Getting shot of the mortgage sooner than 2049!

Sarahwithlove

Bluegreen143 said:

Lots to think about ladies - thanks for all the input.

I think for now I’m happy enough to move my focus to mortgage OPs once I’ve got to £2k emergency fund but I will continue to fund the emergency fund at a lower rate too. We will keep reviewing where we are each month and change focus if we need to. At the moment it feels like such a huge thing to know we will have £2k in emergency savings within a couple of months as it seemed unattainable back when I wasn’t working! 

That makes sense. Your still adding to it but at a slower rate and you've also got the 2nd wage now as well so know you could manage on one if you really had to. 

Baileys_Babe

Sarahwithlove said:

Baileys_Babe said:

Sarahwithlove said:

Baileys_Babe said:

Bluegreen143 said:

@Baileys_Babe I keep wavering between having a £1k or £2k fund. When I add in the extra £1k it’ll be at nearly £1,600 so I think I will try to get it as close to £2k as I can the next month. I am going to call this week to round up my mortgage DD from £421 to £500 to at least start overpaying though.

After I get to £2k I will focus more on the mortgage but will set a fixed amount to keep adding to the E fund as obviously once we have our next emergency it’ll go down if we don’t keep topping it up.

That all makes sense to me and in your position I would do the same thing 😊

Sarahwithlove said:

After the initial 1k and debts paid off Dave Ramsey suggests focusing on a 3 to 6 month emergency fund. So if you lost both your jobs tomorrow what's the minimum you could live on. What couldn't you do without. So that's my next aim now that my cards are paid off. I think I would feel more secure knowing I have that behind me. I too like you will increasing my mortgage payments to a round number but I'm going to do it via a standing order so could stop it in emergency and then put rest towards my additional emergency fund before I overpay more. 

The terms & conditions of mortgage vary greatly. On our mortgage we are able to claim back any and all overpayments without penalty. As a result we have overpaid our mortgage and continue to do so with our SHTF saving - our only income earner losing their job. Separately we have an emergency fund of about £2k this is for various things that would be an emergency for us, these savings are easily accessible.
Each household needs to plan how best to get their finances organised to suit their situation, it is not a one size fits all.

I agree but personally I would never want to request money back from my mortgage I would rather have a 3 to 6 month emergency fund hence why I suggested it. 

We do have over 6 months pay (which is more than 6 months normal outgoings) in our overpayment fund in our mortgage account (paid off the mortgage) this is saving us interest on this money (no savings account we could get is paying anywhere as near the same interest rate) and we have chosen to have it there as despite it being easy to get we would have to be in dire straights before we would want to reclaim it. This way we don't fritter it or use it for something else like replacing the boiler, for us currently this money has been spent, if and only if we lost our income would we think of reclaiming it. We have separate savings for things like replacement of white goods, car, emergencies. We have no plans to touch the mortgage overpayments with the exception of the above, OH job looks very stable and looks good for the future but you never know. Once the mortgage is paid off we will look for another home for our SHTF savings. If this happened tomorrow we would probably buy premium bonds, but who knows what products will be available then, as the time gets closer we will look at the options.

Sounds like you have a good plan in place. I don't think I have that option for my mortgage tbh. I too like your other half an in a fairly secure job at the moment so can see why it might seem better if you had same option as yourself. Like you said it might then be tempting to use it for other big expenses. Do you have a fund for things like a boiler emergency? I've started adding more sinking funds myself so think for me it would be a case of if I lost my job but I would get redundancy as work for my LA and they also do 6 months sick pay full and 6 months half so fairly secure. 

Yes, we have a boiler emergency fund as well as a boiler replacement fund and many many more 😂 Many years ago we used to have boiler cover, but the prices went up yearly with we used it or not (even with changing provider). Once the emergency fund was at a level we were comfortable with we cancelled the boiler cover and instead sent payments to a saving account for maintenance, emergencies and replacement, since doing this we have only need to call some out a couple of times for an emergency and we have easily covered the cost out of the maintenance/emergency fund and have been able to leave the replacement fund intact.

I used to work for the local authority and I always felt fairly secure with the terms and conditions, just wish the pay was better. I was around for many years of cutbacks, austerity and restructuring and lost many colleagues to redundancy and early retirement.

OH has worked for the same company in the same role for over 25 years!! I don't anybody else who has done this unless they work for the same company, they have an amazing staff retention rate. He is heavily involved in the development of the company and is privy to the financial position so would have a lot of warning if difficulties were on the horizon which is reassuring and makes planning easier.

Sarahwithlove

Baileys_Babe said:

Sarahwithlove said:

Baileys_Babe said:

Sarahwithlove said:

Baileys_Babe said:

Bluegreen143 said:

@Baileys_Babe I keep wavering between having a £1k or £2k fund. When I add in the extra £1k it’ll be at nearly £1,600 so I think I will try to get it as close to £2k as I can the next month. I am going to call this week to round up my mortgage DD from £421 to £500 to at least start overpaying though.

After I get to £2k I will focus more on the mortgage but will set a fixed amount to keep adding to the E fund as obviously once we have our next emergency it’ll go down if we don’t keep topping it up.

That all makes sense to me and in your position I would do the same thing 😊

Sarahwithlove said:

After the initial 1k and debts paid off Dave Ramsey suggests focusing on a 3 to 6 month emergency fund. So if you lost both your jobs tomorrow what's the minimum you could live on. What couldn't you do without. So that's my next aim now that my cards are paid off. I think I would feel more secure knowing I have that behind me. I too like you will increasing my mortgage payments to a round number but I'm going to do it via a standing order so could stop it in emergency and then put rest towards my additional emergency fund before I overpay more. 

The terms & conditions of mortgage vary greatly. On our mortgage we are able to claim back any and all overpayments without penalty. As a result we have overpaid our mortgage and continue to do so with our SHTF saving - our only income earner losing their job. Separately we have an emergency fund of about £2k this is for various things that would be an emergency for us, these savings are easily accessible.
Each household needs to plan how best to get their finances organised to suit their situation, it is not a one size fits all.

I agree but personally I would never want to request money back from my mortgage I would rather have a 3 to 6 month emergency fund hence why I suggested it. 

We do have over 6 months pay (which is more than 6 months normal outgoings) in our overpayment fund in our mortgage account (paid off the mortgage) this is saving us interest on this money (no savings account we could get is paying anywhere as near the same interest rate) and we have chosen to have it there as despite it being easy to get we would have to be in dire straights before we would want to reclaim it. This way we don't fritter it or use it for something else like replacing the boiler, for us currently this money has been spent, if and only if we lost our income would we think of reclaiming it. We have separate savings for things like replacement of white goods, car, emergencies. We have no plans to touch the mortgage overpayments with the exception of the above, OH job looks very stable and looks good for the future but you never know. Once the mortgage is paid off we will look for another home for our SHTF savings. If this happened tomorrow we would probably buy premium bonds, but who knows what products will be available then, as the time gets closer we will look at the options.

Sounds like you have a good plan in place. I don't think I have that option for my mortgage tbh. I too like your other half an in a fairly secure job at the moment so can see why it might seem better if you had same option as yourself. Like you said it might then be tempting to use it for other big expenses. Do you have a fund for things like a boiler emergency? I've started adding more sinking funds myself so think for me it would be a case of if I lost my job but I would get redundancy as work for my LA and they also do 6 months sick pay full and 6 months half so fairly secure. 

Yes, we have a boiler emergency fund as well as a boiler replacement fund and many many more 😂 Many years ago we used to have boiler cover, but the prices went up yearly with we used it or not (even with changing provider). Once the emergency fund was at a level we were comfortable with we cancelled the boiler cover and instead sent payments to a saving account for maintenance, emergencies and replacement, since doing this we have only need to call some out a couple of times for an emergency and we have easily covered the cost out of the maintenance/emergency fund and have been able to leave the replacement fund intact.

I used to work for the local authority and I always felt fairly secure with the terms and conditions, just wish the pay was better. I was around for many years of cutbacks, austerity and restructuring and lost many colleagues to redundancy and early retirement.

OH has worked for the same company in the same role for over 25 years!! I don't anybody else who has done this unless they work for the same company, they have an amazing staff retention rate. He is heavily involved in the development of the company and is privy to the financial position so would have a lot of warning if difficulties were on the horizon which is reassuring and makes planning easier.

Sadly that's one of problems with LA but I have several colleagues who are near or approaching retirement age so would be first to take redundancies. We're going through a lot of changes at the moment and there's a lot of very unhappy people so will be interesting 12 months. But I feel very secure in my job so in current times I'm happy with that. 

Baileys_Babe

I'm glad you feel secure in your job, it makes planning easier.

Bluegreen143

Glad you have a secure job @Sarahwithlove and your husband too @Baileys_Babe.

My job is a 12 month fixed term so will be interesting to see what happens at the end. My manager is keen to keep me I think (she was the one who phoned to ask me to come back) and I’d like to stay if I can keep the family-friendly hours, as I like the job/team and the pay is good. But it all depends where the company is and if there is money to keep an extra team member I guess.

Red is a smart meter fitter so that won’t last forever but he said his company will look to move the guys into fitting electric car charging ports over the next few years. He does have a lot of contacts in other companies doing a similar line of work which is good as he’s made a point of staying in touch with a few old colleagues and managers as they all moved on, plus my BIL works in the same job for a different company. So long term not very secure but prospects of other work, and for the next few years there is still plenty work left in smart metering.

smudge56

- research if it’s worth paying to top up my two incomplete NI years for my state pension (keep putting this off as it seems complicated!)

You don’t have to pay anything as you get credited with a national insurance credit for the time you are receiving child benefit 

Bluegreen143

@smudge56 I know and am really thankful for this - it’s from previous pre-kid years as I didn’t have a part time job the first or most of the last year I was at uni (the last term I left my part today job as wanted to concentrate on my dissertation and revision, the first year I had moved too far away to keep up my part time job from school and was just too busy having fun to look for one until the summer 😮)

Sarahwithlove

If you think you will get your full 35 years you will need then I wouldnt worry about topping it up. 

Bluegreen143

It’s so hard to say isn’t it! What if I want to retire super early or get ill or something and can’t work 🤔 will ponder on it.

Financial list for today 
- Mealplan/shopping list/do Lidl shop
- Email in about consolidating my old and new pension
- Set up standing order to round up mortgage payment 
- Nag Red to take meter reads

Sarahwithlove

Bluegreen143 said:

It’s so hard to say isn’t it! What if I want to retire super early or get ill or something and can’t work 🤔 will ponder on it.

Financial list for today 
- Mealplan/shopping list/do Lidl shop
- Email in about consolidating my old and new pension
- Set up standing order to round up mortgage payment 
- Nag Red to take meter reads

It is hard to say. Tbh I wouldn't be surprised if in 30 years time the pension is means tested.