This is it! 2027 is the goal...

Sweetie83

Sounds like you're doing really well!! I've started to move to shopping every 9 days. It does help doesn't it! Did you find it was that alone which helped you save £100 a month?

Mrs_Binxtoria

Well almost a year on from when I first started my diary on our mortgage quest to be mortgage free in 7 years and I am pleased to report that we have made good progress.  10 months ago our mortgage balance was £106,900, today it is £95,700, which I am really pleased with.  However, I feel that we can do better than this so we are looking at remortgaging again...

We have still have a high ERC charge of £5700 but we have found a  5 year fix deal with no product fees at 1.34% (currently on 2.99%) and we would be looking at reducing the term to 11 years instead of the 14 that we still have to run.  Our mortgage repayments would be £783 pm which is £15 more than we are currently paying at the moment.  This would still enable us to save/invest the £400 pm that we currently have.  We have crunched the numbers repeatedly, if we didn't pay the ERC and put that towards our current mortgage instead we would almost be at the same point than if we paid the ERC for the new deal.  Either way we would be paying a bank £5700 whether we continue with our current deal or switch, but this way we would be guaranteeing to reduce the term and be at the same point in terms of figures in 4 years time  (end of current fix) and be able to save/invest the overpayments or overpay the mortgage directly which will have more of an impact then it currently does.  The bliss point comes in year 5 of the fix where we would really see the difference in the mortgage balance, we wouldn't be able to make up the difference unless we drastically overpaid.  If we decide to do this then it will help us reach mortgage neutrality which by my reckoning and projections would be in 4.5 - 5 years.  

As well as using my various spreadsheets the ditch the fix calculator on the website says that it would be worthwhile doing.

It really is a conundrum what to do, use our savings now to lock in and guarantee the next step of our mortgage free quest.  Or leave things as they are and depend on our self discipline to reduce the term to 7 years in 4 years time.  So far we have been self disciplined for the past 2 years but another 4 years is still a long way off.

We have an appointment with a mortgage advisor later this week, in the meantime I will go over the figures again and again...

Of course I may be missing something completely which the more experienced of you might be able to pick up on.

Mrs_Binxtoria

About time that I updated my MFW diary.  In the end we decided to pay the ERC and switch our mortgage so last September our mortgage was fixed for another 5 years at 1.34% and we reduced the term by 3 years down to 11 years (now 10 years left).

It wasn't an easy process and I have been back and forth to the bank quite a number of times as the mortgage got messed up (problems with the mortgage advisor who no longer works for them). The ERC which was £5700 seems to have come off my mortgage as a lump sum payment rather than an ERC.  I queried this a number of times and each time nobody could get to the bottom of it so nearly a year later it is still showing as a lump sum payment, so this is quite a big win and means that our mortgage is now at £82,000.  I am fully prepared that they might realise this so have factored this into my accounts if and when the need arises.

Given the current rise in living costs I am very glad that we took this path, as we would never have been able to meet my projected overpayment figures.

We haven't actually made any overpayments over the past year but I have been investing £100 pm into the S&S ISA and saving up for a new car for when it gives up the ghost (not for a while yet I hope).  We have now filled that pot to £10,00 so can start thinking about overpaying/saving towards being mortgage neutral again. 

Given that my original plan was for 7 years and we are now 2 years in, the plan might need revising slightly!!!  I am still hoping to be able to pay the mortgage off early but first my primary goal will be to get the mortgage down to under £45,000 in 4 years time when our fix ends.  Given the increase in interest rates we need to do this as the only other option would be to extend the mortgage term again and we don't want to do this as we are looking ahead to retirement. I have just opened up an easy access savings account with a savings rate higher than the mortgage rate so overpayments and the emergency fund is being saved in there to maximise the interest.  I intend in the final year of the fix to make regular overpayments to get the balance down, currently I can overpay 3 times the normal mortgage payment (£726 x3) at a time without it counting towards the 10% allowance.  Anything over 3 times the amount is considered a lump sum and changes the mortgage.

I need to start being a bit more frugal again as the past 6 months have been a bit spendy with meals out and more holidays than we normally have.  We have just come back from the Peak District and all money sense seemed to go out the window but my spreadsheet is now balanced and we can start to work on our current goal.

By my calculations we need to save/overpay by £11,000 for the next 4 years so a tangible figure to aim for and one which I can keep updated on here.

Mrs_Binxtoria

Went grocery shopping on Saturday and was really pleased to have only spent £64 for the 4 of us for the week, we did have quite a few stores already in so this was for the fresh stuff.  Recently I have been doing a weekly shop but will go back to a 10 day shop so that we are only shopping 3 times a month rather than than the 4, I found that this helped our budget enormously when we were previously overpaying so will revert back to this.

The weather was so lovely yesterday that I spent most of the day in the garden, the only downside was that I could smell BBQs so we made a quick dash to the shops and spent another £17 on a BBQ which if I am truly honest I didn't even enjoy 

I am still on leave for the week so I have cancelled the dog walker for this week so have moved that £12 to the OP pot.

I did a quick count up of the pot today and it currently stands at £3343.02/£11,000 which is really good.  The bulk of this is from my S&S which aren't doing so well at the moment but is slowly picking back up.

We should have some builders turn up today to replace the roof on our extension, we have gone for the more expensive option of insulation and fibreglass but won't need doing again so an investment.  We were going to get this done just before COVID but didn't have sufficient funds and now the price has doubled, but it needs doing.

I was aiming for a NSD but the twins need new PE kits before the start of term so will off to get those later today.  DS only needs new school trousers unless he has a growth spurt then it will be shoes and trainers as well. DD is fine as I managed to buy a second hand uniform the next size up for her, I am convinced she needs new shoes and trainers but she insists that she is fine.  Knowing her as I do, she will probably tell me just before school starts that her shoes are too small 

Mrs_Binxtoria

Oh dear, no builder turned up today...... on the positive side at least I am still earning interest on the money set aside for this.  We have tried calling him but no response, hope that this isn't an omen and that he won't turn up at all!!!

Got the twins' PE bits earlier, £57 spent but I did make sure DDs was as big as it could go without looking silly so should last her.

Also spent £14 on some lovely pasties for lunch and £5 for some ice lollies for the freezer.

I will definitely be aiming for a NSD tomorrow.  DH is back at work and I have all my paperwork to clear out, I started doing this before we went away and got halfway through it, I just need to finish it off and before I start work next week as it is currently spread all over my work desk 

Mrs_Binxtoria

Still no builder despite calling and texting, DH will swing by his house this evening to see if he is around.

I was aiming for a NSD today but had to pay the water bill, but seeing as this is budgeted for in the bills, it technically counts as a NSD (so far) right?

I have cashed in some Prolific funds today and added it to the OP pot, have also done a few more surveys.

Spent 30 minutes clearing the desk off today and started again on the filing cabinet, I am being pretty ruthless and getting rid of loads of unnecessary paperwork.  My aim is to find some paperwork for one of my work's pensions so that I can logon and access the account.

Two weeks ago I was looking to focus on the pension side of things for a while but since the latest interest rate rise the mortgage is back being my focus again.

LadyWithAPlan

well done on a NSD as yes I think pre budgeted payments/dds are acceptable

Well done on your fix last year, there is something to be said for having to pay more and get it done within a shorter term.

I was going to buy last autumn and didn't - annoying with interest rates but with all the uncertainty at least I have a  very large EF (my house deposit) and I am not stressed. It will be interesting to see what happens to house prices as a first time buyer with the interest rate rises, they probably will just stabilise but London seems to keep on going up... Scary for those on a variable rate of course though or needing to fix this year again.

Mrs_Binxtoria

Thanks LadyWithAPlan, I have been reading your diary and see that you have a large sum saved up to buy a place, I am sure the right one will come up when you are ready.  

I live in Cornwall and the house prices here are crazy, I can't believe how much equity we have in our house at present, sadly properties are scarce and the ones that are available are too far out of our price range.  I like our house but it is not my dream house, I talk about moving often but everyone is settled and the twins are half way through secondary school so don't want to disrupt them.  We are more than likely looking at downsizing  or moving to a different location in the future to free up some equity for our retirement.....the question is where to move to?  I like Cumbria but more recently I have been drawn to Gloucestershire/Worcestershire 

Of course all of this is a bit far off and anything can happen in that time, so am focussing on the the more realistic thing of paying off the mortgage.  

Mrs_Binxtoria

As it turns out the builder forgot about our roof and is on holiday, he apologised and has said that he will come in 2 weeks time. Better late than never I suppose.

Had an NSD today so 2 in a row which is very good.  Tomorrow will have some spends as I am taking DD to Ho&&ycraft to learn how to set up the sewing machine.  I actually got this for Xmas a few years ago and it has been sat in the loft ever since.  She is doing the Duke of Edinburgh and has decided to do sewing as her skill.  Knowing her as I do, tomorrow will be a little spendy to get her started off.

I also have a hospital appointment for a minor procedure so I have taken some mince out of the freezer to make up a batch of chilli first thing so it will only need reheating in the evening.

I was looking at the Gou$to boxes earlier as they have a 65% offer on, has anyone tried them and what did you think?  Is it worth it?

Mrs_Binxtoria

Chilli has all been made for this evening.

Just come back from the sewing workshop for DD and she agreed not to spend too much now until she knows what she wants to make, the only spend was £3.80 on some cotton so she can practice setting up and using some basic stitches. I even convinced her to go the library and get some books rather than buying one, so that is a win.