Aiming for Mortgage Free!

rugbymadfamily
rugbymadfamily Posts: 505 Forumite
First Anniversary First Post Name Dropper
edited 26 November 2020 at 1:41PM in Mortgage-free wannabe
Hi All,
I've been a lurker here for a few months, but having read some of your diaries (losing many hours!) I've decided to bite the bullet and post my own.

Situation
Family consists of my Husband and I and a couple of gorgeous kitties. We bought our first place in July 2018, in London so prices are high and the mortgage is fairly large as we could only scrape a 10% deposit together (paid £385k and initial mortgage was £351k. Monthly repayments are a whopping £1,560 which is c.£900 capital and £660 interest each month on a 25 year term). We also have a loan on our car (£13,500) which is recent as the old one died, we bought a 2 year old car and the aim is that it will last us 10 years as we (hopefully) grow our family.  I have never had any debt before (credit cards are paid in full each month) so I am not a huge fan of the car loan, but overall it seemed a wiser decision than buying yet another £1k car which gives out after a year or 2. Finally paid off my student loan last year (10 years since I graduated but it is gone!).

Income and Expenditure
We are lucky in that I earn very well and OH earns well, however, in London that doesn't go far! We definitely overspend on entertaining and going out (many of our friends don't have mortgages and see no chance of getting one, so seem to have much more disposable income and we definitely get drawn into spending more than I would like). Throughout lockdown our food spend went through the roof as we were both WFH and cooked far more elaborate meals than we normally would. However, I want to get this and other spending fully under control and start making mortgage overpayments. Need to get my slow cooker out and get my backside batch cooking again - there's no excuse given I am still WFH! We are thrifty in other ways, frequently buy furniture from the BHF, food shop is normally Lidl (although Morrisions recently - slightly more expensive but quality is much better), always take picnics on days out etc.

Plan
House is definitely big enough if we have 1 child, but will likely need to move for access to better secondary schools. Would like to therefore have made a large dent in OPs in order to have a bigger deposit if we need to move or in order to pay off the mortgage much earlier, to aid early retirement. I know not having an exact goal makes saving harder, but those are the two goals depending on whether we are lucky enough to be able to have children or not (already in mid 30s so I know its not always easy).
Mortgage Free Date currently: July 2043 (when we will be in our late 50s).

Finances
Current mortgage balance: £328,591 (including first ever OP made: £200 Sept 2020!).
Savings: £2,843 (took a big with paying for wedding earlier this year and some kitten vet bills). Currently saving £1,300 per month and aiming to get £7k to stash as emergency fund (being 3 months expenses which is sufficient as both in stable jobs - but will aim to increase this) separate from all other savings.
Once hit £7k (should be Jan 2021) aim is to increase the mortgage overpayments to £650 per month and reduce savings each month from £1,300 to £850. These savings are to cover holidays and maternity leave primarily. We are fortunate enough to (mostly) be able to pay things like car and vets bills as they are incurred. However, we would also like to continue decorating the house, most rooms just need painting (which we do ourselves!), but living room needs a new fire, carpet and blinds, plus we want to renovate the kitchen entirely.....

Right, time to end the ramblings, thanks for reading (and for posting - I've so enjoyed reading others diaries). I want to read and post here to keep my motivation up and make these overpayments. Our dream is to semi-retire late 50s / early 60s, buy a campervan and spend months at a time travelling Europe....that can only happen with an early paid off mortgage! Also, reading to make good use of tips on saving money so any advice, please do post!! Not sure what to do going forward, whether to do a weekly or monthly update, but will have a think :-)




Current mortgage (1 Jun 2022): £289,501 - originally £351,999 got to love London sized mortgages!
OP Goal 2022 = 3.75% in OPs: £6,975 / £13,200
Emergency Fund Target: 3 months saved ✅
 
«13456735

Comments

  • KP74
    KP74 Posts: 45 Forumite
    Name Dropper First Post Photogenic First Anniversary
    Good luck @rugbymadfamily:)
  • FtbDreaming
    FtbDreaming Posts: 1,121 Forumite
    First Anniversary First Post Name Dropper
    good luck with your new journey! We went to a campsite in Grace last uear and met a couple who were living the dream. They had a massive RV that cost about £500,000 with a mini and a moped on the back of it and were travelling around Europe for the summer! It was amazing. We would also love to do the same but obviously on about 3% of their budget lol
    Mortgage started August 2020 £69,700
    Mortgage ends Aug 2050 MFW: Aug 2027 
    Current Balance: £60,200 (59.9% LTV)
    MFW2020 #156 £723.13
    MFW2021 #26 £1184.71
    MFW2022 #11 £197.87
    MFW2023 £785
    MFW 2024 £528.15

    Determined to make it! 
  • Wow, that is some RV! Our aim is definitely something more budget friendly than that lol.

    I see your journey has started recently as well - any tips or ideas most welcome!
    Current mortgage (1 Jun 2022): £289,501 - originally £351,999 got to love London sized mortgages!
    OP Goal 2022 = 3.75% in OPs: £6,975 / £13,200
    Emergency Fund Target: 3 months saved ✅
     
  • QueenJess
    QueenJess Posts: 3,680 Forumite
    First Anniversary First Post Name Dropper
    Chipping in to say good luck in your plans.  Will follow with interest as we have a few similarities.

    I bought a forever house in the expensive South-East about 6 years ago (and we really did stretch ourselves) and I have been trying to overpay since then!  I hadn't had any debt before and it felt terrifying.  Anyway, I understand the high mortgage amount...

    Similarly, we didn't have a child until our 30's (or at least I was in my 30's!) and both of us would love to be able to retire early and enjoy ourselves.
    2024 decluttering: 6,924 ⭐️🥉⭐️🏅🏅🥈⭐️🏅🥇🏅⭐️🏅
    April mini kitchen declutter challenge: 30/50
    2024 decluttering goals: 🥉3,000 🥈4,000 🥇5,000 💎12,000 🏆 20,000
  • Afternoon All,

    Got the online banking details for our mortgage through today so can easily track OPs online which will hopefully help with the goal. I love watching the numbers go up on my savings so hoping to also enjoy the numbers going down on the mortgage!

    Have taken inspiration from other diaries (thanks guys!) and kick started some batch cooking (have a six portion spag bol in the slow cooker - basic but its a start!) and have prep'd some oaty protein balls (we use the gym a lot and eat far too many expensive, sugar filled snack bars for when peckish so this will be much better). Food wise, we always have a menu planned for the week and use that to food shop. But the menu has become far more elaborate throughout lockdown causing food bills of over £500 some months, which is ridiculous for 2 adults. Pre-lockdown this was around £250 per month (including most toiletries / cleaning materials etc) so aiming to get back on track by scaling back the home cooked meals to more normal dinners and not extravagant dishes every night!

    Wash load done and hanging on the line, bit overcast here but no reason it shouldn't dry and saves the tumble drier.

    We now have a joint account for everything and get £200 fun money each from this (do what you like with it, no justifications needed). I track all this on a spreadsheet but think will try to get a SOA together to see if there are any easy wins on there.
    Current mortgage (1 Jun 2022): £289,501 - originally £351,999 got to love London sized mortgages!
    OP Goal 2022 = 3.75% in OPs: £6,975 / £13,200
    Emergency Fund Target: 3 months saved ✅
     
  • Welcome to the MWB board and congrats on your shiny new diary!!! Look forward to reading your updates as they come :) My goal is also to travel Europe in a campervan as I have yet to experience any form of travelling myself (minus the occasional all inclusive beach holiday). Well done on your first £200 OP!
    Debt Free Date: 24th October 2023! £7402.10 Paid Off In 6 Months!
    3 Month Emergency Fund: £3500 / £3500
    #60 2024 Mortgage-Free Wannabes: £200/£2500
  • SOA done...can definitely see the main offender in terms of overspend! The remaining balance of £1,285 is roughly what gets saved every month currently while building emergency fund.

    Household Information[/b]
    Number of adults in household........... 2
    Number of children in household......... 0
    Number of cars owned.................... 1[b]

    Monthly Income Details[/b]
    Monthly income after tax................ 3979
    Partners monthly income after tax....... 1745
    Benefits................................ 0
    Other income............................ 0[b]
    Total monthly income.................... 5724[/b][b]

    Monthly Expense Details[/b]
    Mortgage................................ 1568
    Secured/HP loan repayments.............. 244
    Rent.................................... 0
    Management charge (leasehold property).. 0
    Council tax............................. 176
    Electricity............................. 54
    Gas..................................... 0
    Oil..................................... 0
    Water rates............................. 11
    Telephone (land line)................... 0
    Mobile phone............................ 67
    TV Licence.............................. 13
    Satellite/Cable TV...................... 79
    Internet Services....................... 0
    Groceries etc. ......................... 350
    Clothing................................ 50
    Petrol/diesel........................... 100
    Road tax................................ 10
    Car Insurance........................... 34
    Car maintenance (including MOT)......... 0
    Car parking............................. 10
    Other travel............................ 50
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 0
    Pet insurance/vet bills................. 98
    Buildings insurance..................... 23
    Contents insurance...................... 0
    Life assurance ......................... 0
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 150
    Haircuts................................ 20
    Entertainment........................... 600
    Holiday................................. 200
    Emergency fund.......................... 0
    Other commitments....................... 46
    Gym..................................... 56
    Wine Club .............................. 30
    Fun money (£200 each)................... 400[b]
    Total monthly expenses.................. 4439[/b]
    [b]

    Assets[/b]
    Cash.................................... 2843
    House value (Gross)..................... 390000
    Shares and bonds........................ 0
    Car(s).................................. 13500
    Other assets............................ 0[b]
    Total Assets............................ 406343[/b]
    [b]

    Secured & HP Debts[/b]
    Description....................Debt......Monthly...APR
    Mortgage...................... 328000...(1568).....2.4
    Secured Debt.................. 13500....(244)......3.5[b]
    Total secured & HP debts...... 341500....-.........-   [/b]

    [b]Unsecured Debts[/b]
    Description....................Debt......Monthly...APR[b]
    Total unsecured debts..........0.........0.........-  [/b]

    [b]
    Monthly Budget Summary[/b]
    Total monthly income.................... 5,724
    Expenses (including HP & secured debts). 4,439
    Available for debt repayments........... 1,285
    Monthly UNsecured debt repayments....... 0[b]
    Amount left after debt repayments....... 1,285[/b]

    [b]Personal Balance Sheet Summary[/b]
    Total assets (things you own)........... 406,343
    Total HP & Secured debt................. -341,500
    Total Unsecured debt.................... -0[b]
    Net Assets.............................. 64,843[/b]
    Current mortgage (1 Jun 2022): £289,501 - originally £351,999 got to love London sized mortgages!
    OP Goal 2022 = 3.75% in OPs: £6,975 / £13,200
    Emergency Fund Target: 3 months saved ✅
     
  • Wow that’s a big mortgage but also a big income so you should be able to smash it in theory! I see the entertainment budget and then the spending money on top is quite generous! I guess you want to live still so maybe try gradually cutting that budget? 

    You’re very good doing the batch cooking. I just don’t have the patience and the 3 kids eat 24/7 anyway so it would still all be gone the day after I cooked. I used the TooGoodToGo app for the first time tonight. Got a chinese meal and yo sushi for £3.50 each. The kids were really happy with it. If you’re in London there’s probably even more choice than here. 

    Good luck on your journey! 
    Mortgage started August 2020 £69,700
    Mortgage ends Aug 2050 MFW: Aug 2027 
    Current Balance: £60,200 (59.9% LTV)
    MFW2020 #156 £723.13
    MFW2021 #26 £1184.71
    MFW2022 #11 £197.87
    MFW2023 £785
    MFW 2024 £528.15

    Determined to make it! 
  • Wow that’s a big mortgage but also a big income so you should be able to smash it in theory! I see the entertainment budget and then the spending money on top is quite generous! I guess you want to live still so maybe try gradually cutting that budget? 

    You’re very good doing the batch cooking. I just don’t have the patience and the 3 kids eat 24/7 anyway so it would still all be gone the day after I cooked. I used the TooGoodToGo app for the first time tonight. Got a chinese meal and yo sushi for £3.50 each. The kids were really happy with it. If you’re in London there’s probably even more choice than here. 

    Good luck on your journey! 
    Thanks @F@FtbDreaming
    Yes, is a big mortgage and with that we were able to get a 3 bed terraced house with a garden in a family friendly area. It is mad in London, but I grew up here and the salary I am able to earn means it is affordable, just don't want to be paying it full term. Not necessarily staying here for the LT, may move out of London if we have kids, but who knows...which is another reason to start overpaying! Haven't up until now as we were furnishing the place (lots of fantastic second hand pieces picked up in BHF) and we got married last year (thats not MSE friendly, but we did stick to a very reasonable budget and had a much smaller event than most of our friends).

    Essentially I budget about £150 per week which I labelled as "Entertainment" but that can be anything from coffee and a cake, to buying some bits at Ikea - I really should start budgeting for "type of spend" rather than amount per week. That way I would have a better idea exactly where that money goes. Will look at that for next months budget and try that way instead.

    Oh wow, have seen a few mentions of that app on various diaries but didn't really know how it worked. Have you used it much? I'll get that downloaded and have a look. Haha yes I can imagine with 3 kids in the house, once its ready to eat - it's gone! We are a similar age, your aim of mortgage free by 40 is fantastic, will give you years prior to retirement with no mortgage to pay. We are hoping to be done by around 50 to at least give us a good run into retirement!
    Current mortgage (1 Jun 2022): £289,501 - originally £351,999 got to love London sized mortgages!
    OP Goal 2022 = 3.75% in OPs: £6,975 / £13,200
    Emergency Fund Target: 3 months saved ✅
     
  • QueenJess
    QueenJess Posts: 3,680 Forumite
    First Anniversary First Post Name Dropper
    Don't worry, I had a slightly bigger mortgage than you when we bought 6 years ago  :# (gotta love the South East).  It terrified me and I started overpaying immediately.  Ironically I think it's better to overpay more at the start than the end, but that is the time you have least cash!  I think I started trying to pay £200 - £250 a month.

    We tend to fix every 2 years and are letting the overpayments bring down the monthly payments to something far less scary.  Means we can overpay more or divert funds to other things and gives us more breathing space.  Chipping away at it is a great idea.  Luckily for me, I had money from a will and so I managed to significantly reduce my mortgage quite early on.

    Definitely look into where that other category of money goes.  I always used to think I didn't spend much, but when I started writing out all my transactions (I love spreadsheets...) I realised I was frittering loads of money away.  I don't mind spending on things which bring me enjoyment (day out with the family etc), but I do begrudge the amount of money I was spending on work lunches since they were pretty awful anyway!
    2024 decluttering: 6,924 ⭐️🥉⭐️🏅🏅🥈⭐️🏅🥇🏅⭐️🏅
    April mini kitchen declutter challenge: 30/50
    2024 decluttering goals: 🥉3,000 🥈4,000 🥇5,000 💎12,000 🏆 20,000
Meet your Ambassadors

Categories

  • All Categories
  • 343.1K Banking & Borrowing
  • 250.1K Reduce Debt & Boost Income
  • 449.7K Spending & Discounts
  • 235.2K Work, Benefits & Business
  • 607.9K Mortgages, Homes & Bills
  • 173K Life & Family
  • 247.9K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards