A roof over the Floof's head

Can I join your MFW gang, please?
I have a dream of being mortgage-free by the time I'm 50 - I'm pretty consumed by this idea, to be honest.  The idea of having more financial freedom, and always having a secure  roof over our heads, is just so beguiling!

We were relatively late to buying a house - we bought the house at the age of 37 on a 30 year term - but luckily we bought a cheap but sound little home that we are so happy living in (although it needs some work doing to it). We're aiming to pay the mortgage off in around 7-9 years.  There's just me, my OH, and the floofiest puppy ever, to cater for - a happy little family of three - and we have a quiet, quite simple and fairly frugal lifestyle, with just the one income, so we do need to be careful on the financial front.

The house cost 105,000 with a 10500 deposit, bought from OH's aunt at a discount - it was probably worth £120K at the time.  From day 1, thanks to this website, I knew overpayments were an option and so I started off by overpaying by £100 a month, then increased the OPs at some point (can't remember exactly when) to £200 a month.

We currently owe around 80500 (Natwest Manage my Mortgage has been down for a few days, ugh, so I don't have an exact figure to hand) on a 5 year fix at 3.09%.  Hopefully remortgaging next year will bring the rate down to around 1.5%, if interest rates stay as they are, with the monthly payment being £300 or so.

Today I have paid off the last £900 of some credit card debt (a holiday in September and tickets to Hamilton - cannot wait!) so I feel that, at long last, I am at (almost) zero debt, so it is time to strategise how I am going to get this mortgage GONE.

So, some aims:

  1. Build up an emergency fund of 3 months outgoings (approx 4.5K)
  2. Salary increases to be allocated to mortgage OPs
  3. When re-mortgaging, keep payments as they currently are, so that I am OP by at least £300pm

4. Build up sinking funds pots for annual bills for:
  • Car running costs (insurance, breakdown and road tax January/MOT and servicing March)
  • House maintenance and insurances (house insurance renewal Oct)
  • Dog costs - ongoing costs - grooming, food (he is on expensive raw food) and insurance (May)
  • Holidays 
  • Amazon Prime (April)
  • Medical/dentistry
  • Birthdays and Xmas
Can anyone think of any other sinking funds that might be useful?

However, I have some upcoming costs that I need to account for...  I feel like once I've got these out the way I can focus on building my emergency fund and pots in earnest.

August (end of July pay packet)

Nephew's birthday - £20
Next bill - circa £100
Train tickets for Hamilton £140
Pay off last £70 of personal loan - yay!

September (end of August pay packet)
Holiday spends (1 week UK self catering) - already have 116.40 in a pot towards food, will need £110 for diesel and parking for the week, plus another couple of hundred for eating out and activities)
House insurance ahead of Oct renewal
Possible small op for puppy if his 'bits' don't make an appearance, will cost more than a normal castration, I should imagine 

I will try to put some more into the EF and SF as well as covering the above costs.  

Hopefully getting a handle on my sinking funds and getting an EF in place will give me more clarity about exactly how much extra I can throw at the mortgage.  When I remortgage, I will definitely be looking at mortgages that allow you to make unlimited, small overpayments - something Natwest doesn't seem to make easy.

Thanks for reading!!
 








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Comments

  • South_coast
    South_coast Posts: 4,782
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    Hello and welcome 😀!

    Reading your message made me feel very relieved to have cleared my mortgage, as the Natwest site being down would have brought me out in hives 🤣! You definitely can make small payments with them (I made several a day sometimes), you just need to set them up as a payee on internet banking and then you can send them by faster payment. I haven't got their details any more (and can't remember how I got them in the first place 🤦‍♀️), but if you give them a call or live chat I'm sure they'll be able to help you out x

    Good luck with your plans 😀!
    Mortgage start: £65,495 (March 2016)
    Cleared 🧚‍♀️🧚‍♀️🧚‍♀️!!! In 5 years, 1 month and 29 days
    Total amount repaid: £72,307.03. £1.10 repaid for every £1.00 borrowed

    Finally earning interest instead of paying it!!!
  • Hi @moneyphd. I am also with Natwest and I use Manage my Mortgage to make OPs. I also set up a regular OP which you can do. Good luck with your goals! 
    Aiming to early retire in April 2025 - DC pension currently £335k 
  • moneyphd
    moneyphd Posts: 23
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    Ha ha South_coast and @glass_half_full, thanks for popping by! The website is still down and the stress of it is making my eye twitch.  I usually check every week or so, no idea why really, apart from I get a slight thrill when they update the valuation and the LTV % every so often.
    I'll give the bank a call about setting them up as a payee, not sure if it would make much of a difference overall, but I'd like to pop in a couple of extra quid when I can spare it, just to feel like I'm keeping the momentum up.  I'm used to the regular OP now so it doesn't really feel like I'm paying extra IYSWIM.


  • moneyphd
    moneyphd Posts: 23
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    edited 23 July 2021 at 10:42AM
    SOA:

    [font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

    Household Information[/b]
    Number of adults in household........... 2
    Number of children in household......... 0
    Number of cars owned.................... 1[b]

    Monthly Income Details[/b]
    Monthly income after tax................ 2534.85
    Partners monthly income after tax....... 0
    Benefits................................ 0
    Other income............................ 0[b]
    Total monthly income.................... 2534.85[/b][b]

    Monthly Expense Details[/b]
    Mortgage................................ 403
    Secured/HP loan repayments.............. 0
    Rent.................................... 0
    Management charge (leasehold property).. 0
    Council tax............................. 130
    Electricity............................. 40
    Gas..................................... 40
    Oil..................................... 0
    Water rates............................. 25
    Telephone (land line)................... 0
    Mobile phone............................ 10
    TV Licence.............................. 26.74
    Satellite/Cable TV...................... 67
    Internet Services....................... 0
    Groceries etc. ......................... 300
    Clothing................................ 0
    Petrol/diesel........................... 40
    Road tax................................ 10.42
    Car Insurance........................... 37.5
    Car maintenance (including MOT)......... 42
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 10.59
    Pet insurance/vet bills................. 75.55
    Buildings insurance..................... 12.5
    Contents insurance...................... 0
    Life assurance ......................... 0
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 50
    Haircuts................................ 0
    Entertainment........................... 50
    Holiday................................. 75
    Emergency fund.......................... 17.5
    Lottery................................. 20
    iCloud, ink............................. 4.28
    S&S ISA................................. 25
    Union................................... 21.26
    Amazon Prime............................ 6.67[b]
    Total monthly expenses.................. 1540.01[/b]
    [b]

    Assets[/b]
    Cash.................................... 1200
    House value (Gross)..................... 130000
    Shares and bonds........................ 850
    Car(s).................................. 11000
    Other assets............................ 0[b]
    Total Assets............................ 143050[/b]
    [b]

    Secured & HP Debts[/b]
    Description....................Debt......Monthly...APR
    Mortgage...................... 80500....(403)......3.09[b]
    Total secured & HP debts...... 80500.....-.........-   [/b]

    [b]Unsecured Debts[/b]
    Description....................Debt......Monthly...APR[b]
    Total unsecured debts..........0.........0.........-  [/b]

    [b]
    Monthly Budget Summary[/b]
    Total monthly income.................... 2,534.85
    Expenses (including HP & secured debts). 1,540.01
    Available for debt repayments........... 994.84
    Monthly UNsecured debt repayments....... 0[b]
    Amount left after debt repayments....... 994.84[/b]

    [b]Personal Balance Sheet Summary[/b]
    Total assets (things you own)........... 143,050
    Total HP & Secured debt................. -80,500
    Total Unsecured debt.................... -0[b]
    Net Assets.............................. 62,550[/b]

    [i]Created using the SOA calculator at www.LemonFool.co.uk.
    Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]
  • moneyphd
    moneyphd Posts: 23
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    Sorry, amended SOA to include regular mortgage OP:

    [font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

    Household Information[/b]
    Number of adults in household........... 2
    Number of children in household......... 0
    Number of cars owned.................... 1[b]

    Monthly Income Details[/b]
    Monthly income after tax................ 2534.85
    Partners monthly income after tax....... 0
    Benefits................................ 0
    Other income............................ 0[b]
    Total monthly income.................... 2534.85[/b][b]

    Monthly Expense Details[/b]
    Mortgage................................ 603
    Secured/HP loan repayments.............. 0
    Rent.................................... 0
    Management charge (leasehold property).. 0
    Council tax............................. 130
    Electricity............................. 40
    Gas..................................... 40
    Oil..................................... 0
    Water rates............................. 25
    Telephone (land line)................... 0
    Mobile phone............................ 10
    TV Licence.............................. 26.74
    Satellite/Cable TV...................... 67
    Internet Services....................... 0
    Groceries etc. ......................... 300
    Clothing................................ 0
    Petrol/diesel........................... 40
    Road tax................................ 10.42
    Car Insurance........................... 37.5
    Car maintenance (including MOT)......... 42
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 10.59
    Pet insurance/vet bills................. 75.55
    Buildings insurance..................... 12.5
    Contents insurance...................... 0
    Life assurance ......................... 0
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 50
    Haircuts................................ 0
    Entertainment........................... 50
    Holiday................................. 75
    Emergency fund.......................... 17.5
    Lottery................................. 20
    iCloud, ink............................. 4.28
    S&S ISA................................. 25
    Union................................... 21.26
    Amazon Prime............................ 6.67[b]
    Total monthly expenses.................. 1740.01[/b]
    [b]

    Assets[/b]
    Cash.................................... 1200
    House value (Gross)..................... 130000
    Shares and bonds........................ 850
    Car(s).................................. 11000
    Other assets............................ 0[b]
    Total Assets............................ 143050[/b]
    [b]

    Secured & HP Debts[/b]
    Description....................Debt......Monthly...APR
    Mortgage...................... 80500....(603)......3.09[b]
    Total secured & HP debts...... 80500.....-.........-   [/b]

    [b]Unsecured Debts[/b]
    Description....................Debt......Monthly...APR[b]
    Total unsecured debts..........0.........0.........-  [/b]

    [b]
    Monthly Budget Summary[/b]
    Total monthly income.................... 2,534.85
    Expenses (including HP & secured debts). 1,740.01
    Available for debt repayments........... 794.84
    Monthly UNsecured debt repayments....... 0[b]
    Amount left after debt repayments....... 794.84[/b]

    [b]Personal Balance Sheet Summary[/b]
    Total assets (things you own)........... 143,050
    Total HP & Secured debt................. -80,500
    Total Unsecured debt.................... -0[b]
    Net Assets.............................. 62,550[/b]

    [i]Created using the SOA calculator at www.LemonFool.co.uk.
    Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]
  • Hi there,
    A couple of questions on the SOA. It seems really frugal which is great but have you got all your spends there? For example, you have got zero for haircuts and clothes for both of you? Do you have any incidental costs week by week eg lunches, coffees, bits and pieces etc? Do you keep a spend diary? It might help you to get a more accurate budget. Does the second mortgage payment mean you aim to OP by £200 each month? 

    In terms of the overall timescale, you mention you would like to be mortgage free by 50. What payment would you need to make to achieve this? Is this doable? 

    Hope this is helpful! :smile:

    Aiming to early retire in April 2025 - DC pension currently £335k 
  • moneyphd
    moneyphd Posts: 23
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    Good point about incidental spends.  I spend about £200 a month on these, I should have added it to the SOA in the entertainment pot, perhaps.  I use my 'spending money' on these items, as they are wants not needs, I suppose.   

    I don't go to the hairdresser, my sister does my hair for me, my partner's hair is £14 every 6 weeks, but he has his own small source of income and pays for this himself.  I'm currently losing weight, so I have a whole new wardrobe of the clothes I couldn't previously fit into, so no new clothes will be needed in the short term (apart from a bit of running gear that I bought fron Next that I need to pay off next month).  Also, I'm selling the clothes I don't fit into on Ebay (plus sized clothes seem to sell quite well) so clothes are actually bringing in a bit of money atm.  But long term I should have a pot for clothes, maybe £50pm...?  I'm really not into clothes and am in a job which is smart/casual although I try to dress fairly smartly, so this should be enough.

    I have saved around £500 a month pretty consistently over the past 2-3 years, so I think my budget is as accurate as it can be.  However, I've had quite a spendy year so I've basically spent all my savings: a new car, fitting a new bathroom, last dog's ongoing vet bills, buying the new pup (crazy prices for pups, at the moment, £2K for this one, my last dog cost £350 12 years ago!!), paying off bits and pieces of debt.  Looking at my SOA, I think I can commit to saving £525 per month and continuing to OP £200.
  • Hi @moneyphd,
    Looks like you have a really good handle on your spends and budget! Yes, pets can be really expensive can't they. Good luck with the mortgage OP and look forward to hearing how you progress towards your goal.
    Aiming to early retire in April 2025 - DC pension currently £335k 
  • moneyphd
    moneyphd Posts: 23
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    @glass_half_full - thanks for your support, it is so nice to be able to speak to people about being a MFW, no-one IRL would be as interested in the details of my journey!  My partner is, of course, but he doesn't really need to/want to know the numbers.

    A wish is a goal without a plan, so I've been thinking through how I could go my ten-year plan:

    Mortgage plans

    Currently I OP £200pm, a total payment of £600pm.  I am going to allocate my Oct 21 salary increment to this, bringing it up to £650pm.

    By the time I next remortgage (Oct 2022) I should have around 73K outstanding.

    Based on a today's best interest rate of 1.29%, and an approx house value of 130K (this is probably a bit pessimistic but I want to be realistic in my projections) monthly repayments on a 5 year fix will be £285.  From Oct 22 (another salary increase added) I aim to pay £700pm (an OP of £415pm).

    Hopefully this will hammer down the mortgage without feeling too much of a stretch.  Keeping repayments the same when remortgaging is possibly the best advice I have ever seen given on this forum!

    At some point,  I won't be able to OP to the same level due to the 10% OP limit, but I will just divert what I would have overpaid into savings. I've heard that Nationwide allow you to OP at the original mortgage level, so I will explore their products as an option, for sure.  

    By Oct 2027, the amount outstanding will be approx £35K.  I will aim to pay off £10k from savings to remortgage for 25K on a two year fix, with the aim of paying off the last £20K completely at the end of the fix - so my MF date would be October 2029.  Feels a long time off, but not as long as my original mortgage term, 2047!!  

    Savings plan

    For this to work, I need to save £30K alongside OPing over the next 8 years - £312.50 per month.  This feels a lot!  I think it is doable if work/life remains stable (yeah right, like life is predictable and safe!).  But, I'm going to think positively.  If I keep furnishing my sinking funds, then the £525 I'm going to put aside monthly will cover this, with some to spare for emergencies/ unanticipated spends.  
  • moneyphd said:

    Train tickets for Hamilton £140

    Coach tickets are a fraction of the cost of train tickets, you could save quite a bit here I think...?
    • Mortgage over-payments to date: = £16,746
    • Original redemption date: August 2043
    • Current redemption date: July 2041
    • Debt: £15,930
    • Savings: £12,430
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