A new chapter begins, my quest to be MF!

miss_undastood

So - it’s been a while since I was last around. A lot has changed!!
I bought my first house in 2008 whilst living on my own. I found this board and became obsessed with paying off my mortgage.

I got married in 2011 and in 2013 we made the decision to move house taking out an astronomically scary mortgage which started with a £3xx,xxx but I made the conscious decision to not pay off the old mortgage which is 0.89% above base rate and I had savings which offset the mortgage we had. The new bit of mortgage was £265k which we took out a 10 year fix at 3.89%

9 months later ds1 arrived, followed 2 years later with dd1.

Things have been tough, but we have sacrificed holidays in favour of paying off the mortgage. I also took a years unpaid leave after my 2nd year of maternity leave.

We are limited to 5% overpayments which has been fine up until now as we have only been overpaying by around 10k a year if we could.

The £264k mortgage is my priority - the interest rate is higher and we took it out over 35 years to make it affordable (lucky really with 3 years not working in the first 4 years of owning the house!) I’ve now reduced my hours and work only 16 hours a week. Things are tight, but overpaying has helped. 5 years after moving in we owe £188k in this big mortgage which I don’t think is too bad considering the huge drop in income we have faced! There’s 29 years remaining but I think we can do it in 11 and then clear the small mortgage within 2 years after that.

Can anyone help to keep me on track/offer support/advice?

Sorry for waffling on!

wildesavings

Wow well done! Not easy and yes, a little scary I'm sure but you sound on top of things! Well done x

miss_undastood

Thanks, I feel like we are getting somewhere in the sense that every little helps, and and the interest at the start of a mortgage is always disproportionate.

When we started we were paying £28 in interest a day on the big mortgage, now it is just £20 a day - so it has come down a lot, despite being on a fixed rate, but there is still a long way to go. (It is only about £1.70 a day for the smaller mortgage)

I really want to move house again; but I’d love to do it mortgage free. Our house is worth £500-£520k so we have a good pot of equity building up

upwards

Well done on starting your journey! Your an old hand at this overpaying so I'm sure you will build on your achievements. I look forward to reading your path to MFdom!

miss_undastood

So. £154,000 is a magic number for my mortgage.

If I keep payments at £1,000 a month it will be the point where I begin to pay more capital off per month than interest.

I think I will be there in the next 2 and a bit years.

That will be only 7 years into my 35 year mortgage due to overpaying.

Little goals like this will keep me motivated

I project my big mortgage will be cleared in 2029 (16 years total) but I really want to do it sooner (and be able to take the children to Disneyland etc)

We have never had a real family holiday abroad. DS started school this year and the school holiday prices are ridiculous for 2 weeks in the sun (any tips to reduce the cost appreciated - Spain looks to be £4K all inclusive which I thought would be easier with children) I’d rather pay 4K off the mortgage!!

beanielou

Hope all goes to plan

miss_undastood

Thanks @beanielou

So my thoughts today....

Being mortgage free when you have a 35 year mortgage of £308,000 seems like a distant pipe dream.

We stretched ourselves to the absolute limit and had spent our salary prior to completion on buying the house. We barely had a penny to our names.

The mortgage payments of almost £1,300 wiped out an entire income and the other was spent on bills and necessities.

But we survived.

5 years later our payments have reduced to £1,150 and we think we want to stay there - £1000 on the big mortgage and £150 on the smaller one

We have made the maximum overpayment in 3 or 4 of the 5 years so far (I’d need to check) but going on maternity leave so soon after taking out the mortgage wasn’t quite the intention, but I wouldn’t change it now.

Times may be tough for me, or you. But however small it may seem a small payment off the mortgage will make a difference.

We are down to around £225k now which still feels scary and like a big number, but it will soon be £150k, then £100k and then we are on the path to clearing it. It’s all about steps in the right direction, however small.

miss_undastood

I see people on here able to pay off huge chunks of their mortgage a month.

It is disheartening at times. But I have to remember our household income is around £60k before tax.

I need to carefully plan our expenditure, we have a 5k emergency free cash fund and access to other funds relatively quickly if needed.

Is 5k enough of a buffer? I have shares I can sell to give me cash if I needed more... 5k should be enough to see me through an immediate emergency shouldn’t it?

miss_undastood

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 1 (&cc)

Monthly Income Details
Monthly income after tax................ 1000
Partners monthly income after tax....... 2100
Benefits................................ 134.6
Other income............................ 0
Total monthly income.................... 3234.6

Monthly Expense Details
Mortgage................................ 1150
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 220
Electricity............................. 60
Gas..................................... 41
Oil..................................... 0
Water rates............................. 30
Telephone (land line)................... 15
Mobile phone............................ 16
TV Licence.............................. 13
Satellite/Cable TV...................... 35
Internet Services....................... 20
Groceries etc. ......................... 430
Clothing................................ 20
Petrol/diesel........................... 80
Road tax................................ 20
Car Insurance........................... 25
Car maintenance (including MOT)......... 0
Car parking............................. 5
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 25
Pet insurance/vet bills................. 0
Buildings insurance..................... 5
Contents insurance...................... 10
Life assurance ......................... 10
Other insurance......................... 0
Presents (birthday, christmas etc)...... 15
Haircuts................................ 15
Entertainment........................... 20
Holiday................................. 120
Emergency fund.......................... 0
Save to overpay......................... 800
Total monthly expenses.................. 3200


Assets
Cash.................................... 5000
House value (Gross)..................... 520000
Shares and bonds........................ 28000
Car(s).................................. 17000
Other assets............................ 0
Total Assets............................ 570000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 225000...(1150).....3.52
Total secured & HP debts...... 225000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Total unsecured debts..........0.........0.........-


Monthly Budget Summary
Total monthly income.................... 3,234.6
Expenses (including HP & secured debts). 3,200
Available for debt repayments........... 34.6
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 34.6

Personal Balance Sheet Summary
Total assets (things you own)........... 570,000
Total HP & Secured debt................. -225,000
Total Unsecured debt.................... -0
Net Assets.............................. 345,000

Created using the SOA calculator at https://www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using other browser.

becky170

Wow you've done really well to pay off that much with maternity leave, young children etc! I understand what you mean about holidays becoming expensive once you have to take term time holidays. My little boy starts school this September so we'll have to have a long hard think about our holiday next year. It's really important to me that we have a holiday each year but like you justifying 4k is too difficult to do!

miss_undastood

My son started school this last September. He was only 4 in August -
He breaks up for the summer holidays on his sisters birthday this year

He only gets 5.5 weeks off this year - I’m struggling to fit in a birthday party (birthdays are a week and a bit apart) and a 2 week holiday that pwon’t cost the earth. We also have family visiting from Australia for most of July.

We love camping but I really want to take them somewhere warmer - I’m considering looking at going in a half term instead. But I don’t think it will be the same... there is May or October but then we only get a week.

There doesn’t seem to be much difference between 1 or 2 weeks away. I’m hoping someone has the answer on having a great holiday without breaking the bank. I’d spend £2k but £4k just feels like too much