Fighting the mortgage interest

Numbercruncher_mfw

julicorn said:

Just wanted to stop by and say happy not-quite-super-new-but-still-fairly-new-in-the-grand-scheme-of-things diary! I'm looking forward to seeing you tackle this mortgage
Balancing the mortgage with other goals is important. For us, the key was budgeting and being really clear on our priorities and how those change over time. We still spend more than the average person (I think at least!) on holidays, but are fairly frugal in other areas, simply because they are areas that we don't care about all that much. We have cut back a lot of spending in some places to be able to throw lots of money at the mortgage, but those cuts haven't had any impact on our happiness or enjoyment, simply because they weren't that important to us in the first place. We were spending money because we were used to spending it, rather than it having that positive an outcome. 

Thanks! I see from your signature that you’re MF journey is going amazingly well - over 60k in 2 years is huge. I’m looking forward to reading your diary from start to finish. 

Numbercruncher_mfw

Well we we’re  greeted with cat sick on our doorstep when we left for our daily walk yesterday. I’m hoping there’s isn't a cat in the street who has a vendetta against us  . All sorted with soap and water.

Our takeaway was disappointing too as they forgot to put in my curry when they delivered 

Numbercruncher_mfw

Morning, I can't believe it's weekly update time again - I feel like the past week has flown by. Some highlights and musings from the week:

• The weather has been glorious and I've really appreciated the daily walk.
• Unfortunately our May trip abroad was cancelled a few weeks ago but the refund came through this week. One positive of this is that I now have £5k in my emergency fund account. This is the most I've had in the bank since we moved in 3 years ago. I've always made sure I've had at least 1k in an emergency fund however the current situation has made me re-evaluate this amount and realise that only 1k in the bank only gives us a 1 month safety net if we were both to lose our jobs. Just putting this in writing so I can look back at this and remember that it feels secure to have a chunk of money in the bank. My plan is to increase this to £6k which represents about 6 months of expenses to run our property (excluding grocery bills). 
• We've been pondering the idea of moving to a house rather than a flat as our place has felt very small in lockdown. Our issue is that we love where we live and houses in the same area would see our mortgage double and would be unaffordable. We've had a little look online and the cheapest house closest to our desired area would still see around a £70k increase to our mortgage. I'm not sure how I feel about increasing the monthly costs. Of course now is not the time to think of moving given economic uncertainty but maybe one to continue to ponder on over the next few months. 

jenni_fer

Sorry to hear your holiday was cancelled (ours was too but refund credit for us atm) but having a strong emergency fund sounds good.
I've always worked on being able to live for 6 months with no changes to spending habits (knowing that of course we would be more careful) which gives a huge amount of security both in situations like this and also when I hated my job enough to resign without a new one to go to.

House wise, wait and see how you feel a couple of months post lockdown. I think you might feel better about the size of your flat again but also you might find prices slump a little so the gap between what you have and what you want gets smaller and more manageable.

Numbercruncher_mfw

jenni_fer said:

House wise, wait and see how you feel a couple of months post lockdown. I think you might feel better about the size of your flat again but also you might find prices slump a little so the gap between what you have and what you want gets smaller and more manageable.

Yes I definitely think we’ll feel differently once lockdown is over. Sorry to hear about your holiday too, hopefully it won’t be too long before flights can resume as normal. 

edinburgher

That's a decent mortgage rate. We need to remortgage in 6 months time - looking forward to getting off our 3.65% current rate!

Our balance is about £15k higher, so similar circumstances

Numbercruncher_mfw

edinburgher said:

That's a decent mortgage rate. We need to remortgage in 6 months time - looking forward to getting off our 3.65% current rate!

Our balance is about £15k higher, so similar circumstances

Yes I've been very fortunate in that I bought when interest rates were so low, my initial rate was 2.89%. 

Numbercruncher_mfw

Well it's been a bit of an uneventful week. We had an Indian takeaway this weekend which was amazing compared to our takeaway disaster drom two weeks ago (it was from a different restaurant I might add). Chicken Bhuna is my dish of choice in case you were wondering 

My aim for this week is finish my book. I'm reading Castle of Water which is a novel about two tourists who are in a plane crash and get stuck on an uninhabited island. My OH read it and said it was brilliant; I'm about a third of the way in and not feeling it yet. 

I've realised I'm OBSESSED with mortgage overpayment calculators and constantly battle in my head between throwing loads at the mortgage and having a healthy balance between savings/spending. My plan is to choose one monthly OP amount and forget about the calculators and just let it all take care of itself. 

My options:

• Match the mortgage interest which I set out doing at the start of this diary. This takes our monthly payment  (standard plus overpayment) to £834. A £246 overpayment. 
• Round our standard payment of £588 to £1,000 which is a nice number and doesn't stretch us too much.  A £412 overpayment.
• Reduce our capital by £1,000 a month. This would require a total monthly payment of £1,250. This is doable but I don't want myself or OH to feel as if we are depriving ourselves. A £662 overpayment. 

I'm going to try this month for £1,000 (overpayment of £412) and see how we feel. I'd love to have a cup of tea with my future self to get advice on what to do with my money. I'm frightened of frittering it away "living for today" and falling on hard times without any money stored away but also frightened of wasting the rest of my 20s/30s worrying about money and not being happy spending it. Does anyone else feel the same? 

Late1stTimeBuyer

It's interesting reading a few of these mortgage free diaries, even though we haven't got a mortgage yet. We're looking into buying and I'm already planning how to overpay and whether to do it monthly or annually. I think planning it from the start is the best way and I like the idea mentioned earlier in that it's a marathon not a sprint. 

Oh and a little suggestion, if you like chicken bhuna, have a look at Rafis Spicebox, it's one of my favourites and so easy to make yourself. 

discotek

Numbercruncher_mfw said:

I'd love to have a cup of tea with my future self to get advice on what to do with my money. I'm frightened of frittering it away "living for today" and falling on hard times without any money stored away but also frightened of wasting the rest of my 20s/30s worrying about money and not being happy spending it. Does anyone else feel the same? 

I know exactly how you feel - I'm 27 and my partner and I are trying to do a balance of fun stuff vs overpayments. On top of that I'm torn about whether to do some minor changes to the flat (such as replacing carpets and floors) vs overpaying. Our first year of having a mortgage is up in September and fingers crossed we're hoping to make a 10K overpayment. The plan is to get down from 75% LTV to 60% LTV by the time we re-mortgage next year. I'm curious about people who regularly overpay vs someone like me who'd rather wait until the last possible moment and keep the cash in the bank. This anxiety is probably more rooted in the fact my partner is self-employed and can't always predict what his income is going to be!
I think that we've got this on our radar early on definitely will pay dividends in the future!