Big mortgage and extension saving goals!

Sunday88

Hi everyone

I've loved reading MSE mortgage-free wannabe diaries so decided it was time to stop lurking and start contributing. I don't get to talk about this much in real life and wanted to get my plans and goals written down so we can start working towards them!
We are a married couple and two children (aged 3 and 1) working in hopefully pretty stable jobs from home since the pandemic. I have only returned from my second maternity leave in the last few months and was lucky to be able to get out to work a few days a week to start with but for now its back to the spare bedroom office. 
Last year we moved (during peak pandemic and with 2 very young children and no childcare) to our home which I am hopeful will be our 'forever' home or at least until the children are in secondary school, I am in no rush to move house again!
The timing was lucky as we had sold and found a new home before lockdown one, then when everything reopened and estate agents, surveyors etc were back to work and by the time it took everything to go through the stamp duty savings had been announced and we were just in time to take advantage of this. We have had an expensive year since doing a lot of DIY decorating, new carpets and furniture but we are nearly there and the plan now is to save up and complete a kitchen extension and possibly loft room when our children are no longer in ridiculously expensive pre-school childcare. In the meantime my husband sanded down and painted all our kitchen units and we painted the walls which has given it a bit of a facelift.

The house has apparently (Zoopla estimate) risen in value to around 500k since we moved in and bought at 460k. Our original 390k mortgage is at a 1.99% fixed rate until 2025 and my aim is to get to 65% LTV so owing 325K by the time we remortgage. In the first year we have done a small overpayment of on average £140 per month and now owe 380K so have paid off 10K in the first year. With maternity leave and the costs we've had this year I'm happy with this and hoping that as our children start school and childcare costs go down we can speed this up!
I will post a SOA in the next post - a few things to point out is we both have company cars/lease cars through work so car costs are deducted pre-tax. This is why the only car costs at the moment are for fuel. I have a good public sector mortgage but my husbands isn't so great and I think he pays in 5% so we will increase this soon. We pay £500 into his work share scheme at the moment (pre-tax) and £300 into a 1.5% savings account but my plan is to change this into a S&S ISA in the autumn. Our goal is to save around 100K for the extension work to avoid having to get into more debt for it.

Any advice really welcomed! 

Sunday88

Statement of Affairs and Personal Balance Sheet

Household Information[/b]

Number of adults in household........... 2

Number of children in household......... 2

Number of cars owned.................... 0[b]

Monthly Income Details[/b]

Monthly income after tax................ 2425

Partners monthly income after tax....... 2980

Benefits................................ 0

Other income............................ 0[b]

Total monthly income.................... 5405[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 1500

Secured/HP loan repayments.............. 0

Rent.................................... 0

Management charge (leasehold property).. 0

Council tax............................. 183

Electricity............................. 177

Gas..................................... 0

Oil..................................... 0

Water rates............................. 29.5

Telephone (land line)................... 0

Mobile phone............................ 24

TV Licence.............................. 13.37

Satellite/Cable TV...................... 89

Internet Services....................... 0

Groceries etc. ......................... 500

Clothing................................ 60

Petrol/diesel........................... 40

Road tax................................ 0

Car Insurance........................... 0

Car maintenance (including MOT)......... 0

Car parking............................. 0

Other travel............................ 0

Childcare/nursery....................... 1285

Other child related expenses............ 0

Medical (prescriptions, dentist etc).... 12.3

Pet insurance/vet bills................. 0

Buildings insurance..................... 13.8

Contents insurance...................... 0

Life assurance ......................... 39

Other insurance......................... 0

Presents (birthday, christmas etc)...... 50

Haircuts................................ 40

Entertainment........................... 150

Holiday................................. 50

Emergency fund.......................... 0[b]

Total monthly expenses.................. 4255.97[/b]

[b]

Assets[/b]

Cash.................................... 18000

House value (Gross)..................... 500000

Shares and bonds........................ 4000

Car(s).................................. 0

Other assets............................ 8000[b]

Total Assets............................ 530000[/b]

[b]

Secured & HP Debts[/b]

Description....................Debt......Monthly...APR

Mortgage...................... 380000...(1500).....1.99[b]

Total secured & HP debts...... 380000....-.........-   [/b]

[b]Unsecured Debts[/b]

Description....................Debt......Monthly...APR[b]

Total unsecured debts..........0.........0.........-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 5,405

Expenses (including HP & secured debts). 4,255.97

Available for debt repayments........... 1,149.03

Monthly UNsecured debt repayments....... 0[b]

Amount left after debt repayments....... 1,149.03[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 530,000

Total HP & Secured debt................. -380,000

Total Unsecured debt.................... -0[b]

Net Assets.............................. 150,000[/b]

[i]Created using the SOA calculator at www.stoozing.com. 

Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]

Sunday88

Just noticed a spelling mistake in my opening post! I meant to say I have a public sector pension, not mortgage! Not able to edit the post so oh well.

Currently dragging through the week until payday on Friday. We both get paid on the 25th of every month but when this falls on the weekend this will be the Friday before. Currently have £53 in the joint account as we've had an expensive month with home insurance fully paid, nursery photos to buy, new glasses and more social events now everything is reopening.
I am selling an old car seat and isofix on FB today so that should be £60 if the man turns up and am also doing some market research for £65 tomorrow.
We buy an asda £400 top up on a gift card every month as my husband gets a small discount through work. I find online shopping once a week easier to meal plan and try to avoid impulse buys but we always end up popping into supermarkets for milk etc. I pay £6 per month for an any time asda delivery pass. I don't actually mind spending a lot on food as we don't manage to get out often with 2 young kids and nice food is important to us. Cutting down the top up shops and avoiding random takeaways when we are tired would be a good achievement to aim for! 

Should be able to have two no spend days until payday on Friday so will see how this goes.

Sunday88

Payday! Itching to make an overpayment but will wait until the 1st as that's when our mortgage payment goes out and I'm a member of the 'making it round down to a 00.00 balance' club. Sold the car seat and should be getting the market research money before then so hoping to make it a bigger overpayment this month.
Plans for this weekend involve a trip to a farm that is already paid for so will just need some money for ice cream/coffee, and a BBQ with friends which I've already ordered all the food and drinks for using the Asda gift card money for the month. So hopefully not a very spendy weekend! 

South_coast

Hello and welcome 😀!

I can't really comment on the figures in your SOA, as I'm a single-person household so all the numbers look terrifying to me, but it does show that you're earning £1150 more each month than you're spending (which is great, btw!). Do you know where that money is going every month? I think it would be useful to track that and work out what's happening to it and whether you could use it more beneficially. I'm assuming this is where the £140 mortgage OP is coming from, but that still potentially leaves £1k unaccounted for, which would make a huge difference wherever you decided to deploy it. 

Best of luck with your plans x

Mortgage_Minimiser

Following as all your numbers look spookily similar to mine except I'm a 1 adult / 1 child household. 

Good look, I'll keep popping back periodically to cheer you on!

MMx

Cornish_mum

Hi and welcome,

We are similar position (similar income, though are kids and now 5&10 and our mortgage is now ~173k we started out at 250k ~ 6 years ago).

One thing I noticed is you aren’t receiving child benefit; the company car might make make it not workable but you might want to increase both your pension contributions as a tax efficient form of saving. We increased our pension contributions so our take-home is just under the higher band tax rate, so as to retain our entitlement to child benefit and deal with our pension shortfall.

Doing can affect remortgaging and locks money away but I am extremely glad we started doing this 5 years ago. (It has brought our forecast retirement date from 2048 down to 2040). 

We increased our pension contributions gradually as our childcare costs dropped and every time we were awarded a pay rise. I also originally wanted to do a 100k plus renovation of our house but our priorities shifted over time (to our kids changing needs and wanting early retirement) and we have put this on hold.

Good luck with your journey
CM

Sunday88

Hi @South_coast! Thanks for pointing that out, £300 goes into my 1.5% savings account and as we've only recently moved in to a house needing a lot of decorative work truthfully a lot disappears on house and garden jobs at the moment! Some more thorough tracking is a good idea. Dread to think what proportion of that is going to B&Q!
Thanks for the good luck messages @Mortgage_Minimiser and @Cornish_mum. Good to know others are paying down big mortgages too. It gave me some sleepless night to start with especially as the proportion of our salaries going on mortgage and childcare combined is about 50% and thats without any overpayments, but hoping as childcare costs go down we can start paying it off faster. Interesting about the child benefit! We started getting it for my first child but then my husband got a payrise over the 60k threshold and paying it back was so complicated I just stopped claiming! I will look into the pension idea though. 

Had a lovely weekend with friends and apart from lunch out at the farm it wasn't too spendy. Spent £50 on a new baby present, a present for the new big brother and some new trainers for DS in the jojo maman bebe sale today but no other spends and got quidco and Lloyd's cashback for £7 👍🏼 
No other spends which isn't bad as it was my day off but had friends and their kids over to play in the garden and make the most of the last sunny day this week - fun and free! 

Sunday88

£15 overpayment with some quidco cashback. Will do another next week after mortgage payment/interest added 

Thriftmaster1973

I'd knock that cable/satallite TV off and I'd cut that mobile bill down straight away.

Thriftmaster1973

Birthdays / Christmas £50, Can you not cut this back to £25/£30?

I have always kept in mind that when your a mortgage free wannabe - the "keeping up with the Jones's" mindset has to go.

The kids need telling about your plan (if they are old enough to understand), they need to understand and be told that there will be pain and things they can't have, but in the long-term you will all reap the benifits whilst others are still on the debt treadmill.

I told my son this would be the case at an early age and it doesn't appear to have done him any harm.