happihorse's journey to mortgage freedom and contentment…
happihorse
Forumite 182 Posts
I have been a long-term lurker on these boards for many
years but, as we move into a new year, I have decided to start a diary to help
me record my thoughts, plan and monitor my progress around my mortgage free journey,
as well as some other important goals and ambitions. I am hoping that this diary will keep me
accountable and on-track and some friendly and more experienced people might join
me on my journey and offer some advice and support to keep me on track.
So, a bit about me…
I turned 40 a few months ago and, around the same time, moved from my first-time buyer home to somewhere I hope to be for a very long time. The new house is in a great location, has plenty of space and opportunities to make it my own. However, it was a huge step up in terms of purchase cost and meant that I took out a £290,000 mortgage to buy it. I am a single woman (plus pooch) so it feels like a big commitment and I am keen to pay the mortgage down as soon as possible.
So, my goals and ambitions…
I feel like I have lost my way a little over the last couple of years so I would like to use the next few months to get back on track. I also have some longer-term ambitions and shorter-term goals to help me get there.
First up (and the primary motivation for this diary) is to be mortgage free within 10 years (and possibly retire in 15 years). My mortgage term is 25 years and the standard payment is currently £1,105 per month (based on an interest rate of 1.09%) so it’s going to be a huge challenge but I am raring to go and determined to do it.
My other goals (many of which are interlinked) include:
- getting healthier, fitter and losing weight – this is a big one and something that I have really lost my way on over the last couple of years and, as a result, I have a huge amount of weight to lose;
- establishing a better work/life balance – I have a desk-based job which I do enjoy but is quite stressful and high-pressured and I have a tendency to work harder and harder when things go wrong (at the expense of my personal life);
- get back into horse riding – this is my life-long passion but, due to my weight-gain, I haven’t been able to do this for some time now and I am desperate to get back to it;
- being less wasteful (particularly with money but across other areas of my life too) – making more of the resources and opportunities available to me; and
- making my new house the home I want it to be – the house is a fairly new-build and quite a blank canvas (which I love) so I have plenty of opportunities to make it my own, inside and out.
Welcome to my journey and please do say ‘hi’ – any constructive advice and support would be gratefully received!
So, a bit about me…
I turned 40 a few months ago and, around the same time, moved from my first-time buyer home to somewhere I hope to be for a very long time. The new house is in a great location, has plenty of space and opportunities to make it my own. However, it was a huge step up in terms of purchase cost and meant that I took out a £290,000 mortgage to buy it. I am a single woman (plus pooch) so it feels like a big commitment and I am keen to pay the mortgage down as soon as possible.
So, my goals and ambitions…
I feel like I have lost my way a little over the last couple of years so I would like to use the next few months to get back on track. I also have some longer-term ambitions and shorter-term goals to help me get there.
First up (and the primary motivation for this diary) is to be mortgage free within 10 years (and possibly retire in 15 years). My mortgage term is 25 years and the standard payment is currently £1,105 per month (based on an interest rate of 1.09%) so it’s going to be a huge challenge but I am raring to go and determined to do it.
My other goals (many of which are interlinked) include:
- getting healthier, fitter and losing weight – this is a big one and something that I have really lost my way on over the last couple of years and, as a result, I have a huge amount of weight to lose;
- establishing a better work/life balance – I have a desk-based job which I do enjoy but is quite stressful and high-pressured and I have a tendency to work harder and harder when things go wrong (at the expense of my personal life);
- get back into horse riding – this is my life-long passion but, due to my weight-gain, I haven’t been able to do this for some time now and I am desperate to get back to it;
- being less wasteful (particularly with money but across other areas of my life too) – making more of the resources and opportunities available to me; and
- making my new house the home I want it to be – the house is a fairly new-build and quite a blank canvas (which I love) so I have plenty of opportunities to make it my own, inside and out.
Welcome to my journey and please do say ‘hi’ – any constructive advice and support would be gratefully received!
4
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This is something I can definitely relate to, and in my own experience it's never worth it. There have been so many times when I've found myself caught in the tunnel vision thinking of "If I can just....then...." It's a really tricky one to snap out of, so particular good luck to you with this!
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!!!
I earn a decent amount (I think) but it is fairly limited in terms of overtime or additional earning opportunities.
To purchase this house, I took on a £290,000 mortgage over 25 years with 1.09% interest rate. The standard monthly payments are £1,105 but I am currently overpaying by £895 per month. This is a huge overpayment for me and leaves me with about £1,100 per month for everything else so I am not sure if this will be sustainable. At this rate, I will be mortgage free in about 12.5 years (because I also made a one-off overpayment of £15,000 from some savings I had). To hit my target of mortgage freedom in 10 years I therefore need to find additional one-off overpayments totalling circa £60k.
I do have some money in savings – about £33k at present. This is an emergency fund plus some money to replace my car (which I am hoping to do in the next few months).
I do get an annual bonus (although this isn’t guaranteed and the amount is variable) but it should help to make up the shortfall on my mortgage free goal over the next decade.
Aside from that, I need to look at my day to day finances in more detail over the next week or 2. Having only moved recently, I need to have another look at utilities, insurances and other household bills to make sure I am being as economical as possible (whilst still living and enjoying life). Food shopping is another area that I need to look at – I know I am spending a ridiculous amount on this at present, buying far too many processed and ready-made foods which also needs to be reined in to help with my health and wellbeing goals.
I’ll leave it there for today but will be back over the next couple of days with more on my ambitions and goals and how I plan to get there. In the meantime, may I wish everyone a very happy, healthy and prosperous new year!
I am a bit of a perfectionist and have tended to go for the big-bang changes previously but found them to be unsustainable because they are so drastic. I do, however, need to see results to maintain my motivation so I need to achieve a careful balance between the 2 extremes.
I feel like I have a reasonable plan in terms of paying off the mortgage and need to see how my current overpayment arrangement works out and whether I can manage on the remaining money each month. It’s a decent overpayment so will see how that goes before I change anything else towards this goal. In time, I am hoping that some of my other ambitious will also help me to realise benefits towards paying down the mortgage too.
So, in terms of my other goals...
The biggest, most important and urgent is getting healthier, fitter and losing weight. I am going to achieve this by:
- doing at least 10,000 steps and 60 active minutes each day (measured on my Fitbit); and
- going on a structured diet to re-set my eating habits for good.
I live in a beautiful area with lots of country walks on my doorstep and have a dog who loves being out and about so I have no excuse. I often hit these targets on non-working days but it’s hard when I am stuck at my desk. My aim is to get our first thing and do the bulk of the exercise then, before I start work.
I need to mull over diet options in a bit more detail. I have done some very extreme diets previously and had some fantastic results but fell off the wagon because the diet was unsustainable. I need to find a better balance here and plan to start this properly over the weekend.
This needs to be a long-term goal (due to the amount of weight I must lose) but something I must get sorted before it impacts on my health more seriously.
I need to be more structured with my day to help me establish a better work/life balance. Doing a decent early morning walk will help with this and my target is to finish work at 6pm latest each day with a maximum of one later night per week.
Horse riding is on the back burner for now but, once I have weighed in, I will be able to create a realistic plan for how much weight I need to lose (and time) until I can re-start in some form.
Being less wasteful is another biggie. I need to do some work around budgeting and money management to help cut down on frivolous spends. Take away coffees and fast food is a big weakness, as well as impulse buys and lots of short random car journeys popping out and about. I would also like to be a bit more considered in how I spend my money and other resources.
Making my new house the home I want it to be is another longer-term goal and something that I will focus on once I have started to address some of the other areas above.
Mortgage:
- Starting balance £289,980.00
- Current outstanding balance £270,663.92
- Amount repaid £19,316.08 (6.7%)
Savings £33,000
Credit card debt nil
Spending hasn't been quite so good - popped out for some shopping and got a few bits. Then came home and bought a couple of things online. Wellies (which are much needed as my old ones are making my feet sore) and a wine stopper (not necessary at all, particularly as I have given up drinking for a while).
Plan for the week is to do an hour's walk each morning before I start work (to get my steps and active minutes) and make the food that I have in last until the weekend (which shouldn't be too difficult and will help with the waistline too).
Money is a bit tight at the moment. I will go into my overdraft tomorrow when some bills come out so debating whether or not the take £500 out of savings to tide me over until payday (at the end of the month). My savings are in Premium Bonds so I am a bit reluctant to take it out because it's a bit of a pain to do and I miss a month on the draw for any that I put back in.
Mortgage start: £356,000 - December 2019 £345,052 - December 2020 £331,976 December 2021
Overpayments 2020: £1550
Overpayments 2021: £3550/£3450
MFW 2022 #48 progress: £3400/£6000
At the moment you are throwing £900 (after tax) at your mortgage. Are you able to throw this at your pension instead?
If you threw it at your pension, (assuming it is a defined contribution scheme), you would benefit from tax savings via salary sacrifice and hopefully see a 5-8% growth per year. When you retire, you can take a tax free lump sum (25% of pot) and pay off the mortgage.
Far more financially savvy?