31/12/2025 and counting...

Hello everyone,

After lurking and reading on here for a while now, I've decided to kick off the new year with a plan to become a mortgage-free-wannabe. It's exciting to be putting the ideas I'll be working through down in words here on the forum, as it helps to make the whole thing much more committed than just having the thoughts bouncing around inside my head. So thank you everyone, for this opportunity.

Briefly, a decent deposit meant I took out an £85,000 repayment mortgage (49% of the £165k cost of the flat) in October 2007, fixed rate for 25yrs. The interest rate of 6%pa probably wasn't the best value around (costing about £1.85 for every £1 borrowed), but it was just before the banking crisis, just before interests rates plunged, and I was pretty keen on a 25yr-mortgage anyway.

I've already been making over-payments since December 2017 when I can afford it, which has brought the original monthly payment of £525pm to its present level of £370pm, so plenty of ground has been won already. These over-payments were mainly made in 2018 (through a huge amount of overtime at work) and in 2020 since the start of 
Covid-19 (due mainly to no socialising). However, changes at work mean that overtime is no longer available, and Covid will eventually come to an end - therefore, I'm eager to get some more concrete habits in place while there is the opportunity.

I'm due an annual mortgage statement from my building society by the end of January, so until then the following figures might be a bit of a back-of-a-fag-packet calculation. However, the outstanding balance on 31/12/2019 was £44,699, so I'm guessing it's now down to about £40k. I've spoken to the building society, and they're happy for me to pay it off early with no penalty. Therefore, the plan is to get that paid off and be mortgage-free by Wednesday 31st December 2025.

Here are a few points which I'd be grateful for any comments or advise on:

1) I'm single, have no dependents, no debts, few bills, no transport or commuting costs, and my cost of living can be fairly low when I want it to be. However, I also have no proper savings. Every time I've managed to save up a bit of cash, I see it doing nothing in the bank and so slap it on the mortgage instead. Issues like my ageing water-tank will have to be dealt with sooner rather than later, and I will need savings for that and any other emergencies. Unfortunately, this mortgage over-paying can become addictive, when perhaps my finances need to be a little more balanced.

2) I got excited recently by a comment elsewhere on this forum by someone extolling the virtues of saving even the smallest amount of money towards their mortgage - along the lines of something like "You CAN save pennies!" So on New Year's Day I took £100 out of the cashpoint as 'walking-around money' and am determined to see myself through to the 31st on it. Every penny I now spend is written down. No alcohol, no football, no records, no books, no travelling (all fairly straightforward with the way things are at the moment, admittedly, but I'm trying to build habits). And I like that line - you CAN save pennies!

3) At the moment I'm in the habit of over-paying in multiples of £525, as it helps me keep count. With this focus on pennies though, I'm going to start using however much is left at the end of the month. I just really want this mortgage out of the way as soon as possible.

4) Also at the moment, the building society recalculates my monthly repayments every time I make an over-payment. This means that the monthly payments come down, but the finishing date (presently October 2032) stays the same. They've said I can fix the monthly payments higher if I want. Would this be a more organised set-up than just random over-payments as and when I make them?

5) There is just one fly in the ointment...
My job is stable and relatively safe. I pay the maximum amount into a decent work pension, and have been here for nearly six years. The hours are good, if a little unsociable, and I take home about £1550 a month. However, I have been unhappy at work for some time. Some of the stresses are due to the present Covid situation, so maybe things will ease some time in the future (though I somehow doubt it), but this perhaps isn't the time to be looking for a new job. Part of me has considered over-paying to bring those monthly mortgage repayments down to the level where I could get a part-time job, but really I'd rather be working full-time and just get the thing paid off asap. This might just have to be something to like-it-or-lump-it.

Anyway, thank you all for sticking with me through that!

And roll on the next five years!
Mortgage started: 31st October 2007
Aim to be mortgage-free: 31st December 2025
«13

Comments

  • powerspowers
    powerspowers Posts: 1,100
    First Anniversary First Post Name Dropper
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    Hi 5more years,
    Well done on the payments you’ve made so far! Do you know how much interest you have saved?
    have you ever considered switching to a lower rate, your loan to value is so low you could be saving there. 
    I’d prioritise the emergency fund over over payments- I know the money isn’t doing a lot of it’s in a savings account on 0.01% but it’s there if your company disintegrates or the worst happens. 
    Can you take some small steps to looking for work even if it’s just getting ready to look if that makes sense, so cv update, work out what you want to
    do, get on linked in etc?
    good luck with your overpaying journey! 
    MFW 2021 #76 £5,145
    MFW 2022 #27 £5,300 
    MFW 2023 #27 £2,000
    MFW 2024 #27 £500/ £3,600


  • Thanks for your message, PowersPowers.

    You may well be right about switching to another rate. When I took the mortgage out in 2007, it was with a provider who I realise now was not terribly flexible. In 2013, they (and my mortgage) were taken over by the Nationwide, who seem much more flexible whenever I've dealt with them - perhaps it's time to go in and have a proper chat with them.

    There's little chance of my employer disintegrating - I work in a college of Oxford University, dealing with student accommodation and welfare issues, so it's about as stable as it can be. There are plenty of other jobs similar to mine at neighbouring colleges, but I suspect that the issues routinely thrown up would be exactly the same as I'm dealing with here. Getting the CV up-to-date is a must-do, so that I'm ready if/when something else comes up. For the time being though, I might just have to lump it, and try to count my blessings instead.

    Many thanks for you comments. And good luck to you too.
    Mortgage started: 31st October 2007
    Aim to be mortgage-free: 31st December 2025
  • FatJock
    FatJock Posts: 196
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    Hi FiveMoreYears,
    Welcome, and all the best of your MFW journey.
    As powerspowers said - definately consider switching to a lower rate. There is no harm in asking. A few £'s saved will lift the spirits and help keep you focused on your goals. Also if you have a water tank, is it something that is covered by the service charges? (I assume you still live in a flat).
  • Thank you Jock.

    Talking to the building society is something I hadn't previously considered up until now, but it is now something that I shall certainly look in to. There are good things I could say about 25yr-fixed mortgages, but flexibility (as the name suggests) isn't one of them.

    The flats are in a Victorian conversion, carried out twenty years ago now. Generally speaking, I've been told that these water-tanks have a life of a dozen-to-fifteen years or so, so this particular tank is probably on borrowed time already. Even if it hasn't died yet, I need to be ready before it does pack in.

    Thanks again, and good luck to you too.
    Mortgage started: 31st October 2007
    Aim to be mortgage-free: 31st December 2025
  • beanielou
    beanielou Posts: 89,285
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    Nationwide are great.
    All about the members.
    Look online at their current offers & see how easy it is to switch  :)
    I am a Forum Ambassador and I support the Forum Team on Mortgage Free Wannabe & Local Money Saving Scotland & Disability Money Matters. If you need any help on those boards, do let me know.Please note that Ambassadors are not moderators. Any post you spot in breach of the Forum Rules should be reported via the report button , or by emailing [email protected]. All views are my own & not the official line of Money Saving Expert.

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  • beanielou said:
    Nationwide are great.
    All about the members.
    Look online at their current offers & see how easy it is to switch  :)
    Thanks very much for that Beanielou.

    I will get on to this.

    Many thanks again.  :)
    Mortgage started: 31st October 2007
    Aim to be mortgage-free: 31st December 2025
  • caeler
    caeler Posts: 2,605
    Mortgage-free Glee! Photogenic Name Dropper First Post
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    Good luck with your goal! It’s so exciting to be so close! I owe a similar amount to you and I’m with the Nationwide too. I love the letter you get every time you overpay telling you the new term! 
  • caeler said:
    Good luck with your goal! It’s so exciting to be so close! I owe a similar amount to you and I’m with the Nationwide too. I love the letter you get every time you overpay telling you the new term! 
    Many thanks Caeler.

    Yes, I enjoy those letters too - my over-payments so far have led to the lowering of my monthly payments, rather than changing the completion date. Nationwide have said that I can change that arrangement if I want, but for the moment I'll leave it as it is.

    The next thing to do is to look at the chances of changing my mortgage with the Nationwide. The 25yr-fixed mortgage I started with in 2007 was with another provider (since taken over by the Nationwide in 2014), and is perhaps looking a bit dated (though importantly it has always been affordable). The world of mortgages and interest rates have changed greatly over the past thirteen years, and the Nationwide seem a much more helpful provider, so I'm going to look at what else they have to offer.

    Thanks again Caeler. Good luck to you too.
    Mortgage started: 31st October 2007
    Aim to be mortgage-free: 31st December 2025
  • caeler
    caeler Posts: 2,605
    Mortgage-free Glee! Photogenic Name Dropper First Post
    Forumite
    I've found Nationwide very helpful over the years (not that I have much to compare them to).  Why not give them a call to see what your options are?  
  • Annual mortgage statement arrived in the post today, so here are some concrete and up-to-date figures:

    Opening balance 1/1/2020 .......... £44,634
    Total interest ................................ £2,563
    Total payments received 2020 ..... £9,610
    Closing balance 31/12/2020 ........ £37,652

    My monthly payments from Feb 2021 will be £371 per month, on a calculated final repayment date of November 2032.

    The building society have also sent me a letter offering the chance to switch to a better deal with them. Despite some of those figures above leaving me feeling very happy with how my over-payments have gone during the past year, I still can't help feeling that that interest figure still looks a little too ugly. There's some work to do on that... I will pop into the branch next week to see if I can chat to someone (if not, I'll phone their call-centre for more information). That gives me a bit of time to consider my questions...

    Pay-day is on Monday, and I'll be ready to make another over-payment...
    Mortgage started: 31st October 2007
    Aim to be mortgage-free: 31st December 2025
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