Quest for (mortgage) freedom

eat_that_frog

Hope everyone's having a good March.

We've been very fortunate this month as it's bonus month for me and my other half. So as a result we were able to put away a decent amount of money (around £9.5k) into savings. So we're now at a total of £11.5k savings towards of a proposed target of £30k in savings in 2023. I still don't think I'll get to £30k by the end of year, but the closer we can get to it, the better, and the bonuses really help on that journey.

Otherwise, there's nothing really to report. Our mortgage 5 year fix runs out end of 2023, so I'm starting to look at offers on the market so that I'm ready to lock in a deal. We're on a rate of 2% or thereabouts at the moment, it's looking like our rate will be around 4-5.5%, depending on how long we fix for, whether base rates go up in the meantime etc. Doing the calculations, overpaying has most definitely helped lessen the pain because our LTV is much better now, but the interest rate doubling or nearly tripling still has a big impact in spite of our overpayment efforts over the last nearly 3 years. There will be a lot in the same boat this year having ro refix, for sure.

savingholmes

Great news on the bonuses and well done for saving them

South_coast

It's a shame about the rate going up, but at least you've made hay while you've had the low rate and got the best bang for your buck with the overpayments. The extra interest would have been a lot more painful to swallow if your balance was still back where it was meant to have been by now. You've done so so well. 

Excellent work on the savings balance, too. You're a quarter of the way through the year and more than a third of the way to your target 👍 Plus, interest will be working in your favour this way round and helping to nudge up that balance

eat_that_frog

Thanks guys! 

April has whizzed by in a flash! I put £4k into savings, so I've now saved just over £15k this year so far, meaning I'm 50% towards my target of £30k. I still don't think I'll quite be able to sustain this level of savings through the year but the more I can save before mortgage refixing at the end of the year, the better.

My outstanding mortgage balance keeps ticking down, I'm in the £153k bracket now so it should be around £150k by the end of the year. And then I can deduct from that whatever's in my savings account at the time to get my remortgage balance as low as I can. I'll need to make sure I Ieave us enough for an emergency fund though.

KajiKita

Just read your thread. Really enjoyed seeing your progress and how aligned you and your OH are (I’m the main driver of OPs here). Sending positive vibes for the remortgaging you will be doing this year and I will be watching what you decide to do. We will be in the same position in summer 2024 with a much higher outstanding balance and Mr KK being self employed which complicates things somewhat …. 

Also, you have inspired me to declutter a bag of ‘stuff’ that has been ‘looking at me’ in my living room for months this afternoon - thank you 😊

KK

eat_that_frog

Not posted here for a while. Hope everyone's having a good summer so far and managing to keep cool...

In May we put £4000 into our savings fund. This takes the grand total saved to date this year so far to £19,450, towards a total target for the year of £30,000. I'm happy with the progress we're making on building our savings, working towards the goal of remortgaging at the end of the year.

On the topic of remortgaging...

The base rate increases and all the news stories about mortgages this past fortnight or so are really hard to get my head around. I've looked at the calculators online, done the sums, but I feel sort of frozen, like I can't decide what to do. Our rate (1.9%) runs out end of December so there is time (although admittedly rates will most likely rise further in that time...). I'm usually really proactive with financial/money related things, but I am really struggling to know what the best thing to do is, whether to fix or go for a tracker or whatever. I've looked at Martin Lewis's advice and others, and I'm still sort of frozen. It's very unlike me.

KajiKita

Hi @eat_that_frog 😊

We’re having similar discussions here, although our deal doesn’t run out until October next year. It might be worth chewing over with an independent mortgage advisor? Ours doesn’t charge us, can look at all deals across the market and helps us look at things from different angles.

KK

eat_that_frog

Thanks @KajiKita for your good advice, we spoke to an advisor yesterday which has cleared things up a bit in our heads. I think the thing I was/am struggling to get my head round is: this is it now. There is no 'let's wait and see if rates come down before end of Dec', they won't. I unpicked this a bit with the advisor. We bought our first starter home in 2012 with a 2.95% interest rate (we paid off that mortgage in 2017) and then we moved up the ladder to this house in 2019 with a c.2% interest rate, so I've never had a mortgage with a rate above 3% - and I know how lucky we have been that this is the case. That I think is what I'm struggling to get my head around, cheap debt is all I've known.

In the meantime, I'm continuing to try and get as much into savings as I possibly can before the end of the year. Yesterday I put another £4000 into our savings fund. I'm happy with the progress we're making on building our savings - I still don't think we'll be able to maintain this progress because August and September are always expensive months for us (all our annual insurances come out etc), but we're still making good progress working towards the goal of remortgaging at the end of the year.
 

KajiKita

Glad my suggestion helped 😊
Yes, I don’t think we will see interest rates as low as they have been for a very long time, if ever. For some reason my gut keeps telling me 6 to 7% interest rates will be where it settles, but that is going to be pretty painful for a lot of people and tight for us. 

Just have to KBOing! 😉

KK

eat_that_frog

Well as of last week I have been a member of this forum for 3 years! And it's been 3 years since I started my MFW journey. In that time I've paid off just shy of £100k, or 40%, of the mortgage and got the total down from £250k to around £150k.

That decision to focus on becoming mortgage free, and live frugally and gain promotions at work to achieve this, has without a doubt been a game changer for us as a family. It means the interest rate hike (which hits us at the end of the year when our fix comes up for renewal) will be manageable - it's not pleasant, but not frightening either. That's ultimately the whole reason driving my original decision 3 years ago to work towards mortgage freedom; I want the peace of mind it gives. That's it.

So I'll keep on keeping on, and hopefully this time next year on my 4th anniversary I'll have paid off another chunk of the mortgage and will be another step closer to mortgage freedom.