The Case of the Overwhelming Mortgage

LadyWithAPlan

So sorry to hear of your loss, please take care of yourself and take time out as you need.

I am sure your father would be delighted to know his money is helping his daughter be warm and safe in her own fully paid home.

AgathaSquirrel

Made an overpayment to small mortgage today. Aiming to get to £20000 and when probate clears we shall pay this off. Think we’ll be remortgaging for the region of £47,000/£48,000. We will remortgage for 8 years but aim to pay off in 5 years. That will make us mortgage free by 53/54. Money still needed for work around house and husband’s pension. We need to build up savings for house work and consider pension savings. Once I have a few more months of my new wage I can start to think through savings/pension planning.

savingholmes

Will be lovely to be mortgage free in your early fifties.

AgathaSquirrel

Thanks to a hideous cold I spent much of yesterday researching pensions. Mine is NHS and difficult to predict until we get the McLoud judgement pension statements. I have been part time for 13 years which has had an impact. My husband’s is very poor, currently a pot of £50000. We are both on track to get full state pensions at 67. I also have a small stakeholder pension, currently only paying £20 a month into this. So, priority 1 for pension is to increase husband’s contributions by £100. I will also increase my stakeholder contribution by £25. He will continue to increase his pension contribution with every pay raise. Once I have my pension statement in the autumn I can see how close we are to a predicted moderate lifestyle and perhaps get some independent advice. The aim is to not work until we are 67. 60 would be the ideal but I think unlikely at present. Once the mortgage is paid off we can throw more money at the pensions.

savingholmes

Focusing on your pension sounds a good plan. Well done for the research. I know it's controversial - but because of the tax back  on your pension - it might be worth considering focusing on that sooner ahead of the mortgage as it also needs time to grow... I'm not a fin adviser however so absolutely do your own sums.

AgathaSquirrel

I know. It makes financial sense to focus on the pensions… but I can’t get my head out of overpaying the mortgage. This is quite a big house and we may downsize in the future to free up money for the 60-67 years. 

savingholmes

You do you. I wish I could have been mortgage free by this stage in life (your target age).

AgathaSquirrel

Some progress - we’ve increased husband’s pension to £350 a month. Aiming to increase it to £500. Haven’t increased my stakeholder one yet, mainly because I haven’t worked out how to do it yet. 

Most excitingly we’ve reached the halfway point in our mortgage £70,000 down and £70,000 to go. We’ve obviously paid a lot more than this over the years as we’ve progressed up the property ladder but psychologically good to know we’re half way through this one. £140,000 seemed like a big mortgage to be taking on in our early 40s so to get half paid off in 6.5 years feels like an achievement.

savingholmes

That's really good going on both fronts. Well done you!

AgathaSquirrel

Mother’s Day today. I am a mum but I’ve never made a big deal about it. The teens will probably have bought me something and one of them might even make me a coffee. Finding it hard today. My dad never made a big deal out of it either. Probably didn’t realise it was Mother’s Day most years. I’ve ordered my mum flowers and will go and see her this afternoon with some cakes. I’ve also organised flowers for MIL but DH can do the visit. I’ll go to the beach at some point today. It’s the place I feel most connected to him. Most days are fine. Some are just harder to get through than others.

Overpaid mortgage today. Should be on track to have small mortgage to £20000 by the time the fix is up in September. Will then pay off with inheritance.

Looks like we will gain from national insurance changes in budget. We get child benefit already and unlikely our wages will increase now so unlikely to affect us there.