A new chapter begins, my quest to be MF!

edited 5 February 2019 at 12:45PM in Mortgage-Free Wannabe
11 replies 965 views
miss_undastoodmiss_undastood Forumite
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edited 5 February 2019 at 12:45PM in Mortgage-Free Wannabe
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!
Part time working mum of 2 terrors trying to build financial freedom.

Residential Mortgages @ Oct 2020: £308,283
@Jul 2021 £286,600
MFW-21 #20
MFIT-T5 #46
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Replies

  • wildesavingswildesavings Forumite
    176 Posts
    Sixth Anniversary Combo Breaker
    Wow well done! Not easy and yes, a little scary I'm sure but you sound on top of things! Well done x
    Started my MFW journey in August 14 : £103,650
    2019 : £77,900
  • edited 3 February 2019 at 7:18PM
    miss_undastoodmiss_undastood Forumite
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    edited 3 February 2019 at 7:18PM
    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
    Part time working mum of 2 terrors trying to build financial freedom.

    Residential Mortgages @ Oct 2020: £308,283
    @Jul 2021 £286,600
    MFW-21 #20
    MFIT-T5 #46
  • 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!
  • edited 3 February 2019 at 7:19PM
    miss_undastoodmiss_undastood Forumite
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    edited 3 February 2019 at 7:19PM
    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!!
    Part time working mum of 2 terrors trying to build financial freedom.

    Residential Mortgages @ Oct 2020: £308,283
    @Jul 2021 £286,600
    MFW-21 #20
    MFIT-T5 #46
  • beanieloubeanielou Forumite
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    Part of the Furniture 10,000 Posts Mortgage-free Glee! Name Dropper
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    Hope all goes to plan :)
    Lou~ Debt free Wanabe No 55 DF 03/03/14.
    **Credit card debt free 30/06/10~**
    MFW. Finally mortgage free February 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.
    It starts with you, it starts from now. *** It is ok to be me.***
    ***Keep plodding***
    Out of debt, out of danger. ***Be the difference.***
  • miss_undastoodmiss_undastood Forumite
    226 Posts
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    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.
    Part time working mum of 2 terrors trying to build financial freedom.

    Residential Mortgages @ Oct 2020: £308,283
    @Jul 2021 £286,600
    MFW-21 #20
    MFIT-T5 #46
  • miss_undastoodmiss_undastood Forumite
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    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?
    Part time working mum of 2 terrors trying to build financial freedom.

    Residential Mortgages @ Oct 2020: £308,283
    @Jul 2021 £286,600
    MFW-21 #20
    MFIT-T5 #46
  • miss_undastoodmiss_undastood Forumite
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    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.
    Part time working mum of 2 terrors trying to build financial freedom.

    Residential Mortgages @ Oct 2020: £308,283
    @Jul 2021 £286,600
    MFW-21 #20
    MFIT-T5 #46
  • becky170becky170 Forumite
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    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!
    Savings goal 2022 £0/£4000
  • miss_undastoodmiss_undastood Forumite
    226 Posts
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    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
    Part time working mum of 2 terrors trying to build financial freedom.

    Residential Mortgages @ Oct 2020: £308,283
    @Jul 2021 £286,600
    MFW-21 #20
    MFIT-T5 #46
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