Paying off the mortgage... in five years?!?!?!

NotaBella

At work we would call this a 'stretch goal' so I think I'm going to need some help. :eek: On paper it's doable but I fritter away soooo much money so I'm hoping that having a place to be accountable will keep me on track.

I've got £84,500ish left to pay off on my cozy, little flat and according to the nice people at the mortgage company 22 years left to pay it, which seems like a very long time. So far I've been splitting spare cash between that and savings but have decided to start chucking it all at the mortgage to see what I can achieve.

I thought I'd kick things off by going on holiday and paying my car insurance. :rotfl:

getmore4less

Always good to have a goal.

If not done already do a 5 year budget plan to make sure it is all covered.

if you post a SOA(based on the 5y plan) you will get a lot of help to trim that down.

Before interest that's £1,400pm probably closer to £1500 with interest.
your 22y payments will be around £400 so a good £1kpm to find.
Don't forget pension can be a better place for the money

Sara21

Wow - that would be an awesome achievement!


Make sure you're using cashback sites for the insurance (and anything else you can!). Every little helps!

NotaBella

Hi Getmore4less, thanks for stopping by! Aim for the stars and you might hit the moon, right? I haven't planned out the next five years, beyond a vague 'this is how much I need to find'. An SOA is a good idea but I'm going to wait until April because various things change then around how much is coming in and how much needs to go out. I'm also tracking spends over the next couple of months so I can give folks accurate info (spoiler alert - too much on coffee). Brexit is also potentially a massive spanner in my plan.

Hi Sara - thanks for the tip! I'll check that out.

On the plus side, I've always paid into a pension so that's fairly healthy, I've got 6-12 months of worth of Emergency Fund, and my only debt is my student loan which should be gone in the next 8 months. :j

Today should be a 'no spend' day, 'should be' like it's not entirely my fault if it isn't :rotfl:. Working from home today after being in London for work at the beginning of the week. I love my job but it does send me up and down the country like a yo-yo.

I'll do some 'about me' stuff at some point but right now the ultimate comfort food of H3inz tomato soup with toasty croutons and melted cheese on top awaits.

getmore4less

Hi Getmore4less, thanks for stopping by! Aim for the stars and you might hit the moon, right?

or miss every thing and run out of fuel.

I am a believer in achievable goals.

There will be a sensible one between easy and cold turkey cut to the bone spending.

As a rough guide with 5 year being the £1500pm(2.5%)
4y £1,850
5y £1,500
6y £1,250
7y £1,100


eg
It could be that 7 years is easy, 6 years achievable with some care, 5years with more sacrifice, 4 years impossible.

The plan can start with a 6 year not going to fail goal a balanced workable budget that will get there, £1,250 secured every month

Then the incentive is to work on the squeeze to find another £250pm to hit that 5 years goal.

NotaBella

Wow, thanks for taking the time to work all that out! That's similar to what I have from Martin's Magic Mortgage Overpaying Calculator(TM) as well.

I get what you're saying, although there's a school of thought that suggests that people achieve more from setting themselves goals that are challenging even if they don't quite manage to do what they set out to. Given that the 'fuel' in this analogy could only be my cash or my motivation (and this is a completely voluntary endeavour) I'm not too worried. I do like the idea of being mortgage free before I'm 40 though.

It's achievable in the sense that it's possible but is going to take some focus on my part. I've been 'pretending' to earn £800 less than I do a month for the last 14 months, which is all about to be going towards the mortgage. All bills, treats (all of the treats, many treats) and emergency spends have come out of what's left with some wiggle room on top of that so I still think I can do better.

getmore4less

The skill is getting the balance between easy and unobtainable.

The problem with goals that are too tough there is the setup to fail issue where people give up once they clock it.

You need to start with the hard back stop non fail target.
Then put in the that will be tough goal.

In employment situations the set hard/stretch targets work because they don't tell you what the failure is till you fail.

NotaBella

@getmore4less, completely agree that it's not helpful in some instances but even 'failing' in this scenario is not a bad outcome for me. It's all paying it off and saving me interest. I used to work with people who were trying to be drug free - they called what you're describing the 'eff it' factor (with more colourful language).

So far this week in the interests of money saving I've cancelled my Netflix - it was mostly other people watching it anyway - and got a rail refund of for £13.75 so I only need to find another £180 from somewhere. I should say I get paid on the 15th so my months are a bit out of whack.

I wasn't joking about the holiday. Off to Venice next week, which is legitimately my favourite place in the world. What's not to love about all the boats, no cars and amazing food?! Everything's sorted but spends. I've got a couple of hundred Euros hanging around that I can top up.

After this month I'm going to start enveloping for things like this, possibly with actual envelopes. If anyone's got any tips on budgeting systems they'd be gratefully received!

getmore4less

Couple of hundred euro at least a hundred should go to the mortgage.

You have to have a no fail goal that work on a 5/6/7 year plan.

This holiday is the easy one, the 5 year plan will show how many more you can have.

NotaBella

Happy Friday! That was a loooong week.

Getting up to get a train this morning to Birmingham was not a fun thing after staying up too late chatting to an old uni friend who found a letter(!) I wrote to him way back and he unexpectedly and delightfully got back in touch. I'm in the Midlands so 'up' and 'down' are relatively straightforward but somehow 'across' is a struggle.

Resisted Pret at New Street but spent £7.29 on groceries on the way home and £1.50 on a bag of Minstrels the size of my face. I shouldn't need to buy anything else before I go away next week.

In the meantime, I have earned wine.

NotaBella

This has been an odd month. I feel like I've hardly been at home. The holiday turned out to be really low cost. It was with the fam and over my birthday so I didn't actually have to pay for much in the end. I've squirrelled away the left over cash in a shiny, new holiday fund.

Also need to start budgeting for car stuff. I found insurance for £330 which is £100 less than my renewal quote but having the cash on hand to pay it, rather than raiding my savings, was more luck that judgement.

I've managed a £63.75 overpayment on top of my regular overpayment so far which isn't too bad considering.:cool:

The other thing I need to get to grips with is my weight. I could do with losing 20lbs. I've been 'off the wagon' since Christmas and need to get it together. I've had success with the 5:2 diet so that's going to start again tomorrow.