Aiming to be mortgage neutral in 7 years

MrsJoJo

I've been inspired by reading other diaries and am going to have a go at keeping my own. Hopefully this will provide motivation to reach my target and a sense of achievement when I look back. My ultimate aim is for us to be mortgage neutral by Christmas 2026 - nearly 10 years earlier than planned!

The balance on our mortgage as of today is £60,458.31 with a redemption date of April 2036. We are part way through a 5 year fix with Nationwide at the rate of 1.89%. Our monthly payments are £356.59 and I've just set up a standing order to pay an additional £125 per month bringing the total payment to £481.59.

We have a stocks and shares ISA with Vanguard which as of today is worth £13,912.30. We have been paying in £200 per month to build up this sum and will continue to do so.

I've been playing around with online calculators and have estimated the date we will have enough savings to pay off the balance on the mortgage will be around 7 years.

The figures at today are:
Balance outstanding = £60,458.31
Savings = £13,912.30
Difference = £46,546.01

I will update the figures regularly to check we're on track.

Hopefully we'll be in a position to increase overpayments/savings in the future but if we can stick to the above, I'll be more than happy. Thanks for reading.

ilselm

Hello! Best of luck in reaching your target and I’m sure you’ll be able to smash it

You have a similar goal as me which is to reach mortgage neutrality at some point over the next two years. Although I’ve decided mine is more of a motivational and financial security boost as I’m not, at this stage, planning to sell S&S ISAs or transfer cash savings and will continue (once mortgage neutral) to run down the outstanding mortgage amount with usual payments.

I’ll be following with interest! Thanks

MrsJoJo

Thanks ilselm and good luck with your own goal.

Like you, it's not our intention to cash in the S&S ISA to pay off the mortgage - it's more of a motivational goal to see how quick we can reach mortgage neutrality. We'll review the situation when we get there but leaving the mortgage running will probably be the best option! Like you say though, it will give a huge sense of financial security.

I was quite shocked to be honest when I used the calculators to realise how quick we might be able to get there. Hopefully the ISA will perform well and we might get there even quicker!

beanielou

Wishing you well on your journey

MrsJoJo

It’s been a month. Let’s have a look at where we’re up to:

Balance outstanding = £60,070.56
Savings = £13,904.79
Difference = £46,165.81

Not a great start! The S&S ISA’s not performing as well at the moment. We were able to make the payment of £125 off the mortgage but nothing extra. Need to make sure we have enough money for Christmas presents.

On the plus side I have applied for a job that will double my hours so fingers crossed I get it.

Good luck to all MFWs out there. Hope you have a good day:)

ilselm

Hi, although not great as you say but at least the difference is still heading in the right direction of travel i.e downwards! All the best with the job application.

paddyz

I’ve a similar amount and also planning on 7 years, so good luck I’ve little savings but paying 825 a month just now and will just plough as much as I can into it when I can, can’t wait to be mortgage free

Muhren

Hi MrsJoJo, just wanted to say all the best on your journey.

I will follow with interest as I am also trying to become mortgage neutral. Our figures aren't too dissimilar, except I have a slightly higher mortgage but have slightly more in savings/investments. So it will be interesting to see how you get on.

Dancingbecky

Hi MrsJoJo, we are also aiming for mortgage neutral in 7 years. Interested to see how you are getting on

MrsJoJo

Just a quick update with the figures for November:

Balance outstanding = £59,778.10
Savings = £14,407.33
Difference = £45,370.77

We made the usual overpayment of £125 to the mortgage this month together with £26.04 from TopCashback and £200 into the S&S ISA. Happy with progress so far!

I’m also moving to a full time role shortly so our income will rise quite a bit. Will focus on Christmas for now and settling into my new working pattern then look at how best to use the extra money in the New Year. Good luck to all MFWs out there. You inspire me!

paddyz

I’ve still to use top cashback that’s a nice little extra to add on top. :T