Mortgage free by 2030!

griffinsaver26

Had a diary on here years ago which helped me to become debt free. Unfortunately I’ve not been able to reset my password so the old me (copperjar) has become griffinsaver. And that’s not the only thing that has changed. Once I became debt free, I started to live my life. Got a good promotion at work, started going on holiday, doing things off my bucket list, met an amazing new partner and we bought a house together. It’s been a fabulous few years and I’ve remained debt free! But now with a bigger mortgage.

This lockdown has got us thinking of some life goals so we’ve decided to start over paying the mortgage, make some long term investments for retirement (eek!), save for some home improvements while still enjoying and living life! We have separate bank accounts and pay different elements of the household bills. I’ll be focussing on the mortgage for the rest of this year then we’ll both tackle it from Jan.

So to be mortgage free in 10 years would reduce the term by 8 years! I have often felt mortgage is just a regular outgoing which we might as well pay and it’s always seemed just too big to tackle. So time to set some short term goals. 

We’re a couple years in to a 5 year fixed term at 2.19% with £151,063 remaining. First goal is to get mortgage balance to £145k by end of the year. This means reducing it by £1000 per month - so an overpayment of approx £440 per month to cover interest and capital. I think that is massively stretching things but might as well have a challenge! 

I’m going to do this by increasing the monthly payment by £157 so it’s £1000 and find the rest with PADs, selling some bits and bobs, being a bit more frugal and planning a new monthly budget. 

I’ve always found a diary very helpful at keeping me on track in the past so let’s hope it works again this time. Here we go! 

LeighofMar

Happy new diary. Best wishes on your goals. 

griffinsaver26

Thank you
Made an overpayment of £100 today to get started and set up the regular over payment with the bank. I could really do with looking at my monthly outgoings to see where some savings can be made without causing too much impact. Looking at spending over past 3 months it’s obviously reduced massively by working from home and not going out! But our food spend has gone crazy - have food prices gone up or are we just eating more?! 

griffinsaver26

One thing I’m still really struggling with is moving from seeing my savings build to seeing the mortgage debt come down. I started back in the day on here with £23k debt and it was amazing living frugally to get it paid off ASAP. I then enjoyed seeing savings build. For some reason I’m struggling to get the same buzz paying off a couple of hundred pounds from a £150k mortgage! How do I change my mindset? 

LeighofMar

"For some reason I’m struggling to get the same buzz paying off a couple of hundred pounds from a £150k mortgage! How do I change my mindset?"
Something my BIL told my husband when he started out as an electrician doing multifamily apt projects was, don't look at the whole project. Take it one bldg at a time. So maybe looking at the 150k is overwhelming right now. Mini goals of getting to 149k and then 148k etc. Maybe break it up like that and see how how a few extra dollars moves you further than where you should be. I hope that's helpful.

griffinsaver26

Thank you. You’re right about breaking it down into smaller goals - my first aim is to get to £145k by Christmas, still feels massive but I guess I need to focus on the £6k reduction rather than what’s still left to pay!  I’ve just found my old Debt Free Wannabe diary actually and I had a big loan that by snowballing was 7 years from being paid off! So that’s not much less than the goal for this mortgage. Need to keep reminding myself of that and how quickly I managed to get it paid off. 

Ive sorted out my accounts and read some more articles today - just getting my head round investing. Wish I’d started years ago! 

LeighofMar

"Wish I’d started years ago!"

I know. But you know the old saying, "The best time to plant a tree was 20 years ago. The second best time is now." So you do what you can, and you're doing great. 

griffinsaver26

So I’ve been reading some diaries and getting inspired. Also looking at hints and tips for making regular over payments to keep on track. My plan of action:
1. Increase regular payment to £1000 per month
2. Balance all my spending pots to nice round numbers at payday and make another over payment 
3. Round down spending pots at end of each week
4 Make a payment every Friday taking the balance to a round number 

Can you tell I like round numbers?! So far this month I’ve made several over payments totalling just over £340. It’s a bit easier right now because I’m not spending anything other than on food. Filled the car up last week for the first time since March! 

Also this lockdown has got me thinking about some of the big companies making (literally) billions out of this while small businesses are on the edge. So I’ve decided to stop using Amazon for anything I can buy locally (within reason!). That also prevents the daft boredom spending. 

andrea1968_2

I can see a lot of similarities in our stories. 
In 2006 when I met my now husband I had £25k of debt, snowballed it thanks to this website and cleared it. Then managed to save £23k for a deposit on our house in 2 years by literally saving every single spare penny,
Having bought a do-er upper for £93500 in 2013, we've managed to get the debt down to £45600.
Initially we were only able to overpay by £50 each month but it was still chipping away slowly.
We're now currently overpaying £200 a month with a hope of being mortgage free in 8 years as opposed to 13 years by not doing it.
That from a starting point 14 years ago is a turnaround I'm proud of.
I used to go on the debt free wanna be forum daily to keep me inspired and focused and it certainly helped me a lot back then so I've decided to start having a look on this one as well. 
I'll be following your journey closely, good luck!! 

Ellie78

griffinsaver26 said:

Ive sorted out my accounts and read some more articles today - just getting my head round investing. Wish I’d started years ago! 

Hi GS.    I agree with LeighofMar, better late than never!   I only set up my pension savings and started OPing the mortgage last year (at 40).  Break your targets down into smaller goals (every £1,000 paid off, every 1p/£1 off the daily interest rate etc) so it doesn't feel like such an uphill slog to each milestone.  
I always try and make sure my mortgage balance has 00s on the end after each payment goes out or interest is added on.  Whether it's a few pence or a couple of hundred, depending on how flush you are at that time.  You'd be surprised how much of a difference that makes over time.   Good luck! 

griffinsaver26

Thanks for your comments Andrea and Ellie. Sounds like we have similar stories and goals. Looking back to when I paid off my debts, it was the regular small payments that really added up and the buzz of seeing the difference of just paying a few pounds here and there. 

I made another overpayment yesterday and I’m on track so far. Need to work out some smaller goals to get to the end of the current mortgage fix in April 2023. 

One thing that was a real game changer for me a few years ago was the YNAB app. Amazing! I think I tend to over budget for regular monthly expenses like groceries and frivolous spends so I think it’s time for a review.