Mortgage free by 45
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.
I opened 3 savings accounts which now have the following amounts in
Big Bills £241
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.
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.
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
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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