE all day and finally getting my butt in gear and doing some selling.

If anyone’s read so far then you will know I am moving on December 6th. We are downsizing so have a lot of stuff to get rid of I made a start selling on Facebook today and have sold a few bits and pieces pending collection to a total of £60. Not a bad start. Not sure what I’m going to do with it yet. Maybe towards last nights bill.

I also unlocked an old email account that I used to use for surveys and found I has a £10 mr t voucher sitting there so they will help towards this weeks shopping.

Looking forward to going to bed tonight so I can wake up and do it all again tomorrow.

gallygirl

helejenkins1 wrote: »

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 183250...(557)......2.2
Hire Purchase (HP) debt ...... 15000....(240)......6.9
Total secured & HP debts...... 198250....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Loan from parents..............36000.....200.......0
Total unsecured debts..........36000.....200.......-


Monthly Budget Summary
Total monthly income.................... 3,075.44
Expenses (including HP & secured debts). 2,618.84
Available for debt repayments........... 456.6
Monthly UNsecured debt repayments....... 200
Amount left after debt repayments....... 256.6

Personal Balance Sheet Summary
Total assets (things you own)........... 244,600
Total HP & Secured debt................. -198,250
Total Unsecured debt.................... -36,000
Net Assets.............................. 10,350

Personally I would not be comfortable to be carrying that level of debt on fairly low incomes, but times have changed since I was house buying!!!

With such a low APR it really doesn't make sense to overpay your mortgage. What about your loan - can you make overpayments on that? If not, is there a penalty for paying it off early? With a limited income and plans to retire early (which can be easier than you think if you really go for it!) you need to be sensible and make every penny count. What matters is building your net worth, in as efficient a way as possible. Better to have debt at a low APR and offset it with higher APR savings.

If I was in your shoes I would forget about the mortgage for now. You need to look at your overall debt of which the mortgage is only part (albeit the biggest!). If you can overpay the HP then do that every month. If not, put the money in good interest bearing accounts. For example, open a joint NWide Flex account if you don't have one already. You can then open a NWide Flex Direct account and put £2,500 in there with 5% interest (that would be a good place for your emergency fund). Once you have it fully funded get hubby to open one. You can have two accounts each, so potentially 10k in there. Once you've saved enough to pay off the HP, if you can, do that, then start to build again. (The downside is the 5% is only for a year, once it matures you close it then open another one, crazy I know!)

Once the HP is gone then carry on funding the Flex Direct accounts. You can also use your HP payments to fund a regular saver, e.g. with First Direct you can get a 5% regular saver, £300 a month each if you have a joint account.

Maybe time to revisit when you come to remortgage. If mortgage rates have risen then savings ones will as well so the basic maths argument will hold, but it's possible you might want to use some savings to get a better APR.

Good luck with the move. Oh, and don't forget the pension payments .

selloptape

Congrats on your new home... less than a month til move date, how exciting!

helejenkins1

gallygirl wrote: »

Personally I would not be comfortable to be carrying that level of debt on fairly low incomes, but times have changed since I was house buying!!!

With such a low APR it really doesn't make sense to overpay your mortgage. What about your loan - can you make overpayments on that? If not, is there a penalty for paying it off early? With a limited income and plans to retire early (which can be easier than you think if you really go for it!) you need to be sensible and make every penny count. What matters is building your net worth, in as efficient a way as possible. Better to have debt at a low APR and offset it with higher APR savings.

If I was in your shoes I would forget about the mortgage for now. You need to look at your overall debt of which the mortgage is only part (albeit the biggest!). If you can overpay the HP then do that every month. If not, put the money in good interest bearing accounts. For example, open a joint NWide Flex account if you don't have one already. You can then open a NWide Flex Direct account and put £2,500 in there with 5% interest (that would be a good place for your emergency fund). Once you have it fully funded get hubby to open one. You can have two accounts each, so potentially 10k in there. Once you've saved enough to pay off the HP, if you can, do that, then start to build again. (The downside is the 5% is only for a year, once it matures you close it then open another one, crazy I know!)

Once the HP is gone then carry on funding the Flex Direct accounts. You can also use your HP payments to fund a regular saver, e.g. with First Direct you can get a 5% regular saver, £300 a month each if you have a joint account.

Maybe time to revisit when you come to remortgage. If mortgage rates have risen then savings ones will as well so the basic maths argument will hold, but it's possible you might want to use some savings to get a better APR.

Good luck with the move. Oh, and don't forget the pension payments .

Thanks for the advice, with regards to the loan, it was a loan from my mother when we moved house. She lent my sister the same amount and enables her to be mortgage free. She didn’t even want the money back but my sister and I both agreed to pay something even if it was just a token gesture. She doesn’t want any of us paying more than the other as she says it will just be forgotten about in the future when she passes which is hopefully a good few years away yet.

With regards to the HP, DH is a car fanatic and changes his car every 3 years maximum. I just have to accept that this payment will be going out monthly until he decides he is finally happy with a car. (Don’t see that happening)

We already bank with nationwide but unfortunately the 5% interest has expired now.

We feel more than comfortable with how we are going to be living but not at all comfortable with still having a mortgage till I’m in my 80’s

gallygirl

helejenkins1 wrote: »

Thanks for the advice, with regards to the loan, it was a loan from my mother when we moved house. She lent my sister the same amount and enables her to be mortgage free. She didn’t even want the money back but my sister and I both agreed to pay something even if it was just a token gesture. She doesn’t want any of us paying more than the other as she says it will just be forgotten about in the future when she passes which is hopefully a good few years away yet.

With regards to the HP, DH is a car fanatic and changes his car every 3 years maximum. I just have to accept that this payment will be going out monthly until he decides he is finally happy with a car. (Don’t see that happening)

We already bank with nationwide but unfortunately the 5% interest has expired now.

We feel more than comfortable with how we are going to be living but not at all comfortable with still having a mortgage till I’m in my 80’s

How good of your mum . Good too that you and your sister want to pay back - I certainly wouldn't rush to pay it off faster if she doesn't want/need it. I was able to give my two their deposits - it was lovely to help out while I was alive to see it, am sure your mum thinks the same :rotfl:.

Well if DH is happy to change his car every three years and always have a loan he'll just have to carry on working while you retire won't be .

If your 5% offer is finished, close the account and then open another one - I've just done it with no problem . Then open another when you've fully funded the first one :T.

Sorry, I've just reread my post and I sounded really bossy :rotfl:. It's just that I'm a lot older than you and done it and bought the t-shirt (or should I say, refused to buy the t-shirt and put the money in savings instead ).

helejenkins1

gallygirl wrote: »

How good of your mum . Good too that you and your sister want to pay back - I certainly wouldn't rush to pay it off faster if she doesn't want/need it. I was able to give my two their deposits - it was lovely to help out while I was alive to see it, am sure your mum thinks the same :rotfl:.

Well if DH is happy to change his car every three years and always have a loan he'll just have to carry on working while you retire won't be .

If your 5% offer is finished, close the account and then open another one - I've just done it with no problem . Then open another when you've fully funded the first one :T.

Sorry, I've just reread my post and I sounded really bossy :rotfl:. It's just that I'm a lot older than you and done it and bought the t-shirt (or should I say, refused to buy the t-shirt and put the money in savings instead ).

Oh no I appreciate all the advice that may come my way. We shall move in and see how it goes. My mam is not short of money since my grandad passed. She never had much before that and I think she enjoys sharing with myself and my sister. My sisters past relationship failed and would have struggled without my mams help but didn’t want to give one without the other. We didn’t need it but she insisted and we failed and spent it. We’ve had an extravagant wedding in Disney Florida and a beautiful Caribbean cruise as a honeymoon so really can’t complain.x