Katkatmachine’s Adventures to Mortgage Freedom and Life Updates

katkatmachine

What's your interest rate on your current mortgage? Is it fixed, term length?
5.03% fixed until April 2026.

I assume your savings are tucked away in an ISA?
Yes, in ISAs. 

Are you both contributing into a workplace pension?
Yes, 7% for me plus 3% from the company. I also put GBP 100 per month to my LISA account.
My partner puts 9% and 3% from her company.

We’ve thought about what @beanielou commented above, and yes the house prices are indeed increasing which will affect our HTB loan. So we’ve agreed that we will pay off the loan end of this year instead of next year. We will not go on a holiday anymore to Strasbourg. Although we will be missing out on a holiday, we will be looking forward instead to finally paying off our HTB loan. I think that is a good compromise.

Money_Monkey

Thanks, I just wanted to get a clearer picture of your finances to offer any suggestions. It sounds like your pretty clued up finances wise. Do your usual review again in 6 months at time (before you clear the HTB) and see where you are or if you need to adjust your plans.

I understand the goal of clearing your mortgage, but it's finding that right balance between work and personal life. 

Life is short, the HTB loan will get paid off. Just my opinion, take the holiday.

katkatmachine

Spoke to our finance team today and asked them to increase my workplace pension contribution from 7% to 10%. In terms of value it's not that's big of an increase since my salary is not that big but hey every little thing counts!

I'm also checking my partner's and see if we could bring it up to 15% from 9%.

Money_Monkey

I agree with that 100%, good on you both.

The earlier you start the better. The combined power of government top up (tax relief), compounding and, long term stock market returns is hard to beat. I have been paying into my kids pensions for a number of years and maybe one day in the future they will appreciate it.

katkatmachine

2024 End Year Review

Original mortgage: £276,250 

Mortgage left: £241,00

Remaining full term: 19 years

HTB: 10%

Savings: £50,000

Credit card debt: 0.00

Last July, we went back to our home country for a month-long holiday, it’s been five years since our last visit! We spent quite a lot, but honestly, the long break was so worth it. 😊

Whilst we were there, my family and I also took a week-long trip to Japan. As an otaku and a huge anime fan, visiting Nippon was a dream come true and it was absolutely amazing! I loved it so much that I’ve decided to take a sabbatical with my partner when I turn 40 (in five years) to backpack around Japan for 2-3 months. One week there is not enough! I want to visit the whole country even the remote areas!

To make that happen, I’ve set a big financial goal: save at least £100K in savings and investments within the next five years! To achieve this, we’ll be putting aside £1.7K every month.

We've also finally cleared all our debts except for the mortgage. We paid off our car finance, so now me and our Hyundai i10 will be together forever (or at least until it decides to give up on us 😂). No more credit card balances or transfers either. With those extra funds, we’ve started making £500 overpayments on our mortgage each month. This will reduce our remaining term from 19 years to just 13!

About our HTB loan, we plan pay it off using our savings by June next year.

It’s still a long journey, but we’re getting there, one step at a time. 💪                                                                                                                                                                                                                                                                        Love,
Kat                                                    

katkatmachine

2025 End Year Review

Original mortgage: £276,250 

Mortgage left: £227,000

Remaining full term: 18 years

HTB: 10%

Savings: £60,000

Credit card debt: 0.00

We are now in the process of paying off our HTB loan via savings, I just wish our solicitor would reply! It's been a week since HTB sent the redemption letter and I've chased our solicitor twice to proceed with the letter of undertaking but still no response! This is getting annoying now. If by Friday there is still no reply, I will contact them again!

About the mortgage, we've been overpaying and if we continue, we are on track to pay it all off in 11 years. I will be mortgage free before I turn 50! Woohoo!!!

Love,
Kat

Jemma01

Just reading through, I'm surprised you've still not paid your HTB despite having the funds for it. Why did you wait until it increased in value and cost you more?
Also the 5% mortgage is a lot of interest/month. I borrowed 175K @ 5.44-5.19%, and the first month was £800, that's a lot of money that I could go on holiday with, your mortgage is even higher.

Are you comfortable sharing how much interest you're paying/month vs how much interest you're gaining from the 60K per month? Also how much is the HTB worth now?

katkatmachine

We don't have all of our savings here in the UK, some are in our home country. And my partner is not comfortable having not enough emergency funds after we pay off HTB so she wanted to build more extra funds first.

Yes, 5.03% is indeed a lot!!! But that is the lowest rate we could get at the time so we had no choice, that's £950 in interest monthly. We're in the process now of moving to 4.07% as our fixed rate is ending soon. But we're still going to pay the same amount so the extra will go to overpayments, that would further decrease our mortgage term to 12 years I think. 

Our HTB loan is now £35,500 from £32,500. So that means, we only have an APR of around 1.49% per year! We have ISAs where we're getting around 4.40% so I guess we made the right choice of putting it into savings first.

Anyway, we are really happy with the numbers as I was expecting that the our house value would increase a lot but didn't. hehehehe. I hope after paying our HTB loan, it would continue to increase. But we are not really  planning to sell our house in the next 10-15 years so I don't want to worry about the value for now. Just really happy that the interest is not that much.

katkatmachine

Our solicitor just informed us that we've completed on our Help To Buy redemption! OMG!!!

The whole process was very quick for us, it only took two weeks after we submitted our redemption application to HTB. But it was actually thanks to me because I called HTB for every action we took! Honestly, they wouldn't do anything and just let your application get piled with others if you don't call them!!! And our solicitors too, they didn't even update us that they've already sent the letter of undertaking, I was waiting for several days for any update, and just BLAM! sent us an email that we're completing the next day! I was not ready! I was expecting it would take 4-6 weeks but no!!!! It was very quick!!!

Nonetheless, we're really happy that we're finally done! We still have a mortgage but we'll get there in time. For now, it's time to celebrate our small win!!!

Woohoo!!! 

beanielou

Good news.