Fighting the mortgage interest

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  • savingholmes
    savingholmes Posts: 27,334 Forumite
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    Lots of people learn to drive later in life. Is it definitely the driving or do you need a different instructor?

    Just caught up on your MFW journey. You are doing so well.
    Achieve FIRE/Mortgage Neutrality by mid 2030
    1) MFW Nov 21 £201,999 with 237 payments to go - now £184,341 Equity 26.26%
    2) Spend on handyman & external building works & new patio door £11.9K
    3) CC £3.9K on 0% spends card but offset by £34.1K savings (part EF, part future home improvement)
    4) Mortgage neutral by June 2030 AVC £9.6K/£127.5K AVC target 7.5% value @15/4
    5) FI Age 60 annual income target £13.7/30K 45.7%
  • Merry Christmas, I thought I'd do my Christmas and 2021 update whilst I remember. I've just tidied the flat and I'm currently procrastinating from wrapping presents. 

    This year has been the most challenging year for me so far: lockdowns, working from home and a change in role really took their toll on me earlier on this year and I've just started feeling back to normal and optimistic in the last couple of months. The experience has really reinforced what is important in life and reminded me of how good it is to have a bulky emergency fund when life throws you curveballs. 

    Mortgage:
    Mortgage at start of 2021: ~£139,800
    Mortgage at end of 2021: ~£132,800. 

    That's £7k off the mortgage capital, it was really £8k but my recent remortgage fee added £1k to the outstanding mortgage. The recent remortgage in October brought my interest rate down from 2.04% to 1.16% and is fixed for 5 years, which seems a good move given the recent BOE rate rise. We are still continuing to pay £834 per month towards the mortgage so our outgoings remain unchanged although the overpayment amount has grown. 

    Savings
    I currently have just under £12k in savings/investments which I think is a phenomenal emergency fund. I could currently pay my half of bills/food for at least a year if needed (if I lost my job) or could pay the household outgoings for atleast 7.5 months. I hope to add to this in next year. 

    Some financial aims for 2022:
    • Pay £10k off the mortgage capital. This will involve paying our current £834 per month and then repaying the value of the year's mortgage interest, this should roughly be ~£1,500 (1.16% x £132,800). I'm considering persuading my partner to do a very frugal February and try to pay this all in one go then by having a minimal spend month. It can be quite a fun challenge if you condense in to a month. I'm aware we are very lucky to have the incomes (and low expenses) that would allow us to save such a vast amount in a month. 
    • Continue to save/invest. Whilst I am all for overpaying the mortgage, having liquid assets is really important for emergencies.
    Have a great day tomorrow and feel free to let me know what your financial aims for the next year, I'm interested to know how similar they are to mine  :)
  • savingholmes
    savingholmes Posts: 27,334 Forumite
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    Well done on the EF and low monthly outgoings and good incomes. It all helps. Well done on the mortgage clearing too and the rate!

    I think this year I am due to repay £7.5K off the capital with a 1.84% interest rate fixed for 5 years. I want to overpay at least £20 pcm - so that by year 5 I owe at least £40K less than I do now. I also want to top up my pension by around £50 pcm - as part of a mortgage neutrality goal.
    Achieve FIRE/Mortgage Neutrality by mid 2030
    1) MFW Nov 21 £201,999 with 237 payments to go - now £184,341 Equity 26.26%
    2) Spend on handyman & external building works & new patio door £11.9K
    3) CC £3.9K on 0% spends card but offset by £34.1K savings (part EF, part future home improvement)
    4) Mortgage neutral by June 2030 AVC £9.6K/£127.5K AVC target 7.5% value @15/4
    5) FI Age 60 annual income target £13.7/30K 45.7%
  • Well done on the EF and low monthly outgoings and good incomes. It all helps. Well done on the mortgage clearing too and the rate!

    I think this year I am due to repay £7.5K off the capital with a 1.84% interest rate fixed for 5 years. I want to overpay at least £20 pcm - so that by year 5 I owe at least £40K less than I do now. I also want to top up my pension by around £50 pcm - as part of a mortgage neutrality goal.
    Sounds like a good plan
  • South_coast
    South_coast Posts: 4,913 Forumite
    First Anniversary First Post Name Dropper Photogenic
    Not a pipe dream at all, it sounds like a wonderful plan 😀! Good luck to you x
    Mortgage start: £65,495 (March 2016)
    Cleared 🧚‍♀️🧚‍♀️🧚‍♀️!!! In 5 years, 1 month and 29 days
    Total amount repaid: £72,307.03. £1.10 repaid for every £1.00 borrowed

    Finally earning interest instead of paying it!!!
  • Not a pipe dream at all, it sounds like a wonderful plan 😀! Good luck to you x
    Thank you. Have you noticed a big difference in your life since clearing your mortgage? 
  • South_coast
    South_coast Posts: 4,913 Forumite
    First Anniversary First Post Name Dropper Photogenic
    Hmmm.... I wish I could say yes, but there have been lots of other things I wanted to save up for since, so in terms of disposable income there hasn't really been much change. However, that was always the plan so I went into it with my eyes open. It does mean that my bills are now less than £400/month though, so I could very easily change my career/working pattern without any drop in my standard of living, as all that would be impacted is my capacity to save as much so that does give a huge amount of peace of mind. I'm definitely glad I did it
    Mortgage start: £65,495 (March 2016)
    Cleared 🧚‍♀️🧚‍♀️🧚‍♀️!!! In 5 years, 1 month and 29 days
    Total amount repaid: £72,307.03. £1.10 repaid for every £1.00 borrowed

    Finally earning interest instead of paying it!!!
  • savingholmes
    savingholmes Posts: 27,334 Forumite
    Name Dropper First Anniversary Photogenic First Post
    Sounds a fab dream. I would like the option to go part time in future too - but feel like it would take a miracle currently.
    Achieve FIRE/Mortgage Neutrality by mid 2030
    1) MFW Nov 21 £201,999 with 237 payments to go - now £184,341 Equity 26.26%
    2) Spend on handyman & external building works & new patio door £11.9K
    3) CC £3.9K on 0% spends card but offset by £34.1K savings (part EF, part future home improvement)
    4) Mortgage neutral by June 2030 AVC £9.6K/£127.5K AVC target 7.5% value @15/4
    5) FI Age 60 annual income target £13.7/30K 45.7%
  • Sounds a fab dream. I would like the option to go part time in future too - but feel like it would take a miracle currently.
    Good luck with it :) 
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