Mortgage Free: The final countdown

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  • mark55man
    mark55man Posts: 7,922 Forumite
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    edited 6 February 2022 at 2:38PM
    I feel an analogy is in order.  I'm like a racing car at the end of a race, my fuel load (costs) is light which means I can accelerate and move quicker - and as a driver I am focussed and not distracted, but also hoping and praying that a wheel doesn't come off :smiley: -

    my only debate is I may cross the finish line with my MN pot, but I need to win other races (retirement costs) and unlike champion drivers I haven't already stashed away millions of pounds. That said, at the end of my career I am earning as much as I ever will, and family 55man won't really come close in earning power, so am thinking about taking one more year for the team

    bit fanciful but there you go!!
    I think I saw you in an ice cream parlour
    Drinking milk shakes, cold and long
    Smiling and waving and looking so fine
  • savingholmes
    savingholmes Posts: 27,305 Forumite
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    No apology needed. It is a year of unprecedented price increases rather like the 70s. Knowing you could go and choosing to stay will hopefully help keep you going
    Achieve FIRE/Mortgage Neutrality by mid 2030
    1) MFW Nov 21 £201,999 with 237 payments to go - now £184,341 Equity 26.26%
    2) Spend on handyman & external building works & new patio door £11.9K
    3) CC £3.7K on 0% spends card but offset by £34K savings (part EF, part future home improvement)
    4) Mortgage neutral by June 2030 AVC £9.6K/£127.5K AVC target 7.5% value @15/4
    5) FI Age 60 annual income target £13.7/30K 45.7%
  • Really interesting reading Mark, thought provoking.  
  • mark55man
    mark55man Posts: 7,922 Forumite
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    edited 13 February 2022 at 9:27PM
    Its interesting how everyone has different views of what important.  A lot of MFW are keen to break the back of a large long term mortgage, where the need for equity and security are paramount - but I started this journey from a position where I couldn't OP and make a significant difference to timescales, and also I am old enough that I am not really locking it away in the pension as I can access at any time.  Finally, I already have enough equity in the home, that although I probably won't I could downsize and clear it on demand.

    However for me this is the right balance quite a chunky regular payment and everything else building up so I can discount it from my other planning.  Happy to help with any questions although I am not a financial professional - just as they say a random guy on the internet :smile:
      
    I think I saw you in an ice cream parlour
    Drinking milk shakes, cold and long
    Smiling and waving and looking so fine
  • savingholmes
    savingholmes Posts: 27,305 Forumite
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    I am definitely in the need of more home equity to give security. I have very good DB pensions though when the time comes to retire but may need something to tide me over until I access them as I'd take too big a hit if I take them early.
    Achieve FIRE/Mortgage Neutrality by mid 2030
    1) MFW Nov 21 £201,999 with 237 payments to go - now £184,341 Equity 26.26%
    2) Spend on handyman & external building works & new patio door £11.9K
    3) CC £3.7K on 0% spends card but offset by £34K savings (part EF, part future home improvement)
    4) Mortgage neutral by June 2030 AVC £9.6K/£127.5K AVC target 7.5% value @15/4
    5) FI Age 60 annual income target £13.7/30K 45.7%
  • mark55man
    mark55man Posts: 7,922 Forumite
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    edited 14 February 2022 at 11:55AM
    So that's a good base.  But typically the payback on on will I end up losing money by taking it early is later than you might think.  To be fair, as a woman you would expect to live longer than that cut off point - however, the value of money/freedom earlier, ie when you are early 60s rather than later, ie when you are early 80s is a big factor for me in my thoughts - but maybe one for the pensions board!! I know I have blurred the discussion in this thread  
    I think I saw you in an ice cream parlour
    Drinking milk shakes, cold and long
    Smiling and waving and looking so fine
  • savingholmes
    savingholmes Posts: 27,305 Forumite
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    I have done a spreadsheet and used figures until age 99. You're right until around age 85 it's roughly okay. After that the gap widens by about £70K depending on how early I finish... I think the current inflation though is a lesson in the need to not leave yourself short later in life - so it's all about getting balance. 


    Achieve FIRE/Mortgage Neutrality by mid 2030
    1) MFW Nov 21 £201,999 with 237 payments to go - now £184,341 Equity 26.26%
    2) Spend on handyman & external building works & new patio door £11.9K
    3) CC £3.7K on 0% spends card but offset by £34K savings (part EF, part future home improvement)
    4) Mortgage neutral by June 2030 AVC £9.6K/£127.5K AVC target 7.5% value @15/4
    5) FI Age 60 annual income target £13.7/30K 45.7%
  • I find your diaries really interesting Mark and you talk a lot of sense... I've got 25 years until retirement and need to get my !!!!!! into gear.  So easy to get distracted by kids and house rens and forget about the long term. 
    Mortgage neutrality really interests me as an alternative to being MF.... our mortgage is currently £345k with a 20 year term, I think because it's so chunky we just kind of ignore it!
    Debt - Car loan £19k. New savings goals: Emergency fund £1000/£1000, FFEF £200/£10000
  • mark55man
    mark55man Posts: 7,922 Forumite
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    I was I was as sensible earlier as I am now !!. 

    It is hugely difficult to look at the long term when you have 5 little cost centres to worry about in the day to day.  Yet - especially for your OH who I assume is a Higher Rate taxpayer - the advantages of shoving stuff into the pension are real. Even if in the case of younger punters such as yourselves it may well not be realisable for years.  If I'd been less in debt earlier I could have put more in there to get the 40% tax back, and like most people only taking it out at Basic rate as a pension that's quite a win.
    I think I saw you in an ice cream parlour
    Drinking milk shakes, cold and long
    Smiling and waving and looking so fine
  • savingholmes
    savingholmes Posts: 27,305 Forumite
    Name Dropper First Anniversary Photogenic First Post
    At least you got with the programme in time Mark. Some people never wise up until they come to draw their pension by which time they've made life unnecessarily hard for themselves.

    @ohdearhowdidthathappen I would strongly recommend pension - however you are in a unique position as you already have enough home equity to downsize to a decent house - once the littlies up and leave...

    Achieve FIRE/Mortgage Neutrality by mid 2030
    1) MFW Nov 21 £201,999 with 237 payments to go - now £184,341 Equity 26.26%
    2) Spend on handyman & external building works & new patio door £11.9K
    3) CC £3.7K on 0% spends card but offset by £34K savings (part EF, part future home improvement)
    4) Mortgage neutral by June 2030 AVC £9.6K/£127.5K AVC target 7.5% value @15/4
    5) FI Age 60 annual income target £13.7/30K 45.7%
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