Getting shot of the mortgage sooner than 2049!

Bluegreen143

Thanks, that’s good to know! I’ve not banked there before.

Been totting up our current balances:

SAVINGS

Help to Save £3,400
Emergency Fund £3,322.62
My savings £41.49
Short term pots (eg holidays etc) £1,835

INVESTMENTS

My pension £23,567.16
Red pension £10,673.54
My Lifetime ISA £1,749
My S&S ISA £15.01

DEBT

Mum car loan £3,420 (0% interest)
Mortgage £132,140 (currently around 1.8% until I think Jan 2025… so that’s creeping up on us…)

I’d like to pay off my mum before I need a new mortgage deal, as clearly the rate will whoosh up and I’ll need the room in the budget. Our mortgage is only £530 a month at the minute.

As well as working to having a £10k emergency fund, I’d like to start paying extra in Red’s pension as he turns 40 early next year and has only £10k in there. Mine isn’t great either, but I’m only 35 and my employer matches a much higher amount so mine grows quicker each month. 

Cheery_Daff

Sounds like a sensible plan to pay off your mum and get more info Red's pension before the mortgage changes.  How long do you reckon the car loan will take? 

Bluegreen143

@Cheery_Daff I’m paying £160 a month so about 20/21 months. So not currently in time for our mortgage needing redone, so we will definitely need to accelerate this. 

I wonder if the current £3k is enough of an emergency fund for now (eventually I want £10k) and we could maybe temporarily pause saving to this and just send the extra money to my mum? 🤔

Based on putting £350 a month into the emergency fund atm we’d be paid off within 7 months doing this. And if we had to use the emergency fund in the interim we could pause the extra payments to my mum to rebuild it, she isn’t fussed about how us paying it off more quickly. 

Baileys_Babe

If it were me I'd pause sending any money to the emergency fund until I had paid off the car loan or I had needed to use the emergency fund. That way your only debt would be the mortgage.

Once you have paid the car loan what are your plans for that money? Save for your next car? Pay it to the emergency fund?

Bluegreen143

Must confess to a cheeky KFC on Tuesday night, feeling so ill and Red was home late! £36 spent. 

First takeaway we’ve had since his brother passed away in July so not going to feel too bad about that. 

Managed to make tuna mac & cheese last night for myself and the kids. Red doesn’t like mac & cheese at the best of times and was feeling ill himself by then so he had bolognaise sauce from the freezer instead. 

Red also spent £22 on a birthday card for his nephew + £20 to put in the card. 

Feeling somewhat better today but very snotty and blowing my nose approximately every 30 seconds. Delightful! 

We’ve had emails confirming all of our account switches will be going through which is great 🎉 

I do need to buy a birthday present for Red’s best friend’s little girl, who is turning 4 at the weekend and we’re going to the party. Need to order that today so it arrives on time. 

Used some of my personal budget to order a Paris guidebook in advance of our trip in February, and I couldn’t resist getting a Scotland one at the same time. We want to plan an adventure somewhere new for all of us, perhaps on an island or a couple of them, next summer. Looking forward to browsing through it and trying to plan something really fun 🙂

joedenise

I agree with @Baileys_Babe that it would be a good idea to pause saving untie the emergency fund for the time being and getting the car loan paid off.  £3000 is a reasonable EF.  A lot of people make do with around £1000 cash (me included although I do have Premium Bonds which could be used if needed as they are also part of the EF!).

Definitely be better to be rid of all debts before the remortgage is due.

Bluegreen143

Cross posted with you both but I think I agree. I will chat to Red about it tonight. I am risk averse but the reality is £3,000 covers a lot of emergencies! 

Red thinks I’m too risk averse but I would eventually like about £10k in there. 

Apart from the fact this covers about four months bare-bones expenses in the event of a job loss, it would then be enough to buy a second hand car outright without borrowing if ours died. I do expect ours to live for another 3-5 years at least though based on current mileage! 

Once the car loan is paid off I’d put that money into the emergency fund (which doubles as a car replacement fund), at least until our mortgage deal is up. I fully expect our next mortgage deal will be considerably more expensive than the current one! Regretting not fixing for 10 years now! 

I think we will definitely be under 60% LTV when we remortgage so should at least get the best deals 🤞🏼

We do also have our help to save accounts, which are due to mature before the mortgage deal is up. At that point there will be £6,000 in those inc the bonus. Not sure what we will do with that yet, either boost the emergency fund if it’s not where I want it to be yet, or maybe I can use it to finally get my wood burning stove 🙌🏼

(Or we use it to overpay the mortgage or put some into our pensions…)

Bluegreen143

I also didn’t mind borrowing money interest free from my mum at the time, as she was getting basically no interest on her ISA anyway. But I’m aware she could now be putting this money into a high yield account so it’s a bit of an opportunity cost to her. 

That said, she isn’t very proactive about this kind of thing and hasn’t moved any of her other savings into high yield accounts yet anyway. I might offer to come over one day and set her up a transfer into a better ISA, just need to do it delicately so I don’t offend her by suggesting she isn’t managing her money right. 

joedenise

Do you keep your £3000 EF in a high interest rate account?  If so you could just mention to your mum that's where you've moved your EF to to get a bit more interest.  Might just make her think she ought to move her somewhere like that rather than you just saying "I think you ought ..."

LadyWithAPlan

Wow you have a low interest rate and 16+ months to save up to get that mortgage down before jan 25 is great.
Personally I would be pausing the EF at your 4m mark, and also wait on doing big home projects eg  redoing the kitchen just to maximise what you can save down extra before that remortgage. It be a nice short goal and if you can get 8% on your savings in the interim.

Always a weigh up between pensions and mortgage -  I am still am saving up for my house deposit but I am still taking 15% of all my income and popping into a SIPP, I am self employed and older. Maybe set a % of income to go into pensions eg 10% as you still young before the remorgage then up it.

On the VR - I think its more fun when there is a point to it - I am also not a gamer (i get too addicted to even solitaire so I can't go near them!). However when they use VR in art/films it can be fascinating and extend the story - there was a VR addition after the Frida Kahlo/ Diego Riviera exhibition - where they 'met' in the afterlife (he was v unfaithful to her  when they were married and she stated that the bus accident and meeting him were her 2 great life tragedies!)  It was poignant and beautiful and as you could take your own pace makes you less sick! If you try to go too fast it can cause nausea..

Also they did an Alice in Wonderland going down the rabbit hole VR at the V&A and that was fabulous - getting made small and meeting the Queen of hearts! That was definitely worth it