Moved to the "forever" home. Now to pay it off!

Cornish_mum

Dear Pepperwand, we are in very similar circumstances but now 6 years on so wanted to stop by to say hello and good luck on your journey. We have a similar take home income and started out with 250k mortgage when we moved into our family home. We have a DD and one DS now 5 and 9). We are now at 178.5k and 15 years to go assuming no more OPs. We didn’t overpay at all in year one but ramped up as soon as we had wiggle room and remortgaged to reduce our term last year.  Like Shanghaijimmy I wasn’t comfortable with the amount we owed and felt the need to reduce it sub 200 as quickly as possible. We are now splitting our spare cash between extra pension payments, savings for DS (he needs extra help at school) and the occasional OP. We both are close to the higher rate tax rate and make additional pension contributions to make sure we are below it (and make sure we keep our child benefit). The first few years are the hardest when nursery costs so much and the interest seems so high but it definitely gets easier! CM

pepperwand

@Cornish_mum thank you so much, that's reassuring to know it gets easier! In our previous house we owed £163k so going to £270k feels massive, although the house is SO much better for us as the family and as the children grow. Our eldest goes to school in September then the youngest will be eligible for the 30 free hours next year at which point our childcare bill should dramatically reduce and things start to feel a bit less daunting. We had originally planned to move next year (we really had outgrown our last place but it would have been manageable for another couple of years)...but then the stamp duty holiday came along and spurred us into action. Luckily we were able to complete before the deadline as it saved us £12.5k.

rugbymadfamily

Congrats on the forever home! Good luck, sounds like ou have a solid plan in place. My only advice is to reassess every so often (once a quarter or every 6 months etc) to ensure you're still working towards the same goals as things do change over time.

I also fully agree with you on the cleaner, I would cut back many things before I cut back my cleaner! Like I would probably give up wine and takeaway before giving up the cleaner! Some things cost in money terms but save massively in sanity terms!

pepperwand

@rugbymadfamily thank you, yes I think we'll definitely have to regularly review especially as we'll still be getting used to the new house and what that means financially. It all works on paper but it'll be interesting to see how that pans out in reality. The house definitely needs some work but for now we're concentrating on the lower cost changes....ie removing the awful textured wallpaper and redecorating. The living room carpet will need replacing soon too it's really threadbare and the bathroom is a 70s throwback but we've decided to leave the bathrooms/kitchen for now as they're serviceable.

rugbymadfamily

We're doing the same in our place. Kitchen and bathroom are not to my taste lol but do the job. Whereas other rooms had terrible decor and so focusing on those first!

caeler

@pepperwand I think the regular reviews is good advice. It took me a while to get used to the bigger house / bigger financial commitments. Plus you’ll want to make it your home so some investment will be needed. 

pepperwand

Definitely, we're going to concentrate on the living room first as that's where we spend the majority of our time. The ensuite is shocking decor wise but in reality everything works ok and we don't spend a lot of time in there!

ruby_eskimo

Congratulations on the forever home!  Re: the pension talk, have you thought about a LISA as well?  The government essentially gives you 25% interest on deposits of up to £4000 a year and you also earn interest each month too.  If you withdraw before 60 I think, you'll lose any government bonus that you've accumulated but it's a nice way to top up any pension in future.  

pepperwand

@ruby_eskimo thank you. I hadn't considered a LISA actually, can you have a stocks and shares Lisa as well as a stocks and shares ISA? I will have to look into it, I had thought if I was going to save any more for retirement it should be via extra contribution to my workplace pension for the tax savings but I suppose it depends on what age I can access the money....when I eventually get to that stage.

ruby_eskimo

pepperwand said:

@ruby_eskimo thank you. I hadn't considered a LISA actually, can you have a stocks and shares Lisa as well as a stocks and shares ISA? I will have to look into it, I had thought if I was going to save any more for retirement it should be via extra contribution to my workplace pension for the tax savings but I suppose it depends on what age I can access the money....when I eventually get to that stage.

I believe you can have a LISA and another ISA (be it stocks and shares or a regular saver one).  Don't think there is a S&S LISA available on the market but I could be wrong!  I won't be able to access my work pension till I hit 68 (at the moment...) so knowing I could have a little something at 60 would probably be the difference between me still working full time at 70 like my dad or being able to drop to part time at 65.  Of course as you said it all depends on what age you can access your money and what your plans are for the future - personally it makes more sense to diversify where my retirement savings are so I have a little more flexibility.