Mortgage free for a bigger mortgage - diary

Hi all,

I am really inspired by all of the other threads on here. We are in a decent size 3 bed semi which we paid £500k for last year. However, our area is pricey and I'm unwilling to budge on location. We have £440k outstanding. The house is currently worth £550k (we got a good deal due to desperation of the sellers to move up North plus our area has been gentrifying a lot).
My goals are not clearly defined yet. I know I do want a bigger house with a driveway before we have children. I would also like to consider buying investment property. All I know is that having a smaller mortgage/more equity will help with any of these things! 

I (N) am 26 and Mr (A) is 32. We both have decent paying jobs, my career means my earning potential is a lot higher than his though, although I'm pretty early on in my career.

Finances
Expenses: we each transfer £1350 onto the joint account per month, to cover all joint expenses, but I realise this isn't the true MFW way.
Mortgage: £1,339, we currently overpay by £660 per month, total = £2,000 term remaining: 22 years, 4 months
Pet insurance: £18.38
Council tax: £157 (it has just gone up, 12 installments)
Sewerage: £14
Water: £22
Sky broadband: £22
Gas & Electric: £67
Netflix and Hayu (necessity ;)): £13.99
This leaves £400 per month which gets spent between food / socialising.
We also pay house insurance which was £220 last year but renewing will be around £170 for best deal available. We pay this annually.
Personal expenses:
A also has a car, he spends £50 pw in petrol to get to work. His MOT averages £200 per year. 
Phone contract: £14 
Interest free debt: £200 per month (26 months remaining)
A total = £464
N phone contract: £4.99.
Before COVID I spent £200 per month on trains to London. I've not spent that for a year (and instead gained a shopping addiction). Flexible working post pandemic will expect train travel to be roughly £150 per month.
No debts.
Every week I buy sushi, £20 (I justify this as #supportsmallbusiness)
N total = £175
Income:
N: 3000 per month net
A: 2,400 per month from work, £1,500 per month from extra work
Total: £6,900
Savings: 
N: £55,000 (£35k in current savings account, the rest between premium bonds, Vanguard and Trading 212)
A: £10,000 (sitting in his current account grrr)
Joint: £2,000 (for wedding, see below)

We are very proud of what we have achieved which we did without any financial help from parents. I grew up in poverty so I've always been very careful with money. However, we have terrible habits. We live frugally and then BAM we drop £12k a year each on holidays. The pandemic should have helped us, but we spent our money on our deposit, doing our house up, extra treats etc. So I know we need to do better.

To add more to the mix, we get married this year and have around £12k left to pay for it. It is not fun!

I am hesitant to use savings to pay down the mortgage, my investments currently reap more than the savings in mortgage interest so I am striking a balance. I want to overpay the mortgage using excess in salary. 
We are trying to take on new things to push ourselves. A already works a lot for his extra income, I tend to mainly enter competitions (that's why there's casually £50k sitting in my savings!) and I am going to do more surveys, mystery shopping etc.

Hoping this will be a fun way to be accountable but I am also fairly new to writing on this board, so let me know if I've missed something or have done something wrong.

Comments

  • Angela_D_3
    Angela_D_3 Posts: 1,071
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    I was told whilst the borrowing is so cheap to invest instead of over paying the mortgage.  
    Is £12,000 for the wedding as cheap as you can get it ?  My biggest regret is the amount i spent on my wedding,  the next day i felt remorse.  
  • FatJock
    FatJock Posts: 196
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    Hi Nala67 - Welcome, I look forward to reading your diary. Is the term remaining (22y4m) including the overpayments or will the monthly OP reduce this timeframe?
  • nala67
    nala67 Posts: 14
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    I was told whilst the borrowing is so cheap to invest instead of over paying the mortgage.  
    Is £12,000 for the wedding as cheap as you can get it ?  My biggest regret is the amount i spent on my wedding,  the next day i felt remorse.  
    Hi Angela_D_3! No, the wedding is a bit extravagant and we have a few hesitations, but it's booked and committed. We have decided if COVID stops it going ahead, we will not continue as we can get refunds. We have a registry office booked with a small drinks after that is £1,000. We will stick with that if so!
  • nala67
    nala67 Posts: 14
    Name Dropper First Anniversary First Post
    Forumite
    FatJock said:
    Hi Nala67 - Welcome, I look forward to reading your diary. Is the term remaining (22y4m) including the overpayments or will the monthly OP reduce this timeframe?
    Hi FatJock, the 22 years 4 months is the new term if we keep up these current overpayments. The original term was 40 years (eek!)

    Thank you, we hope that we can really change our habits and look forward to sharing with you all :smile:
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