5 year mortgage overpayment plan - first step towards MFWb55

DFB35

I first joined this forum with quite a bit of debt and a target to be debt free by 35 (hence the username). Lots of things happened since then, it was quite a journey and now I'm back with the ultimate aim to be mortgage free by 55!

Being on the dfw boards has really changed my whole attitude to money and was a major turn around in my life, in fact it went a little bit too far the other way and I developed major guilt and aversion to spending. But life is about balance and especially being on a long mortgage free wanna be journey, it would be impossible to never have treats or holidays etc etc.. so this diary won't be about super scrimping but about living, being sensible with money and having a financial plan.

Ok where am I now? I am 35 and still debt free, we have a large mortgage of £215,232 @ 1.93% and are 5 months into a 5 year term - our 5 year overpayment plan!

We have made some mistakes along the way and one of those was taking out a 35 year mortgage, however after our 5 year term is done the plan is to shorten the term to 15 years! Yes that's right it sounds very ambitious to be writing this but this is my ultimate aim.

We also need to live a full life and enjoy ourselves while overpaying our mortgage and find the right balance!

So let the 5 year journey begin.....

AnotherJoe

Does your financial plan include a pension? be careful another mistake isnt losing lots of tax benefits especially as a high rate tax payer (which you probably are?) by focusing mainly/only on mortgage.

DFB35

The nitty gritty details...

I want this diary to be a super positive place, I mean we all know that life is not like that and I personally have my battles with social anxiety and low depressive episodes, but I want to really try and keep this out of this particular diary and focus on the positive steps that I'm taking. I'm hoping that this, in return, will help me with my mental health issues... fingers crossed!

Ok the finer details....

Because this will be such a long journey I will break this down into 6 monthly chunks/ mini targets. These are based on a minimum overpayment of £100 a month using the overpayment calculator, however once we get in the swing of it I aim to overpay by £200/£300 a month. But at the moment the idea is not to overstrech ourselves and to find the right balance..

First target: October 2019 - £212,275
Then:
April 2020- £209,318
October 2020- £206,298
April 2021- £203,278
October 2021 - £200,202
April 2022 - £197,126
October 2022 - £193,990
April 2023 - £190,854
And finally to have £187,656 by October 2023 - when it's remortgage time!

It will be very interesting to see how this compares to the actual figures in the future..

DFB35

AnotherJoe wrote: »

Does your financial plan include a pension? be careful another mistake isnt losing lots of tax benefits especially as a high rate tax payer (which you probably are?) by focusing mainly/only on mortgage.

Hi AnotherJoe and thank you for commenting

I currently have a standard work pension, but also planning on my own separate savings towards retirement. Will definitely need to look into that!

Goips

I think that you basically need to focus on the mortgage, as well as save all your costs.

beanielou

Happy shiny new diary:)