Mortgage free before school fees begin!

edited 6 November 2019 at 4:04PM in Mortgage-Free Wannabe
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abz88abz88 Forumite
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edited 6 November 2019 at 4:04PM in Mortgage-Free Wannabe
Hi all,

Starting a diary in the hope that I can keep up my motivation to clear the mortgage and also pick up any handy tips!

In terms of the mortgage, I have just over £269k to pay off with 33 years and 9 months remaining on the term. We had to take out a 95% mortgage as we were caught by the second home tax (basically both my wife and I owned our own flats, but the market in Aberdeen had crashed (oil price crash) so we would be making a loss on our flats if we sold them (it would be a circa 40k loss on my flat alone) whereas we can rent them out and cover the mortgage payments and wait for the market to hopefully recover)

The main reason for paying off early is that we now have a daughter (4 months old) and have decided we will be sending her to a private school when she goes into secondary school (this is our own decision and I would appreciate if it is respected without this diary turning into a pros and cons of private school discussion). The fees in our area are around the same as our mortgage and paying both is not really an option.

Paying off that amount of money 20 years less than our mortgage term is set at is quite a daunting thought, so I am thinking that breaking it into smaller milestones is the best approach?

In terms of Milestone 1, our fixed rate is up in September, so the goal is to get from 94% down to 90% LTV to move down into a lower interest bracket so that I can increase over payments without changing the actual amount I pay a month in total. To reach this goal I have started an over payment of £500 a month. When its time to renew, I plan on "topping" up the over payment with money from savings if needed (I drip feed savings into RS's to get better interest rates, I could use this to increase my monthly over payments, but with a new baby and my wife on statutory maternity pay, I don't want to over commit as I am finding a lot of unexpected expenses pop up with babies!)

Any useful tips, please send my way!

Update: After my last monthly overpayment, I am down to 93% LTV, just another 3% to knock off for lower interest rates!

Replies

  • edited 30 October 2019 at 1:13PM
    Ellie78Ellie78 Forumite
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    edited 30 October 2019 at 1:13PM
    Hi abz88

    Welcome and good luck with your new diary! You'll find loads of useful tips and advice from reading other diaries here, I know I have.

    Some little things that can add up and make a difference are -
    Tilly Tidies (you'll see a few people mention these - TT) where you round up the pence left over from a transaction/purchase into savings/OPs, so if you buy a coffee for £1.60 put the 40p aside for an overpayment. Little amounts you wouldn't miss.
    Another one I like to do is keep rounding down the amount on the mortgage balance to the nearest £1, £10, £100 so the balance always ends in 00s depending on what cash I have spare in my account.

    There are other things you can do to bring in extra money or make savings like selling unwanted/unused items online, checking for old dormant bank accounts that might have bits of cash left in them, doing online surveys, couponing etc.

    Good luck!
    Mortgage - £23,500 remaining
    MFW2021 #8 - £2,519.77/£3,000
    Overpayments: 2020 - £4,722.83 / 2019 - £16,042.00
  • yogavibesyogavibes Forumite
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    Hi Abs88
    congrats on starting the diary. Your diary is a similar size to what ours will be when we remortgage this month. Looking forward to hearing how you get on. I'm also thinking of what smaller milestones will help - I'm going to set a yearly target I think - and then I'll add this to my signature and update throughout the year.
    YV
    MFW #69 Mortgage remaining Jan 2021 £221,644; Jan OP £1000;
  • Cornish_mumCornish_mum Forumite
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    Hi Abs88
    Just wanted to pop by and wish you the best. We are also on this journey for school fees. Only started when DS was 6, well done on your earlier foresight
  • cat04cat04 Forumite
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    I will follow your journey with interest! My mortgage is 'only' £47,150 (due to end Jan 2030) but I'm doing it on my own on a part time wage. I don't have school fees to pay but DD1 turns 18 in 3 years and 4 days (!!!) and there is a 99.99% chance she will be going to university. DD2 turns 18 in Sept 2025 and may or may not go to uni, but child maintenance and child benefit will end and I want to be able to help both girls on their further education journeys, or wherever life may take them. I can not do that to my full potential if I'm still paying offthis mortgage!
    Good luck and I look forward to your next update :)
    Extra savings aim for 2020 £4,000 £0/£4,000
    Original MF date Feb 2025. Currently Feb 2030:eek: Aiming for Jan 2025 :T
    Mortgage at [STRIKE]10/19 - £47,200[/STRIKE] 11/19 - £46,615
    :heart:My girls keep me going:heart:
  • Hi abz88,

    Similar mortgage size to you albeit only a 25 year term. Had to swallow a small loss (fortunately) on our 3 bed Aberdeen Terrace, but recently moved to the Shire into our forever home. Once finances level out in the new year, will be attempting something along the same lines.

    Good luck on your quest to pay it off early.
  • abz88abz88 Forumite
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    Hi Abs88
    Just wanted to pop by and wish you the best. We are also on this journey for school fees. Only started when DS was 6, well done on your earlier foresight

    Thank you and good luck as well! Yes, I found out how much my nephews school fees were and instantly realised that I would need to get to work on clearly the mortgage!
  • abz88abz88 Forumite
    303 Posts
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    Hi abz88,

    Similar mortgage size to you albeit only a 25 year term. Had to swallow a small loss (fortunately) on our 3 bed Aberdeen Terrace, but recently moved to the Shire into our forever home. Once finances level out in the new year, will be attempting something along the same lines.

    Good luck on your quest to pay it off early.

    The Aberdeen market has been a bit of a blessing and curse for us. A blessing as the house we purchased would have been at least an extra £30k (which we wouldn't have been able to afford) before prices crashed. A curse because we both bought our flats right at the high end before the drop! Good luck when you start your own attempt to pay off next year.
  • abz88abz88 Forumite
    303 Posts
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    Quick update, after my last monthly overpayment, I am down to 93% LTV, just another 3% to knock off for lower interest rates!
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