The Case of the Overwhelming Mortgage

AgathaSquirrel

I’ve lurked for a long time. I have no-one in real life I can discuss these issues with and thought it might be helpful to get it out of my head and on to paper. I am mid 40s, married, with two pre-teen children. We moved in 2017, with a 20 year mortgage of £140,000 and interest of £10 per day. We now have a mortgage of £103,000 and interest of £5.99 a day. We should hopefully move into double figures in summer 2021 and are due to remortgage summer 2022. I’m working extra hours at the moment so overpaying where I can. It is unlikely the mortgage will be paid before preteens go off to university, so saving separately for that too. House still needs a lot of cosmetic improvements so slowly working through those. We have one car loan we are chipping away at. The plan is to start saving for a new car as soon as this one is paid off. I work for the NHS so hope to be able at access my 1995 pension at 60, have a couple of small pensions I can access at this time but once the mortgage is paid off overpayments will be directed to retirement savings for both of us.

That is basically us in a nutshell. We live in Scotland, which is probably relevant for university funding. The mortgage is huge for this area, I have regrets from time to time about moving to a larger house but in a lot of respects during Covid-times, it was a good move and gives us space to work/study we just wouldn’t have had in the old house. It would be good, however, to have a mortgage that allows me to sleep at nights - hence the overpayments and diary.

SpendingPennies

Good luck on your mortgage free journey @AgathaSquirrel

AgathaSquirrel

Thank you @SpendingPennies. 

There won’t be much to report on for the next week or so until pay day, when I hope to make a £200 overpayment. I’ve just checked the interest on the mortgage and it’s remaining at £5.99 so I’m happy with that. I started tracking it last year at £6.45 so it’s been satisfying watching it come down, although horrifying to realise we are paying that out on a daily basis.
Just had a reminder email to input the gas and electricity readings for the month. This won’t be pretty, there is virtually always someone at home at the moment and my husband believes in putting the heating on, rather than an extra jumper. I fear we will be in debit this month. Hopefully the weather will be milder soon and we will be able to reduce the heating.
Off on a walk with the preteens and my dad today. Will be good to see him. It’s been a while.

AgathaSquirrel

Lovely walk with my dad, then a second walk by myself to post a card. Hopefully if I have the energy I’ll manage a zoom class tonight as well. It makes such a difference to my mood to be able to get out in fresh air and exercise.

L9XSS

Good luck with your journey, I too live in Scotland and have 47 months of mortgage payments left before I finally own my home. I doubt I can get it paid any quicker however I will have reduced my mortgage term substantially from when I took out a 25 year term in February 2008. I’m now focusing on paying into SIPP for the tax relief.

AgathaSquirrel

47 months is within grasping distance @L9XSS. I’d love to throw more at my husband’s pension and I know it makes financial sense but it is the mortgage that gives me sleepless nights. Perhaps when we remortgage next year we might think about it again.
Confirmation today one of my temporary posts will continue into next year. It’s a bit of a relief, we couldn’t overpay without it.

L9XSS

Good news on the temporary post allowing overpayments. It’s a balancing act what to focus savings/overpayments on. The emotional side says get the house paid off! Keep going with your overpayments, I was able to until circumstances changed, I’m so glad I made the overpayments from 2008 to 2014. As you say I’m in touching distance.
You will be pleased you reduced the term, every overpayment means your saving interest and owning another part of your home. Living more frugally is worth it.

AgathaSquirrel

Trying to make sense of husband’s pension fund this morning. He pays £200 a month at the moment but wondering about adding another £50. I don’t really understand his work pension scheme. Need to do some more reading and make sense if it.

AgathaSquirrel

Decision made - another £50 a month to husband’s pension.

FtbDreaming

I was trying to understand my pension last night when Martin Lewis was on the telly. Mine is a defined benefit I think (it’s nhs) with final salary. Dunno anyway according to the statement it’s worth about £900 a year upto now that’s after 4 years contributions. I’ve got about another 20-25 years left in me I reckon. I definitely don’t wanna work past 60. 

I might be a negative nancy but I’m also weary of what if I don’t even live to draw it? That’s a waste of money lol. I do find pensions mind boggling! 

At least our MFW ambitions will hopefully have us a roof over our heads that’s paid for when we do get to pension age x

powerspowers

Good luck squirrel. I think every little helps and then you know you are doing what you can towards your goal. It’s definitely not worth losing sleep over.