Single gal balancing my way to mortgage freedom!

frankersBri

8 months on from my last post, time for a belated update!

So I am fully into funding my sailing adventure. I have 11 more months of payments for that, then it will be all paid and I will do circa 9months of saving the same amount to pay for the costs whilst away, and maybe a bit more travel either side of the actual sailing. All very exciting and expensive, but it's an adventure I am super excited about!

Consequentially, I've barely made any overpayments on the mortgage. But, that will change from next payday as yesterday I paid off the £11k loan I took out to renovate my kitchen last year. Thats £600ish a month I have to play with - need to plan properly, but some will go to upping pension payments and some to overpayments. Hoping to OP £1.5-2k this year now. 

Current balance - £165,715.11

LadyWithAPlan

Well done and this sailing trip does sound amazing! How long does it take? Are you taking a sabbatical or leaving your job?

I guess you have to cover all your bills whilst you are away as well but sounds like you have a complete budgeted worked plan so well done

savingholmes

Sounds exciting. Well done on clearing the kitchen loan so quickly.

frankersBri

LadyWithAPlan said:

Well done and this sailing trip does sound amazing! How long does it take? Are you taking a sabbatical or leaving your job?

I guess you have to cover all your bills whilst you are away as well but sounds like you have a complete budgeted worked plan so well done

Thank you - I am very excited! The overall race is 11 months (from September 2023 to end of July 2024). I'll be doing legs 7 and 8 which is approximately end of April until end of July. I am taking a 6 month sabbatical from work, which is exciting! Hopefully March-August. Depending on how my saving goes, I might tag some exciting other trips on the front/back of the sailing adventure!

And yes, have to cover bills whilst away, which I am saving up for as well. I have a regular saver that will be ~£3,700 for the "running the house fund", plus my student loan should be paid off in March so that money can go to it as well. Hopefully my lodger will still be around whilst I'm away (although need to check the technicalities of that), which means ~80% of the mortgage is covered through their rent. 

MovingForwards

There won't be any change with the lodger as it's still your home and you're only on holiday, not moving to somewhere else.

It's all very exciting and I'm so pleased for you.

frankersBri

A few small OP's gone in, total just short of £200 for this year now. I need to sit down and do a proper budgeting exercise given the change in bills and income with the loan repaid and student loans almost repaid. Do some calcs of what needs to be saved for silly sailing, what extra should go to pension and what is remaining for OPs. Will do this in the next couple of weeks. 

frankersBri

Total OP's for the year up to £419.73. Not loads, but not insignificant either. 

Debate I am having with myself now is - should I overpay or save? With savings interest rates rising, they are now higher than my mortgage rate, as I luckily fixed at the end of last year. 
So what I might do is open a new savings account, ear-marked entirely for mortgage OP's. Then when I come to the end of my fix at the end of 2025 I could pay a lump sum off when I remortgage. That lump sum would also include all of the interest earned. If interest rates tank again, I would then have money available to OP up to the 10% annual max each year.

Thoughts?


In other news, my lodger today has confirmed she will be moving out at the end of the month. Sad times, as she's lovely to live with and we have become friends over the last 9 months or so. I'm sure we'll stay friends as she's not moving far and is moving in with friends. Means have the task of finding someone new to live with! I'll start the hunt later next week - I have a lot going on this week/end as it's my birthday on Tuesday so have lots of fun plans!

Upped my pension payments slightly from last month too. Sensible, yes. But with the value of my pension dropping by the day with all of the stuff going on with the markets it's tough to take. Same when I look at my S&S ISA and S&S LISA... grumble grumble..

Got confirmation that the responsibility allowance I got earlier this year for taking on more teams at work has been made permanent, which is fantastic news as means the higher salary is permanent too. 

South_coast

Excellent work on the pay increase, and don't forget that putting more money into the markets when they are down is an opportunity to buy more units while they are "on sale" - that's what I'm telling myself anyway 🤣!

frankersBri

Thanks @South_coast - agree re: putting money in, I'm not going to stop it, I just don't like watching the value of what's in there already going down!

frankersBri

Been doing more thinking about the OP vs save decision.

I've applied to open a Santander easy saver. 2.75% is market leading and easy access. So I am going to ear mark this account for OP money. Hopefully will save in it, accrue interest and can then use it to reduce the morgage balance when I remortgage again in 2027, or make lump sum payments if the savings rates fall again. I'm in no danger of saving more than my 10% OP allowance per year so this feels sensible. I will treat the money in that account as untouchable, and will offset vs the mortgage so I can psychologically "see" the effect the saving is having. I opted to have interest added monthly so that helps too!

I've also emailed TSB who I have my mortgage with to confrim my OP allowance for this year. I technically have 2 mortgages

• ~£157k (original balance) ~ 0.89% fixed until Jan 2027
•  £14k additional borrowing (original balance)@1.99% fixed until Feb 2027 

Now my current balance is ~£164k, but I'm not clear on what the balances of each of the mortgages are as the app and website don't show that. So hopefully I'll get that information from TSB as I've asked for it. 
But, with the bulk of that borrowing at such a low rate, and the additional borrowing even below the current BoE base rate, it seems silly to OP when I can make more in interest from a savings account than what I would save in mortgage interest from OP's.