Mortgage Free: The final countdown

savingholmes

Great news on the extra commission.

mark55man

Reporting back for the END of December 2022 

• My 06/04/22 OP Mortgage Neutral Pot was £41.1 k, and I have added an additional £28.7K OPs (Pension Savings) this tax year

With the result that 

• My MN Saving pot is £69.8K and my Repayment Mortgage Balance was £69.8K
• I am now Mortgage Neutral

My focus now will be continuing to save so that I have enough cash outside the pension to match the last year 2026 which is not fixed and who knows what the SVR will be by then.  That amount is just under £18K, I will treat this as a countdown target from 1/1/23 and not counting any existing savings - ie new regular savings etc

savingholmes

Congratulations Mark you've done amazingly well - especially as you are so generous to your family too. 

Have a lovely holiday.

mark55man

Thank you SH. 

It may seem a bit odd to have reached being MN and still worried about saving for more.  But doing so would increase the cash element (cautiousness) of my savings and allow me to be a bit more long term (and counter inflationary) with the "overflow" money.  Allocated against the mortgage, cash is not reduced by inflation as my mortgage inflation is 0% - even better that that in fact given the extra cash interest on top through interest rate differential (savings to mortgage).

So my new target is £12K cash savings (my new OP's) this year and £6K next year.  I won't start a new diary I will just pivot this one, but will report in Julicorns diaries as well - I see 2023 has already started.  Also need to consider that 2024 will be a half year in salary terms.

mark55man

Getting ready for 2023.  Will report at the end of each month

At the start of 2023 my savings (OP) balance is £0 and target is £18K in under 2 years. My net extra interest (Savings - mortgage) is £0 - my net interest target is £250/year

As my fix is at 2.1% and savings in excess of that are easily achievable especially with a 1 or 2 year fix then I will not be actually using these for OPing until the end of my fix rate  

mark55man

Just reread the diary to confirm my decision to extend it rather than close it and start a new one.  (Not a right riveting read if I'm honest, but thank you again for all those rooting for me and helping on the sidelines - especially @savingholmes)

I think actually OP'ing the mortgage is the whole point of this board and therefore I will carry on.  Also getting a physical cash balance to make the final OP when the early redemption charge and fixed rate have finished feels like a more "real" target and is actually quite motivating
 

savingholmes

Hi Mark - you just have to find whatever motivates you the most. I think maximising savings while you still have a bigger income makes complete sense. I know you've done work on  your house - but there are likely to be further home improvements, cars, help for kids etc in your future so savings all help with that.

mark55man

Jan 23 report - Month 1 of my new challenge - namely building savings to be deployable against the mortgage to help secure retirement schedule.  Alongside other things I need £18000 by start 2025 to do this, and I have set a target of £10800 - 12x£900 for 2023

Cash saved in regular savers in 2023 - Jan - £650 5%
Cash saved in other savings in 2023 -  Jan - £250 3%

Total £900/£10800. 

Also have been doing some background readjustments to  my mortgage neutral pot and its now as safe as I can make it (no need for inflation protection, but still need to cover the interest costs).  Outside MN have moved the other money into higher risk funds (barbell style) to keep the longer term returns higher (hopefully) - so that's all in place now just need to focus on the cash!!

savingholmes

Best of luck with new investments

mark55man

Changed the goalposts again.  Hope you are not giddy!!

I now want to be able by the end of 2023 to (should I choose to do so) pay off the mortgage out of savings, repayments and using the tax free element of the pension pot I built up last year.  This gives me a better baseline for deciding in 2024 what extra I need to do to be comfortable in my retirement plans

This change feels more aggressive, and more in keeping with this board.  My target is, should I choose to pull the trigger on it to be able to cash my chips and pay off the mortgage only using the elements above.  My Dec 23 mortgage will be 52K owing.  My current balances are:
* Cash or Cash Equivalents (access within days) - £11K
* Tax Free Lump sum - £18K   

So £52K target - £29K already potted - Leaving (£23K to go).  I hope to achieve this by
* Increase in cash savings £11K - £24K - so £13K extra
* Increase in Tax Free Lump Sum  £18K to £28K- so £10K extra

Will report back monthly as before