This is it! 2027 is the goal...

South_coast

If you are charged daily interest then you get the biggest bang for your buck by making the OP's as soon as possible, as this brings down the balance (and therefore the interest) sooner 

Mrs_Binxtoria

So we have been investigating and exploring other options for working to towards reaching our goal of paying the mortgage off by 2027.  Thanks to an inheritance which has increased slightly since my opening post, we will be able to overpay our mortgage for the next year by £5000 (minimum), however rather than paying all of this to the mortgage we will pay half towards the mortgage as a lump sum and then the other half will be drip fed into investments over the course of the year.  Hopefully we will be able to do this for the next 2 years when our ERC reduces to 3% instead of 6% and we might explore remortgaging to a lower rate and reducing the term at that time.  But if the figures don't stack up we will continue with our plans until the fix is up in 2025.

We are so grateful to be in the position to now have a year's worth of expenses in savings, a lump sum in investments and be able to make significant overpayments to our mortgage.  Something that I would never have imagined this time last year, I was still building up our £5000 emergency fund.

Certainly I feel as if we are one step closer to reaching our goal.

waterplate

Mrs_Binxtoria said:

So we have been investigating and exploring other options for working to towards reaching our goal of paying the mortgage off by 2027.  Thanks to an inheritance which has increased slightly since my opening post, we will be able to overpay our mortgage for the next year by £5000 (minimum), however rather than paying all of this to the mortgage we will pay half towards the mortgage as a lump sum and then the other half will be drip fed into investments over the course of the year.  Hopefully we will be able to do this for the next 2 years when our ERC reduces to 3% instead of 6% and we might explore remortgaging to a lower rate and reducing the term at that time.  But if the figures don't stack up we will continue with our plans until the fix is up in 2025.

We are so grateful to be in the position to now have a year's worth of expenses in savings, a lump sum in investments and be able to make significant overpayments to our mortgage.  Something that I would never have imagined this time last year, I was still building up our £5000 emergency fund.

Certainly I feel as if we are one step closer to reaching our goal.

Congratulations, it sounds like you've thought things through really carefully and done the right thing, bearing mind the times we are in.  I also work in a stressful job and while I do really enjoy it, I love the idea that when I am mortgage free (aiming for 2030 but earlier if I get payrises in that period, and if we can remortgage to a lower rate after our five year fix finishes in 2023) I will be able to make my own decision about whether I want to sustain that level of hard work or switch to part time, or change to a different role.   Best of luck for 2021!

powerspowers

Well done mrs B! Have you worked out how much you need to overpay or save each year to get it gone by 2027? I think having that figure will help keep you on track. It’s great you’ve got £ in various places but I can see how that could distract you into drifting from your goal 

Mrs_Binxtoria

waterplate said

Congratulations, it sounds like you've thought things through really carefully and done the right thing, bearing mind the times we are in.  I also work in a stressful job and while I do really enjoy it, I love the idea that when I am mortgage free (aiming for 2030 but earlier if I get payrises in that period, and if we can remortgage to a lower rate after our five year fix finishes in 2023) I will be able to make my own decision about whether I want to sustain that level of hard work or switch to part time, or change to a different role.   Best of luck for 2021!

Thanks Waterplate, these are my sentiments exactly.  To have the option to work full time, part time with less responsibility etc. the choice will be mine not just to pay the mortgage.  I am the main bread winner in my family, when my twins were 7 months old (they are now 12) a job opportunity came up that I couldn't really turn down, so my DH and I changed job roles, he worked 2 days a week and stayed at home to raise the twins and I went back to work full time.  In those 12 years I have had two promotions and now earn a decent salary, have a decent pension which I am maxing out and also investing my pay rises into etc.  Sometimes I do regret the decision to work full-time when my babies were small but we would not have had the lifestyle that we currently have, we would have been just scraping by as DH can only ever a minimum wage job.  Now I know that we will be able to be in the position to help them with Uni, first car or help with a deposit for a house.  If we finish our mortgage earlier then we will be able to help more.

Our ultimate aim is to travel, not the backpacking type but to visit different places throughout the year without children (much cheaper and not tied to school holidays!) and just enjoy life before we get too old 

Mrs_Binxtoria

powerspowers said:

Well done mrs B! Have you worked out how much you need to overpay or save each year to get it gone by 2027? I think having that figure will help keep you on track. It’s great you’ve got £ in various places but I can see how that could distract you into drifting from your goal 

Hi Powerspowers, after much deliberation and calculations we need to save a figure of £415 per month to reach our goal of paying the mortgage off by 2027.  This figure should bring us down to around £20,000 outstanding which we will be able to pay off with savings that we currently have, the aim is build this up more as time progresses so might be able to pay off sooner.

Obviously these calculations are based on the fix that we are currently in and things might change when we have a new mortgage deal, but it all helps to reach our goal.

caeler

Good luck @Mrs_Binxtoria
I've been doing a similar thing, overpaying within the terms of my mortgage and saving like crazy so I become mortgage neutral. Then depending on what ERC looks like I can repay (which I’ll do when mine ticks down a level in June). 

Mrs_Binxtoria

So yesterday my DH withdrew his premium bonds so that we could pay £2500 as a lump sum to the mortgage, however we ticked the box to cash them in after the next draw, so now we have to wait until February until we can make the payment.  I was so looking forward to paying it in as it would have brought our mortgage down to under £100,00, but never mind.  In the meantime DH has opened an easy access saver (can't believe the First Direct saver has dropped to 1%) so the first payment has gone into that.

I have also managed to increase my investments savings to £210 so as long as we keep on this path we will hit our target for this year.

caeler said:

Good luck @Mrs_Binxtoria
I've been doing a similar thing, overpaying within the terms of my mortgage and saving like crazy so I become mortgage neutral. Then depending on what ERC looks like I can repay (which I’ll do when mine ticks down a level in June). 

Thank you Caeler, I have just worked out that we need another £60,000ish to be mortgage neutral so it is good to keep both goals in mind when doing this.  Not just seeing the mortgage total going down but savings also going up to reach mortgage neutrality.  I feel the need for another tracker coming on .....

Mrs_Binxtoria

So I made an overpayment of £90 towards the mortgage today, this was money left over from allocating to various savings pots etc.  The only thing with my bank is that they keep sending me a letter every time I make a payment, I have tried clicking all sorts to ask for paperless.  I would overpay more often but save it up until it is a decent amount as I feel guilty with the environmental impact of them sending me a letter all the time.

In other news I have cut our grocery budget by £100 per month and have switched to doing our grocery shopping every 10 days instead of every week, we started doing this before Christmas but with buying extra bits for Christmas didn't really notice any change.  This grocery trip we managed to spend £70 for a family of 4 for 10 days.  Admittedly I have a few bits in the freezer to help with this but I am hoping to spend £100 max each grocery trip.  This will then give us an extra £1200 in the overpayment pot for this year.

I have also completed a few Prolific surveys, I fell out of love with it for a little while but on average I earn around £20 per month so need to gt back into the swing of it.

After reading the MSE newsletter this week I have just applied for the working from home allowance, although small this will also help a bit.  Every small bit adds up.

I have a day off from work today so I am going to batch cook a big pot of soup today to tide us over for a few days.  The kids are getting bored with sandwiches and looking out the window it is definitely soup weather!

caeler

Great job on the grocery budget! That’s my biggest expense so I’m trying hard to be frugal this month. @Mrs_Binxtoria PS. I love a good tracker!