Mortgage free by 45

Hello,
Longtime lurker who has been tempted to start a diary and is finally doing it!

We are 5 in the house, 2 adults and 3 children 10 and under.  

It is a busy, noisy house but we love it.

Moved last year to a larger house so all the kids have their own room.   It needed (and still a bit to do) a LOT of work doing to it but we have done a lot and have made it our own.   We paid trades to do it as we are not very practical unfortunately!   We are MEGA lucky in that we have family who have funded the repairs and keep giving us the money to do this in drips and drabs so we haven't needed to save for this or increase debt.

The house cost £179k and we have 2 mortgages:

Mortgage 1 = £99 672 @ 1.69% which I’ve just refixed from 1/6/20 for 2 years (up from 1.39%)

Mortgage 2 = £5 181 @ 2.09% on a 2 year fix will expire Jan 2021

Both mortgages have 20 ½ years remaining

I’ve been OP on and off for both mortgages for the last couple of years.   We are with Nwide so 10% of original balance per year limit (I think I’ve managed about £800 on little and £1500 on bigger).   There is no method to my overpaying and I’d like to do more. Husband leaves me to it as long as all the bills, etc get paid.

Around Christmas I had a financial awakening and have been sorting myself out ever since.   The fact that our mortgage has just gone under £100k is inspiring me to start this diary.

I am 36 and had no savings having spent years working extra jobs (I work 25 hours and earn approx. £15k a year for my main job) to pay off maternity leave debts. I now have £2k (not loads but better than I was) and I’m saving a decent amount – approx. £400 per month but this is MY money and not for overpayments.   The OH and I pay an equal amount into the joint for house and child stuff and then the rest of our money is our own.    I’m funny about this and needing to be equal due to a parent being left in a bad situation when I was a child and needing that independence.

 Money is tight because we send our children to a LOT of different afterschool clubs.   Lockdown has made us question this and after a anxiety ridden start we are now enjoying the quieter pace of life (although we are both still working as key workers).    When the clubs go back we are halving the amount the kids go to which will free up time, money and head space.

All OPs will be from the joint account and stuff that I can ebay/ gumtree/find lying around the house, etc.    I do have a side hustle but I class this as my money.

Last month I had a plan although I’m starting to reconsider and would like advice.

Plan A:

I opened 3 savings accounts which now have the following amounts in

Big Bills £241

Holidays £50

Pay off small mortgage £310

I was going to try and save £5k in the Pay off small mortgage account and do this in Jan 21.

Big bills would be to pay the £200 p/m council tax in full next April and then that would free up £230 a month for overpayments.    The only thing is I’m impatient and itching to start seeing the balance coming down off the big mortgage so I’ve started to think Plan B might be the way forward.

Plan B:

Keep the holiday fund and keep adding to it (I’ve realised over the last few months that the reason that we can’t afford holidays like we used to is because of all the kids clubs) and I want to take the kids to as many places as possible while they’re kids.

Throw the bills money and the small mortgage money at the big mortgage.   This would potentially give us a £450 overpayment per month.   If I ignore the little mortgage it doesn’t really matter as it’s only £29 per month so I’d be fine if that ran its course over the 20 years.  

Target:

To make regular overpayments of at least £300 funded by the joint account/ TTs/ ebay/ gumtree and money lying around the house.    £300 per month would cut the mortgage by 9 years and I think with extras here and there I could get that down to being mortgage free by 45 (I’m almost 37).

I realise this is probably a very confusing post.    It sums up how my head is at the moment and normally I’d write something and then proof read it before posting but I’m typing quickly while the family are busy.   I’m trying to become involved with this forum quietly as OH won’t understand and I’d like it to be my private diary.

We don’t have an emergency fund but this doesn’t bother us (if the worst happens we can suspend the mortgage payments for a few months using our existing overpayments).   We both feel our jobs are fairly secure thankfully and we’re both on our usual salary.

Any advice on a best plan of action much appreciated – mortgage over paying and THE PLAN is what I spend most of my time thinking about and I can’t see the wood for the trees!

Many thanks in advance

MFGB


Jan update
2021 MFW #39  £228.76/£5000 
Current mortgage @ 1/2/2021  £94 900.00 
Mortgage end date Jan 2041. Current OP end date March 2039. Target June 2027.
2021 Personal savings £1 803.25/£5 880
2021 Personal Freetrade shares £102.81 (putting £50 per month in - love it!).
2021 Joint sinking fund £36.83/£500
2021 Summer holiday fund £330.35/£1350
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Comments

  • Thick_n_Thin
    Thick_n_Thin Posts: 329
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    I think your plan b would be the best option, if you can shave 9years of your mortgage and be free by the time your 45 then that is going to put you in a great position, if you know your target payment is £300 per month it’s surprising how inventive you can be to get there, my overpayment will differ from month to month but I have £350 as my target so I can look for sneaky ways to save here and there to help me achieve it.
    good luck I’ll be following your journey!
    Aiming to be mortgage free in 3 years June 2023. 
    May 2020 - £63,493
    Jan 2021 - £56,145
    April 2022 - £44,750
  • South_coast
    South_coast Posts: 4,779
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    I think I would focus on the small mortgage and then move on to Plan B - but that's only because the £29/month and small balance would really wind me up by their existence 😂
    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!!!
  • longway2go
    longway2go Posts: 1,006
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    Hi, 

    I just wanted to welcome you and wish you luck. I would also get rid of the small mortgage first as it would feel like progress was being made but that depends on what you would be charged to OP. 
    Those school clubs definitely add up and times like this really make you evaluate where money is going. 
    Mortgage Aug 2019 161,000 :eek::eek::eek:Nov 2019 156,500:T Jan 2020 153,122:T, Apr 2020 149,500, Apr2021 139, 675, Oct 2021 136,823, Dec 2021 136,120🙂EF 0/12,000 (0%)😕 (5062.44 was ERC), Jan 2023 128,650. Our Mortgage is never going to be as high as it is today. :jOnwards and downwards to a better life for our family. :jJust keep swimming
  • @thick_n_thin thank you, I'm also following your journey and I look forward to seeing your sneaky ways 😉
    @South_coast It didn't annoy me but now that's all I can see 🤣 I'm going to read your diary tonight and looking forward to it
    @longway2go Thank you, the ERC isn't much but I think I've decided to ignore the smaller one for the time being. It's a fun journey isn't it x
    Jan update
    2021 MFW #39  £228.76/£5000 
    Current mortgage @ 1/2/2021  £94 900.00 
    Mortgage end date Jan 2041. Current OP end date March 2039. Target June 2027.
    2021 Personal savings £1 803.25/£5 880
    2021 Personal Freetrade shares £102.81 (putting £50 per month in - love it!).
    2021 Joint sinking fund £36.83/£500
    2021 Summer holiday fund £330.35/£1350
  • Sooooo, I thought about it lots and I think getting it written down helped to clarify stuff.
    I think I feel that if I have savings pots and do my plan A then the bank will be winning due to interest rates or lack of! 
    So I'm going to throw everything at the big mortgage and just ignore the little one for the time being.
    I will keep the holidays savings pot (currently £50) assuming that we're ever allowed out of the country again!
    Maths isn't my strong point and interest is applied daily so it's hard to track but I think monthly interest is about £130.
    So to that end tonight I've made an overpayment of £550 and it felt great. It will take the balance down to £99 125!
    I did some messing around with the mortgage calculator and to achieve mortgage freedom by 45 I will need to overpay by £500 a month which is a lot!
    I know that I'll be able to achieve £300 from the joint account but the additional £200 I will need to get creative about.
    I've put some stuff on Ebay today and inspired by @Deleted_User I've put it all on 'buy it now' only, although I didn't realise it lasts for a month! If it all sells it would be £90. 
    I've got more to go and a pile of stuff for when it is morally acceptable to put stuff on Gumtree. 
    Given that I've done the £500 OP for May then anything that sells on ebay will go towards June's target.
    So I have my target and a plan of how to get there. Excited to get cracking!
    Does anyone know how to update the signature. I can't find it? 
    Jan update
    2021 MFW #39  £228.76/£5000 
    Current mortgage @ 1/2/2021  £94 900.00 
    Mortgage end date Jan 2041. Current OP end date March 2039. Target June 2027.
    2021 Personal savings £1 803.25/£5 880
    2021 Personal Freetrade shares £102.81 (putting £50 per month in - love it!).
    2021 Joint sinking fund £36.83/£500
    2021 Summer holiday fund £330.35/£1350
  • South_coast
    South_coast Posts: 4,779
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    Forumite
    @South_coast It didn't annoy me but now that's all I can see 🤣 I'm going to read your diary tonight and looking forward to it
    My sincere apologies....on both counts 😂!
    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!!!
  • Mortgagefreegonnabe
    Mortgagefreegonnabe Posts: 37
    First Post Name Dropper
    Forumite
    edited 16 May 2020 at 7:35PM
    So. I need to overpay by £500 per month. £300 is coming from the joint. £200 needs to be conjured up.
    Next is June. Email bill from energy company received today. We've built up some credit, more than we need, so I'm leaving a chunk there and have requested £50 back to start the June overpayment. Have also set up to give monthly readings via email. We used to do this with our old company and it was nice to know we were accurate. Seem to have lost that along the way.
    £50 / £200
    - Am in dispute with a company I bought something from and didn't receive which will bring back £10 if resolved (opened a paypal dispute) 🤞
    - Waiting for a refund for some tickets (amongst other stuff but the rest might take a while to come through) so that should be £24 when it comes
    - Have a few watchers on some of the Buy it Now Ebay stuff. Might reduce if don't get anywhere in a week.
    - Can anyone recommend the best app for selling books? 
    Off to keep thinking x
    Jan update
    2021 MFW #39  £228.76/£5000 
    Current mortgage @ 1/2/2021  £94 900.00 
    Mortgage end date Jan 2041. Current OP end date March 2039. Target June 2027.
    2021 Personal savings £1 803.25/£5 880
    2021 Personal Freetrade shares £102.81 (putting £50 per month in - love it!).
    2021 Joint sinking fund £36.83/£500
    2021 Summer holiday fund £330.35/£1350
  • Have requested info from Nwide about exact OP limit, dates and where I'm at so far.
    Also asked about moving the mortgage to come out straight after payday which is when most other bills happen so should make everything easier to budget. 
    Get paid this Friday due to bank hol and currently trying to make the food in the cupboards stretch as far as possible. Aiming for 4 NSD per week which should be doable.
    Got lots in cupboard it's just a bit eclectic and I might have to sneak some vegetarian bits past the kids. I like a challenge 
    Jan update
    2021 MFW #39  £228.76/£5000 
    Current mortgage @ 1/2/2021  £94 900.00 
    Mortgage end date Jan 2041. Current OP end date March 2039. Target June 2027.
    2021 Personal savings £1 803.25/£5 880
    2021 Personal Freetrade shares £102.81 (putting £50 per month in - love it!).
    2021 Joint sinking fund £36.83/£500
    2021 Summer holiday fund £330.35/£1350
  • Mortgagefreegonnabe
    Mortgagefreegonnabe Posts: 37
    First Post Name Dropper
    Forumite
    edited 17 May 2020 at 8:31PM
    Was meant to be at work until 10pm, got sent home at 8.30pm. Thought I'd stop off at shop next to work on way home to see if there were any reductions. Got £14.98 worth of stuff for £2.40. 
    Don't mind breaking my no spend day for that 
    Jan update
    2021 MFW #39  £228.76/£5000 
    Current mortgage @ 1/2/2021  £94 900.00 
    Mortgage end date Jan 2041. Current OP end date March 2039. Target June 2027.
    2021 Personal savings £1 803.25/£5 880
    2021 Personal Freetrade shares £102.81 (putting £50 per month in - love it!).
    2021 Joint sinking fund £36.83/£500
    2021 Summer holiday fund £330.35/£1350
  • frankersBri
    frankersBri Posts: 245
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    Just popped over to have a read of your journey and I'm super impressed by how focused you are! You've got a real plan and specific goals; that should really help you achieve them! I look forward to reading about your progress and how you find that extra £200 a month you want to find. Best of luck!
    May 2020 opening: £181,500, 21 year term. £14k additional borrowing December 2021
    Current balance: £153,493 (inc. offset in savings)
    MFW #37. Aiming to pay off by December 2033
    2023 OPs: £2,049.05
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