£134000 in 6 years

try_harder

A new year is coming and a fresh start is needed ..After being completely rubbish at keeping up with my old diary I thought i must try again .
I now owe £134,000 or at least i will do by the first of January so new calculations to be made .I must now try to find around £430 a week ,huge ask but as my mortgage is interest only i have no choice but to try .
Starting in Jan i shall be dividing up the money each week three ways , my Isa ,Premium Bonds and an overpayment to the mortgage will all get a share , im going to try that for a while and see how it goes.
My main priority is to try and post on here much more regularly ,i just don't know where the time goes

Want2BeFree

Good luck; what is the interest on your mortgage?

Mathematically you should put all your money to the highest return; either the savings from the mortgage or what you can get in a savings account rather than splitting it up. However this is very commitative and you will need to manage your budget to ensure you have liquidity to pay the larger bills throughout the year.

try_harder

Thank you ..Im not sure now , I think its just under 3%..Im hoping that by dividing the money three ways im covering myself slightly just in case my Isa has lost money

Socajam

As interest rate is low, how about changing your interest only mortgage to repayment, get a fix rate and keep the endowment?
You can still make overpayment on the mortgage and get some money back when the endowment matures.
I followed this route: mortgage was 60,000 interest only, changed to repayment and overpaid.
Kept endowment and was able to have 50,000 when it matured.
My mortgage was taken out in 1989. I became mortgage free over 5 years ago.

try_harder

Thank you socajam for your advice . Unfortunately we don't have an endowment .We took out an interest only mortgage as that was all we could afford at the time and now it would make our mortgage payment around 3 times what we pay on an interest only and if something happened and we couldn't find the mortgage money we would lose our home so a repayment mortgage is not really an option for us

phillw

Premium bonds average return is 1.4%, you are effectively borrowing money at just under 3% to invest it at 1.4%

The way you talk about losing money on your ISA is that it's stocks and shares, I wouldn't consider anything that risky when you have such a large outstanding mortgage and the reason for not taking a repayment mortgage is in case you lose your job. I watched my s&s every month looking at the return when I had to deal with my finances seven years ago, I pulled it out when there was a bounce.

I'd store some emergency cash at the highest rate you can and pay everything else off the mortgage (as long as there is no repayment penalty). As a couple I think you should be able to open three TSB accounts and store £1500 in there at 3% for example (one each of your own name and one joint account).

try_harder

Thank you phillw ..I completely agree with everything you suggest ,I am just too nervous to put all our money into the mortgage in case something does go wrong, there is only one wage earner and if anything was to happen to him and he was unable to work we would be in a muddle but next year he will be working more hours so possibly I could change some of the percentages I want to pay to each with more going into savings risk free .Thank you again

try_harder

Aims for 2020 ..

Stick to my food budget .This has been my downfall over the last year so I shall be trying much harder this year to stick to my budget and eat healthily

I should then have £200 a week left or thereabouts and this is where the 200 will be going
1.£93 a week to mortgage .This will completely pay off my Sub Account 2 in one year saving me £127 a month in repayments for the final 5 years
2.£50 a week into Premium Bonds
3.£50 a week into my ISA

I will then be left with £230 a week to find ,this will be a challenge and will come as always from my husbands overtime ,ebax ,gtree and fbook sales ,surveys ,etc etc .I am aiming to save £24,000 in total over the year of which £10400 should be relatively easy but the remainder will not !! My main priority will be to stay focused

Week 1 of 52

£93 paid to mortgage Sub Account 2
£50 paid to PB
£50 paid to Isa
Now on to finding the next £230 this week ,this should be fun

Busy_Mee1

Hello Try Harder. Lovely to see you back. I think I must have been away when you started your new diary.

Some great goals for 2020 and I agree that paying off your sub mortgage this year, will allow you to snowball that payment to your main mortgage.

try_harder

Thank you Busy Mee1 , you always inspire me

try_harder

Week 1 total saved £365.66 .I am so pleased with this , we have worked really hard this week to keep to our budgets ..The best was the food which came in at £67.97 for the week

Total so far for 2020 £365.66.Now on to week 2