Big mortgage - Big dreams

Hi everybody. 

New to this group after a long stint when I was successfully working to become debt free, something I finally achieved earlier this year.

After debt-free wannabe, this feels like the grown ups board!

My current situation is that I have an interest free mortgage of around £300k, and am currently on a long term fixed deal at 1.94% (£488/month), which expires in January 2024.  I am able to overpay up to 10% per annum without penalty but to take out a new mortgage or change my deal would cost around £7k.  The mortgage is due to finish in May 2028 so I need to clear it by then.  I have decent savings and a good pension pot and the house is worth a lot more than the mortgage so I am in OK shape but would love to pay it off if at all possible and don't want to trash too much of my pension to clear the mortgage, particularly as i will hopefully still be working in 2028 so could get hit with a lot of tax.  By my calculations, that means finding around £3,800 per month until 2028 which might be difficult!  However if I could save £1,900 per month, I could pay off around £22k per year and then use my remaining savings to clear the balance without having to touch the pension.

Savings are held in a mixture of ISA's, Premium Bonds, shares and crypto and yield has been around 10% per year over the last couple of years.  They would be more than enough to cover me for 12 months without working.  Both my wife and i are in full time employment currently and have no plans to stop until mortgage is cleared.

I have become pretty good at saving through debt-free wannabe so am confident about not wasting money.  My thoughts as to how I might be able to clear this damn thing are as follows;

  • I have a reasonable amount of spare time.  Is there an additional income stream I can create that will bring in an additional £1,000 per month?
  • How easy would it be to extend my mortgage deal by a couple of years once the fixed deal comes to an end in Jan 2024 as I plan to continue working until December 2030.  That would give me more time to clear it, which would be nice.
  • Should I consider grabbing a mortgage deal now at a lower rate as 1.94% is not that competitive?  How easy would that be (my credit rating is 999).
  • Is there anything I should be doing that i am not?

All thoughts welcome.  I plan to try and check in regularly and update as I found regular posting very helpful in clearing my debt.


ZD












Debt free - achieved Jan 2021

Mortgage free wannabe - started 15/10/21

"No man is a failure who has friends"

Comments

  • South_coast
    South_coast Forumite Posts: 4,533
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    Welcome! No real thoughts from me (except for congratulating myself that I also worked out you need to pay off around £3.8k/month to clear it in time - maths is not my strong point 🤣!), but just wanted to say a massive well done on getting debt free! I'm not sure switching to a lower rate would be worth it though, 1.94% is still pretty good and you'd probably have to pay exit fees to switch early? 
    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!!!
  • happymum37
    happymum37 Forumite Posts: 299
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    Sorry I'm not familiar with interest only mortgages.  But for long term quality of life I would be tempted to fling everything apart from my pension at the mortgage.  All savings, the lot. And then as soon as that's cleared focus 100% of my attention on my savings.  Good luck 
    SAHM till 2021. Part time worker.
    Aims- mortgage free by 2027 - DONE APRIL '23                                   &
     Plug that SAHM pension gap & Retire in style in 20 years. 
  • kaycastle
    kaycastle Forumite Posts: 343
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    Well done on becoming debt free!! I always like reading the big mortgage threads
  • Zulu_Dawn
    Zulu_Dawn Forumite Posts: 282
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    kaycastle said:
    Well done on becoming debt free!! I always like reading the big mortgage threads
    "Big mortgage".  Ooh don't say that.  I'll start to panic.   

    Thank you.  Debt free was a big deal.  It was not far off the size of my mortgage and took 15 years.  Still, I learnt so much and am in a much better place as I move on to the mortgage.

    So it's been a good few days.  A short trip to York to watch my wife run the Yorkshire Marathon and then a few extra days in the Howardian Hills to recuperate.  I've been doing some research on Ebay, looking at things I could possibly buy and sell at a profit.  I've decided that you can pretty much sell anything so after reading an article about decluttering, I thought it might be good to start selling the 30 years of accumulated detritus that is sitting around the house and filling up cupboards, the loft and the garage.  I have the important asset of time and so if I can use that wisely, I believe that will be the key to a tidier house and a mortgage free future!


    Debt free - achieved Jan 2021

    Mortgage free wannabe - started 15/10/21

    "No man is a failure who has friends"
  • Zulu_Dawn
    Zulu_Dawn Forumite Posts: 282
    Part of the Furniture 100 Posts Combo Breaker
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    Sorry I'm not familiar with interest only mortgages.  But for long term quality of life I would be tempted to fling everything apart from my pension at the mortgage.  All savings, the lot. And then as soon as that's cleared focus 100% of my attention on my savings.  Good luck 
    Thanks.  I am only allowed to pay up to 10% of my mortgage each year without penalty so that is my plan for the next three years at least.  Not sure I will be able to pay £30k this year  without some additional income but I'm hoping to pay off about £15k.  Then the goal is to do the 10% for 2022 and 2023 so by the time I come to renegotiate terms, it will be down to around £235k and this will make it easier to get a better deal.
    Debt free - achieved Jan 2021

    Mortgage free wannabe - started 15/10/21

    "No man is a failure who has friends"
  • Zulu_Dawn
    Zulu_Dawn Forumite Posts: 282
    Part of the Furniture 100 Posts Combo Breaker
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    So I decided to check out Ebay to see what i could sell and how I might raise some money for the mortgage.  One hour later and I've spent £3.50 on some old cigarette cards and bid on nearly £100 worth of other stuff for my various collections!  Not going well.
    Debt free - achieved Jan 2021

    Mortgage free wannabe - started 15/10/21

    "No man is a failure who has friends"
  • LadyWithAPlan
    LadyWithAPlan Forumite Posts: 1,460
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    Yes I think a rule of only selling on ebay might be worth it for a month, and onlu spend what you have put away as 'treat money' 
    Do you both work off a tight budget? As a bit more sacrifice now on both extra income and less spending will pay dividends.
    I currently have what feels like a high monthly savings goal and somehow I seem to be reaching it or nearly there most months so maybe a fresh look at your budget to see if you can hit 80% or something of this years 10% OP.
     I am choosing to be frugal to support some fabulous life changing and affirming financial goals

    DON'T BUY STUFF (from Frugalwoods)
    No seriously, just don’t buy things. 99% of our success with our savings rate is attributed to the fact that we don’t buy things. You can’t really hack your way to frugal. You can and should take advantage of discounts, coupons, rewards points, and the like. But at the end of the day, the only way to truly save money is to not buy stuff.    Money doesn’t walk out of your wallet on its own accord.

    Per month  - Dec 23 SPEND/SAVE
    Track my Grocery spending  0/£200    grocery +   £24.29/£100bulk 
    Track what I save in my hse deposit  Dec £20.69/£980.69
    Cashflow EF  £0/£2000  - used it for spending this weekend
    Track extra income from ebay/free money/refunds etc    £155.86 (dec 6th)
    December Voluntary Spending   £112.80

    My Dec streaks to track
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