Mortgage Free Sooner rather than later

family355

Hi, 
I’m pretty new to these boards but have been reading through lots of threads and posts for idea’s and inspiration. I recently came across a mortgage statement that got me thinking ‘should/could we pay it off earlier?!’ We’ve been paying a mortgage for 13 years but have moved 3 times up the ladder. We’ve had our current mortgage for 7 years on this house and took out a couple of credit cards last year to do some jobs. 

Stats are currently:
*mortgage balance:£101,343
(term left 18 years, 2 year fixed 1.99% until Sept 2022)
*credit card debts:£10,768
(0% rates ending Sept 2020, March 2021, March 2022)
*Easy access savings: £4125
*LISA: £5000

Our savings are to pay off credit card debts as each 0% ended however have wondered if we OP on mortgage instead would we save more in interest overall (whilst keeping up with payments) 
we can comfortably afford around £400 a month OP on the mortgage. 

I would love to know any advice on the best way to reduce the term of the mortgage (Ideally to under 10 years) And opinions of clearing debt vs OP mortgage. 

Thank you 

family355

Decided *I think on a plan and done a money shuffle to set me off on the MFW journey...
*£137 monthly OP-mortgage now rounded up to a tidy £700 per month
*Pay 5% Lump sum Annual OP-2020 Aim=£5170.97
*Clear Credit Cards as 0% Ends-Sept 20, March 21, March 22 
*£50 per month into both ISA’s
*5k shuffle into premium bonds towards annual OP/Credit Card until things are a little clearer as DH is still on furlough and could end up in the redundancy pile 
*5k LISA-not thinking about this yet
*£609 in the general need a few hundred quid pot ie car MOT/service etc 
Feels exciting to make a start...I even paid the untidy £11.17 at the end of the mortgage to get it to £100,800-Now I cannot wait to get below 100k and cannot believe I have never done this before! The £11.17 alone has saved £4.78 in interest-WOW!! 

Enjoying reading everyone’s journey to keep motivated!! 😁

bit_by_bit

Good luck family355. I have been slowly clearing my mortgage and planning for my retirement since 2013 when I decided I wanted to retire at 55. I am very close to taht now. 
I keep a spreadsheet of all my wins, no matter how small and have joined the 2020 in 2020 challenge (third year on this). This way I look at all the alternative ways to save bits and bobs. Savings on food, cashback, refunds, surveys, roadkill (pennies found on the street) It adds up. 
Don't be down on yourself if you have months whereyou are not motivated or things don't go to plan. At least you have an emergency fund with your current savings.  Just a monthly tidy up of accounts will make a difference.

SpoonKat

Hi and welcome, 
regarding the credit cards, if you go into the interest being charged on them you will be better off clearing those before overpaying on the mortgage as the interest rate will be a lot higher. I would look to pay off debt first then build an emergency fund before overpaying , good luck 

longway2go

Just wanted to wish you lots of luck on your journey. I am sure you will be so motivated when you get under 100k and you are so close.

family355

Thank you so much for the warm welcome bitbybit, spoonkat & longway2go. I don’t have any other social media type platforms so typing in this forum was a little daunting but something I wanted to do to make myself a little more accountable. 

Bitbybit...you have reminded me of the 1p,2p,5p jar we have. It’s been forgotten in the last few months with all the contactless payments so I’m now intrigued to see how much is in it! My DH has been making use of his furlough time completing surveys, he’s not far off £50 in the last few weeks. Just need to shuffle this off him and figure out which pot to put it in🤔😂
Spoonkat...The credit cards are currently on 0%, I had read about snoozing... 5k costs £55 fee for 2 years interest free whereas 5k OP on the mortgage would save £2k interest and knock 1 year off the term. I do agree though getting rid of the debt appeals more right now so will aim to get rid of these and make smaller Mortgage OP for the time being. 

Although DH is on furlough at 80% we are saving on his diesel costs. School closed also saves around £200 a month on school dinners and bus passes (1@primary, 1@high school, 1@college) so have had a little extra to shuffle about.

family355

🎢 It’s been a roller coaster month. 

We were convinced DH would lose his job and they asked/made him use 3 days annual leave for June. He then had a call on Monday to return the next day stating his shift pattern would change. Annoying, as he took the job in the first place to be able to pick our youngest child up from school so not sure how this will play out in September but for now it is not an issue. He has now been given a pay rise due to the shift change and has been working overtime due to the volume of work so this is great news for our longer term OP plan. 
Figures are in for the month. 

Mortgage into the 90’s now £99,950🙌🏼

Made up of £137 regular OP, £65.10 survey/cash back OP, (£19.99 was in the penny jar) then couldn’t resist an extra £252 OP so it matched the C/C. Sad. I know🙈
Credit Cards £9,950 (£640 paid off these since last month) 
£730 in the ‘need a few hundred quid fund’ including sorting my car MOT & Service 
All other pots remain the same. 

We have booked to visit a theme park to give us all a bit of something to look forward to. I’m not sure whether the social distance/low number admitted will be a good thing or really stupid idea but either way the girls are really excited to finally be leaving the house, experiencing the new norm and have something to look forward to albeit with face masks & hand gel 🙂

family355

Checking in with the figures as my term has just reduced to 17 years! 

Mortgage 97,350

C/C debts 8100
Bonds 7k-still no winners here 🙇🏼‍♀️

1875 in New ISA’s- 4K in existing

£753 in the need a few hundred quid fund-All Car MOT’s/Service, Insurance’s etc have been paid in full this year instead of our usual monthly direct debits. 

I have slowed slightly with the mortgage O/P’s to try and balance this with bonds/savings and paying off renovation debts. Although the debts *could have been paid by now in reality they wouldn’t as it’s not as motivating to see that mortgage move down or those savings creep up.  The debts are still at 0% until ‘22 so I’m happy with where I am at compared to the start of our journey in May!  

Next goal is to keep on track during Xmas and start 2021 in a better financial position 👀

hannah021

you're doing really well there, keep it up. I'm really worried about the whole mortgage business, i wish there was something interest free, the thought of being in a chase up game with interest is the only reason im still without one. Sick of paying rent, yet few hundred thousands is potentially unpayable.

It is really uplifting to have a community for "lets do it together sort of thing"... i hope you keep it up

family355

Thanks for stopping by! 

I wish there was something interest free too! My interest is just over £5 a day which seems ridiculous to me however I just always viewed it that eventually it would be mine. It also worked out cheaper to have a mortgage-my standard payment is £563 a month compared to a house on my street to rent at £1300 a month. I couldn’t afford that! 

This board is very inspirational and you found it a lot sooner than I did in the journey-Good Luck & Thank you for your kind comments 🙂

rugbymadfamily

Hi @family355 sounds like you have a good solid plan in place and doing well. I found it helpful posting my SOA as people had a few good ideas for areas where I could look to reduce my spend to be able to put it to mortgage OPs instead.

The interest part is tough....mine is currently roughly £22 a day in interest 😱 but I live in a London suburb so it's just more expensive! Interesting thought to see what it would be to rent similar house in your street, I might be nosy and do that for mine at lunchtime!