Prosperous soul embraces creativity & mortgage neutrality

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Today I completed on my biggest ever mortgage - £202K and switched from interest only between 2 of us to repayment on my own. I took the term for as long as I could - so 22 years - which means I would be 73.5 by the time I was actually free. There has to be a better way!

Financial info:
  • Currently have c£1479 left to clear off CCs but they are both at 0% and I am debt neutral due to EF.
  • EF of c£2K and am trying to keep it that way and grow it - but the next few months I have big car bills so may not be totally possible. 
  • I am trying to be debt neutral currently rather than debt free - as my recurring nightmare is losing my job and being unable to pay such a big mortgage. 
  • My job is pretty secure with reasonable pay, great sick pay coverage, redundancy pay and a DB pension so while I want a bigger EF and it is a high priority for me it is not as essential as it would be for some.
  • My monthly mortgage payment used to be £130 and is now just over £800 more!!
  • It's a 5 year fixed rate at 1.84%. It has hefty ERCs but I can theoretically pay up to 10% a year without penalty.
  • Freshly divorced after a very long marriage - this is my first month of paying previously joint bills on my own - so doable but also a challenge as I am used to a second lot of money coming in part month which won't be there.
  • Thankfully the new mortgage payment comes out next payday not this so I have time to clear remaining divorce related bills.
  • I have healthy life insurance cover for my kids (age 18 and 23) - and am in the process of transferring a joint life policy into my sole name and making sure it is set up as a trust.
  • I am in the process of doing a new will.
  • My 18 year old DD is an apprentice and is partly at home and partly away with work. My DS is living away.
Mortgage neutrality:
  • Even if I repaid as small a figure as £20 pcm - over the term that would reduce my mortgage by 6 months - taking me to 73 instead of 73.5!! My current debate is whether to pay it directly off the mortgage (certainty) or do it via pension - so get 25% uplift.
  • By age 55 I will have accrued full state pension and should be able to get it at 67. (I have checked multiple times).
  • As I am only 3.5 years away from being able to access a pension (if desired) - I am seeing a SIPP (self invested pension) or equivalent - as the most likely route to mortgage freedom. I have one valued at £3,643 yesterday - so a long way to go before it's of much use!
  • I had to give Ex half of one of my earlier DB pensions - but that still left a CETV of over £180K. If I can transfer that in a few years time - while I would want to leave it there and grow it on while I am earning - it would give me some reassurance of a 25% tax free lump sum to help repay the mortgage when I need it. This would knock circa 5 years off the mortgage which would take it down to normal retirement age at least. If I can't transfer it - it is due to pay £3 or 4K at age 65.
  • I have a second DB CARE pension that is currently due to pay out c£9K p.a. from age 67 - or if I stayed all the way until then - closer to £25k.
  • If I was mortgage free I would need around £26K gross to live on I reckon. So if I retire at age 67 I should be more than covered and probably financially better off than I am now - given I pay 8.5% into my work pension currently and have a hefty mortgage and life insurance premiums.
  • The question is how much earlier can I 'retire' achieve 'financial independence' so I can pursue my creative side more fully.
Achieve FIRE/Mortgage Neutrality by mid 2030
1) MFW Nov 21 £201,999 with 236 payments to go - now £183,036 Equity 26.8%
2) Spend on handyman & external building works & new patio door £12.65K
3) CC £4.6K on 0% spends card but offset by £33.8K savings (part EF, part future home improvement)
4) Mortgage neutral by June 2030 AVC £10.2K/£127.5K AVC target 8% value at 15/5
5) FI Age 60 annual income target £13.7/30K 45.7%
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