Financial Freedom through Mortgage Freedom!

Hi, 
My desire is to live a life of financial freedom. I think one of the main ways to achieve this is to attain mortgage-freedom. As such, we recently (June 2020) became 100% debt-free and I believe this is the best time to begin focusing on our mortgage-freedom. 

The figures:
Our mortgage debt is: £65,993.68
Interest Rate: 3.38% fixed
Remaining term: 14 years and 6 months 

Our strategy:
We don't really have a strategy per se, but we are on hyper-mode. Meaning, every penny we have left over we overpay on the mortgage. We found out that the maximum Early Repayment Charge we could get charged is just shy of £3,500 and I don't mind paying this as long as we are mortgage-free. 

Prior to starting this thread, we had only ever made 1 over payment of £500 lol. I'm SO ready to be mortgage free NOW! and I'm going to make sure it happens. One thing that led me to this was the debt freedom. Ever since we have been debt free, life has been more stress free because we need less money to live. Our largest bill currently is now our mortgage and I know that once we are mortgage free life will be much more free because we will have more freedom to choose what we do with our time. We won't HAVE to work. Working will be a choice, and even then, we will be able to work part time and still live a relatively good life. 

I can almost taste the freedom! Also, I believe this mortgage will be paid off in a short amount of time because, £65k isn't much especially with the 10% over payment allowance and relatively good income streams. Let the journey begin! 
Mortgage Repayment Tracker: 21/03/2021: £85,995.00

10% MOP 2021: £1098.57/£8599.50

1% MF Challenge 2021: £65.01/£849.50

 My MFW thread: https://forums.moneysavingexpert.com/discussion/6167354/financial-freedom-through-mortgage-freedom#latest

He who dares wins! ~ Winston Churchill 


 

«1345

Comments

  • I forgot to mention that, this year I haven't overpaid a single penny.
    So, we have £6,794.64 remaining to overpay (without an early repayment charge). As such, I am putting away small amount of money until we reach that amount and just overpay it as a lump-sum. Our goal date to overpay this by is 30 September 2020. 
    Mortgage Repayment Tracker: 21/03/2021: £85,995.00

    10% MOP 2021: £1098.57/£8599.50

    1% MF Challenge 2021: £65.01/£849.50

     My MFW thread: https://forums.moneysavingexpert.com/discussion/6167354/financial-freedom-through-mortgage-freedom#latest

    He who dares wins! ~ Winston Churchill 


     

  • longway2go
    longway2go Posts: 1,006
    First Post Name Dropper First Anniversary
    Forumite
    Welcome and good luck. Although your rate isn't massively high you may be able to get a better rate. You would need to make sure this would still save money taking fees into account but worth a look. 
    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
  • LadyGnome
    LadyGnome Posts: 801
    First Anniversary Name Dropper First Post Combo Breaker
    Forumite
    Good luck. 
    OP the mortgage can be addictive but make sure you have the basics like an emergency fund in place and pension contributions. 
    Your mortgage rate is quite high, will you be able to switch on to a better deal at some point?
    MortgageStart Nov 2012 £310,000
    Oct 2022 £143,277.74
    Reduction £166,722.26
    OriginalEnd Sept 2034 / Current official end Apr 2032 (but I have a cunning plan...)
    2022 MFW #78 £10200/£12000
    MFiT-6 #28 £21,772 /£75000
  • Welcome and good luck. Although your rate isn't massively high you may be able to get a better rate. You would need to make sure this would still save money taking fees into account but worth a look. 
    Thank you! You’re right isn’t the lowest of interest rates but I can’t switch for the next 4ish years (that’s what our variation document says anyway). By which I’m hoping to be finished paying it off by then. Sadly I just have to work with it. Serves me right for not looking around more. 
    Mortgage Repayment Tracker: 21/03/2021: £85,995.00

    10% MOP 2021: £1098.57/£8599.50

    1% MF Challenge 2021: £65.01/£849.50

     My MFW thread: https://forums.moneysavingexpert.com/discussion/6167354/financial-freedom-through-mortgage-freedom#latest

    He who dares wins! ~ Winston Churchill 


     

  • LadyGnome said:
    Good luck. 
    OP the mortgage can be addictive but make sure you have the basics like an emergency fund in place and pension contributions. 
    Your mortgage rate is quite high, will you be able to switch on to a better deal at some point?
    Thank you LadyGnome. I’m not sure we can switch at this point, not for another 4 or so years anyway. But I will look into it. 

    Also, that’s another thing an emergency fund!!! I need to get one together. You know, the thing is, when I want something I get so tunnel visioned. And that’s how I’m feeling about the mortgage. I’m not seeing anything else other than mortgage freedom. However, this isn’t the way to go because I need to live through this journey and not scrimp through it. I’ll be putting a bit of money aside from next week for it. 

    Do you think 6 months of expenses is fine for an emergency fund as a general rule? 
    Mortgage Repayment Tracker: 21/03/2021: £85,995.00

    10% MOP 2021: £1098.57/£8599.50

    1% MF Challenge 2021: £65.01/£849.50

     My MFW thread: https://forums.moneysavingexpert.com/discussion/6167354/financial-freedom-through-mortgage-freedom#latest

    He who dares wins! ~ Winston Churchill 


     

  • LadyGnome said:
    If your interest is calculated daily and you can make small OP then don’t leave the money sitting in your bank account building up unless you are keeping it as part of your EF until you are sure you don’t need it or you are getting a better interest rate than you are paying on your mortgage (unlikely right now). 
    This makes a lot of sense but I thought it would be a better idea to pay it off as a lump sum because then it would knock a huge chunk off the interest in one go? Is my think faulty? Does it make better sense to pay it off in bit of say £1000? What are your thoughts? 
    Mortgage Repayment Tracker: 21/03/2021: £85,995.00

    10% MOP 2021: £1098.57/£8599.50

    1% MF Challenge 2021: £65.01/£849.50

     My MFW thread: https://forums.moneysavingexpert.com/discussion/6167354/financial-freedom-through-mortgage-freedom#latest

    He who dares wins! ~ Winston Churchill 


     

  • South_coast
    South_coast Posts: 4,789
    First Anniversary First Post Name Dropper Photogenic
    Forumite
    Check your paperwork/speak to your provider regarding large OP's. Most will see this as a partial redemption and recalculate your payments as a result. This will mean you can make larger OP's (as the proportion of the contractual payment will fall, assuming you want to allocate the same amount of money to it each month), but it will mean you use up your OP allowance faster and more will be subject to ERC's. For me (NatWest) a £1000 payment will mean a recalculation therefore I avoid it, but £999.99 = absolutely fine 😀
    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!!!
  • Check your paperwork/speak to your provider regarding large OP's. Most will see this as a partial redemption and recalculate your payments as a result. This will mean you can make larger OP's (as the proportion of the contractual payment will fall, assuming you want to allocate the same amount of money to it each month), but it will mean you use up your OP allowance faster and more will be subject to ERC's. For me (NatWest) a £1000 payment will mean a recalculation therefore I avoid it, but £999.99 = absolutely fine 😀
    South_coast you are a Godsend! I'm with Natwest too. I just came off the phone to them right now and they confirmed what you said. As such, I have changed my strategy. I'm going to me making over payment of £999.99 or less. This also means that I can make more monthly  over payments as well. So it works out for the better! 
    Mortgage Repayment Tracker: 21/03/2021: £85,995.00

    10% MOP 2021: £1098.57/£8599.50

    1% MF Challenge 2021: £65.01/£849.50

     My MFW thread: https://forums.moneysavingexpert.com/discussion/6167354/financial-freedom-through-mortgage-freedom#latest

    He who dares wins! ~ Winston Churchill 


     

Meet your Ambassadors

Categories

  • All Categories
  • 341.5K Banking & Borrowing
  • 249.6K Reduce Debt & Boost Income
  • 449K Spending & Discounts
  • 233.8K Work, Benefits & Business
  • 605.6K Mortgages, Homes & Bills
  • 172.4K Life & Family
  • 246.5K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.8K Discuss & Feedback
  • 15.1K Coronavirus Support Boards