Mortgage Free: The final countdown

savingholmes

That's a fab amount to be able to put into pension. Well done! I agree while any losses are outweighed by tax benefits it feels less painful than it would.

mark55man

True - got to be prepared for the swings and roundabouts with or without the tax relief (but a 20% safety margin is a comfort) - Putting more of my income aside for getting to MN quicker both makes me feels better, keeps up the readiness for retirement by not elevating standard of living (ie overspending) now I have a little more to spare, and obviously helps my overall retirement position.  I've had a good year as well, so have been getting a few magic money bonuses from the taxman, work and family so hasn't been a real stretch.

I'm beginning to think about whether to make an actual OP to my lender at the end of the year as MN is one thing but MF is a another, and I am limited by both 10% OP limit and on a 7 year fix with early repayment charges until year 7.  So it would be nice to start bringing the MF day forward alongside being MN

savingholmes

I think you're wise not to get used to having the extra money and frittering it. I'm trying to do the same. I'm with you on MN versus MF. I'm debating whether to OP another £20 a month - as that would knock 6 months off the mortgage over the term - so even though I would get a £5 uplift from the taxman if I put it into pension - it's still tempting to OP (as well) because it provides certainty. OPing would mean that instead of being 73.5 when I was MF - I'd be 72.5  (already OPing £20). 

One thing I read suggested keeping a third of increases and saving the rest so you didn't feel too deprived. It's a constant balancing act between we are not promised tomorrow and therefore having enough to enjoy life today and providing for future self. 

mark55man

Very late for this month - been a bit meh!! - Reporting back as of start of August 2022 

• My 06/04/22 OP Mortgage Neutral Pot was £41.1 k, and I have added an additional £13.8K OPs (Pension Savings) this tax year

With the result that 

• My MN Saving pot is £54.9K and my Repayment Mortgage Balance was £76.8K
• I am now £21.9K away from being Mortgage Neutral

The investment element of my pot has recovered somewhat from the last 2 months although August has been flat as it often is..

My estimated Mortgage Neutrality date is still Feb 23, but wouldn't take much to bring into Jan 23 - but steady as she goes and I'll make those decisions in December.

jennystarpepper

Keeping things crossed for you... hope December comes quickly for you, not wishing the days away if you know what I mean.

Fantastic news and lot's of hard work, well done you.

savingholmes

Well done on the progress towards MN. Glad your funds have largely recovered.

mark55man

Yes thanks Jenny & SH.  Its just counting down the clock now, and not changing anything.

Next year will be about topping up my pension for retirement (not mortgage) purposes.  Its a bit behind schedule but nothing outrageous - so next years thread will be about that, but maybe on my main diary.

mark55man

Reporting back as of start of September 2022 

• My 06/04/22 OP Mortgage Neutral Pot was £41.1 k, and I have added an additional £15.0K OPs (Pension Savings) this tax year

With the result that 

• My MN Saving pot is £56.1K and my Repayment Mortgage Balance was £75.5K
• I am now £19.3K away from being Mortgage Neutral

Getting closer - won't be £0 by December payments but only a few thousands remaining by then - and my 3rs Jan 23 payment will be very close to reaching the target (on the nod in racing terms). 

I've decided I will make not make a cash OP off my actual mortgage, although I will rethink in Dec.  Basically, I have 1 year at the end of the mortgage (2025/2026) that is not fixed rate, and at that point there will be no early repayment charge so for now I will keep the cash in regular savings as I can exceed my 2.1% mortgage rate for the forseeable.   

 

savingholmes

That sounds good planning to me. I'm getting much better rates on my regular savers than I would from direct paying off the mortgage.

mark55man

Reporting back as of start of October 2022 

• My 06/04/22 OP Mortgage Neutral Pot was £41.1 k, and I have added an additional £15.4K OPs (Pension Savings) this tax year

With the result that 

• My MN Saving pot is £56.5K and my Repayment Mortgage Balance was £74.0K
• I am now £17.6K away from being Mortgage Neutral

Been a little rough in the markets with all the government meddling, but my pot is cautiously invested so still inching up in absolute terms although this months OP was largely chewed up making restitution for the financial market turmoil.