Journey to mortgage freedom

FIREdoc

Hey Poppycat! Looks like you are doing awesomely, bank shifts sounds like potential for good flexibility and work-life balance with option to up the ante when extra things need paying for - sounds ideal to me.
Apparently on their paperwork they can't reduce the term, but I can top up my regular payments... not sure if I'm being daft, but this sounds like it would have the same effect overall (although does mean my OPs seem to get partially double counted - but this would only be an issue when I'm close to the 10% limit, right?!). *confused*

FIREdoc

So... today is monthly adding interest day, and I thought it would be fun to see what's changed! 31 day month, so added just over £381 in interest BUT for good motivation, the daily interest amount looks to be down from £12.58 to £12.29. Guys, that's almost a whole 30p down EVERY SINGLE DAY! Woop!

Mortgage_Minimiser

Ha ha.

I get excited about those things. It all adds up though. Im paying exactly £111.00 less interest today (on a 30 day month which I use as an average) than I was when I took the mortgage out, so it all adds up!

Good luck!

MM
x

Poppycat1

Sorry, I'm confused as well. Well done on the interest reduction.

FIREdoc

Ooops moment. Got the interest etc all from the £3000 savings pot and promptly spent £1000! It's covered a number of things on my list of wants that I hope will give me a ton of joy over the coming months/year (a gorgeous giant rug, an online course that I've been hankering after for a couple of years now, and some new underwear!!). So overspent, but definitely felt like it's an investment in me. Now wondering about just shoving the left over £2000 into the join account and raise the monthly payments by £500-£700 and see what happens, rather than making a lump sum.

Main issue at the moment is just generally feeling a bit meh. I know this contributed to my feeling of "need" to spend on nice things for myself, but hope it's not a vicious cycle and that I can jolt myself out of it frugally. Have a pot for spends set aside for a holiday in the new year, so wonder if it's some wanderlust for sunny beaches or at least a vitamin D top up?!

FIREdoc

So, some life/accounts admin and chats with the OH, and I've landed on a slightly more conservative plan for the next few months, wanting to make sure we have enough pennies for Christmas (lots of travel visiting families etc) and some more house bits we'd like to make things a bit more comfortable (pull out guest bed, lighting, some built in shelving...). So...have gone with increasing our regular monthly payments by £500, this will be paid for for a few months by my savings, plus I'm going to increase my contributions to the joint account by £250, and by the time we need the remaining £250/mo, OH should be in a position to contribute that himself (he's had a spenny few months too, so playing catch up on that for a couple more months!!).
Showed OH the numbers plugged into the Natwest overpayment calculator and he was impressed - the new monthly OP would reduce our mortgage by over 11 years, plus save us a staggering £29000 in interest!! Now if that isn't motivation to keep it up, I don't know what is?! Not quite on track for hitting my 2019 target if they're the only OPs though, so still some work to be done

FIREdoc

So, a little bit of tidying of the account today... Set up the regular OP but it won't take affect until next month, so I've done a one off payment of £500 for the month to keep me up to date. Payments all gone off now so lovely new balance for Nov updated in sig :j
Bought a few house bits too this week -most importantly some lamp shades for some very bare looking ceiling bulbs! All Wilk0s bargains . Feel the house becoming more homely every month!

pinknsparkly

Congrats FIREdoc, you're definitely on the right track!! Our house purchase is going through at the moment and I can't wait to get a mortgage that I can start overpaying on I saw that you asked in a previous post about opinions between using regular savers and making one off lump sum repayments vs monthly OPs. I *THINK* I've made the decision to go down the regular saver route (so long as the interest is significantly higher than that charged for the mortgage) as it'll mean we earn more interest on the savings than we'll pay on the mortgage in that time. But I might feel differently when push comes to shove and I want to see the mortgage balance going down as fast as possible!!

Our bank were willing to lend us our mortgage over as little as 7 years, so my plan is to work out what the monthly repayment would be if we repaid over 7 years and attempt to match that amount into mortgage repayments, OPs and savings. I'm aiming for mortgage free by 50 (currently 32) to allow us the option of early retirement if we wanted it and so I'm going to make OPs that will set us on course for mortgage free in 17 years and invest the remaining amount into stocks and shares for early retirement. I hope that makes sense, it seems so simple in my mind but I've not yet figured out an easy way of explaining it!! I'm "lucky" that my husband is quite happy to leave savings and mortgage repayments up to me, which can be frustrating when he actively doesn't want to be involved in making the decision but at least he doesn't argue with my plans!

kev2009

Hi,

Sounds like you have a plan, its now just sticking to it and not getting tempted to use the money for something else.

I got my mortgage in 2015, 30 year term, fixed rate for 5 years, can pay a max of 10% each year. I haven't made any OP yet as was my first property, I put what I could into the deposit to try and keep mortgage reasonable and have been building up a emergency fund. I'm also single so paying everything myself.

I'm looking to make my first small OP next month and then next year and the following year, pay as much as I can afford to on the mortgage. I'm not sure but I've heard Santander calculate the 10% mortgage over payment in Jan and that's the figure you can over pay between Jan and December of that year whereas I thought it ran from the monthly you took the Mortgage out/moved in.

I plan to reduce my monthly mortgage payments up until the end of this 5 year fixed deal (2020). Whilst I want to get the mortgage paid off in less than my 30 year term, I'm also aware interest rates may go up in the future which would obviously increase my monthly payments but even more so if I reduce the term as will be a shorter term to pay it back. So my thinking was to reduce monthly payment up until the end of my current 5 year fixed and then use the monthly difference (between new monthly payment figure and what i'm currently paying) to go towards my yearly OP. Hopefully I can help offset some of any potential monthly payment increases by 2020 and then from 2020 i'm currently planning on a 5 year fixed again and I will then switch to reducing the term for over payments and keep the monthly amount the same, as I plan to overpay each year what I can afford to which will then hopefully see my mortgage coming down to a much lower figure in approx 7 years time.

I will then re-assess where I am at then in terms of what I owe and potentially maybe then fix for 2 years or maybe 5, depending on what I owe and what interest rates are by then. I'm hoping this all works out and if interest rates don't go up or get lower then I can only gain from this and potentially clear mortgage sooner. Ideally i'm looking to repay the mortgage within 15 years rather than 30 so therefore by 2030 as i'll be early 50s then and would be nice to see it gone and then look towards contributing more to a pension or ISA.

I'm currently paying into company pension scheme so i'm not ignoring the pension but I don't have any ISAs as I closed it to fund the deposit on the property and at present don't have too much cash I could lock away for a year, plus interest rates are poor so i'm currently paying into 2 regular saver accounts to get small interest and keeping the cash readily available should I need it for any reason.

Good luck with you OP'ing and MFW!

Kev

FIREdoc

Wow, thanks for your thoughtful responses pinknsparkly and Kev! Lots to think about.
Things are still plodding along here, regular OP all set up to start this month, and some Christmas and house expenses mean I think I'll hold off on any further OPs (plus after an early payday January is always a long month!).
We really are loving our new home, we have been able to host several dinners, a brunch, and even had some overnight stays - all these would have been really tricky in our rented place with no dining area or spare room. Looking into what bigger spends we might prioritise in 2019 - my vote currently is getting the garden sorted into a tranquil and social space - it's teeny tiny, but would love to have a small patch of grass, especially for little people to enjoy (several friends with little ones - no current pitter-patter over here yet!), and a grown up seating/firepit/bbq area, plus some storage for garden stuff and bikes. Needing some tiny garden inspiration