Lumiona's MFW Diary

savingholmes

Glad things are going your way.

Lumiona

OK so it's been a little over a year since I last posted. I'm still working on the end goal of repaying this mortgage and given future interest rates we now have a goal date of Jan 27 when our fix ends. However, we are still in the midst of the renovation. We've done the living areas and 2 of the bedrooms. Still have the expensive bathroom and kitchen to do but I've been playing around with my forecast and think we can still meet this goal.

I have a real dilemma about overpaying our low rate mortgage when I have every penny earning me 4%+ at the moment. So I will keep saving for the end date lump sum. 

Lumiona

Latest update is that as of this month, we are now on an absolute mission to be mortgage free by December 2026. The goal is to pay off £112k in 3 years. It is doable despite our average income but we will need to delay the bathroom and kitchen upgrades until after the mortgage is repaid. If we don't clear the mortgage it will cost us an extra £590pm in interest and I'd rather that go towards the house repairs we need to do. The overpayments will sit in an ISA and savings earning 5% until needed. I've run the numbers and this should earn us £7.5k in interest vs the £3.1k that will be paid on the mortgage in that time, (dependant on the savings accounts holding the current rates).

Month 1: Mortgage Bal £112k less OP Savings £2.6k = £109.4k left.

LadyWithAPlan

What a brilliant goal to focus on for 3 years especially with your 0.99 rate  
I am sure you will make it

Lumiona

Some huge strides made these last couple of months, cleared up a couple of accounts and reduced our reno savings in favour of overpayments. The payments will not continue at this amount going forward, likely to avg £2.4k pm

Month	Overpayments	Total O/paid	Mortgage Bal
Month 1	£2,649	£2,649	£109,819
Month 2	£6,029	£8,678	£103,393
Month 3	£3,731	£12,409	£99,265

Happy to see it under £100k though

Lumiona

We've decided to reduce our savings even further to fill up the Cash ISA before the financial YE. I should be able to send some more over at the end of the month after payday. It's so nice to see a huge drop at the start but it won't continue at this rate.

Current balances:

Month	Overpayments	Total Opaid	Mortgage Bal
Month 1	£2,649	£2,649	£109,819
Month 2	£6,029	£8,678	£103,393
Month 3	£3,982	£12,660	£99,014
Month 4	£4,090	£16,749	£94,527

Lumiona

Cash ISA is now full. I have a couple of other savings accounts to use until April. 

Mortgage balance £110879
Mortgage Savings £22258
Net owed £88621

Really happy with that so far, we are completely on track for the Dec 26 goal.

Archerychick

Well done! We are doing the same thing, with our fix ending next year. I’m running a spreadsheet to keep track which is very satisfying:) 
Some of the saved overpayments are within a cash isa (because I was able to get more interest than putting it elsewhere), allocated in my spreadsheet as a mortgage pot, I will ‘reallocate’ this money next year closer to when I need it. The other good thing is that the ISA is flexible so I can pull that money out next year and replace it in the same tax year with other money outside of my £20k.

if you haven’t you might want to look at a year fix on savings account so lock some of that money away to guarantee the interest 

Lumiona

Cash ISAs are quite new to me so trying to get my head around the rules.

My plan is to transfer my current ISA that is earning 5% to a 1yr fix asap after 6 Apr 24, opening a new Virgin ISA 5.25%. I hope to add to this as and when we can until it is withdrawn/ closed, which could be at any time. It looks like the rules are changing next year and I will be able to pay into more than 1 Cash ISA in a year so will open an ISA with Chip or Moneybox at 5.1% for the remaining funds of the 20k next financial year. 

It's 2026-2027 that I will need a flexible ISA as that will be when I'll be paying off the mortgage.

It's unusual that we are lucky to be able to take advantage of the high savings rates and low mortgage rate, we're usually at the wrong side of these things having bought 2 of our homes at the peak markets prior to crashes/ downturns.

Lumiona

Sorted all the ISA's out., I have until 7th May to put in as much as I can to the Virgin 5.25% ISA and then use the remainder of my allowance in the Chip ISA for the rest of the year.

Mortgage Balance	£110,481
Mortgage Savings	£25,232
Net Owed	£85,249