My plan - comments welcome/requested!

xepija8686 · 27 March 2022 at 6:14PM

Hi,

I am almost five years into buying my first home, which was financed by a deposit, a five year fixed 35 year mortgage, and a 20% Help to Buy Equity element.

During this time I have been saving and overpaying my mortgage as fast as I can. Recently running the forecast I am aiming to be debt free in just over a year.

My plan is quite aggressive, and has been the result of living as frugally as possible, and working as hard as I can to maximise my income:

August 2017 - house purchased
Student loans £17k (originally £22k)
Mortgage £193k
Help to buy equity £53k
Total debt £263k

March 2022 - today
Student loans £0
Mortgage £95k - maxed out overpayments
Help to buy equity £50k - house price fell

Total debt £145k

Plan at end of fixed term
I plan to put all my savings except for £10k against the Help to buy, and then the mortgage at the end of the fixed period.

This will leave me with a mortgage of £45k at the end of the fixed period.

I can then pay all available cash against this for around 10 months, and then be debt free.

What is everyone’s view of this plan. I guess the risk is that I’m liquidating all of my investments and will only have £10k cash.

I plan to leave the mortgage on the variable rate and not remortgage to avoid the costs and inflexibility of remortgage. Meaning I will be on a higher 4.5% rate, but I think works out as a saving overall.

kimwp · 27 March 2022 at 9:54PM

I think this would be better in the mortgage free wannabe board.

I focussed on paying off my mortgage and in retrospect, putting some of that money into pension AVCs would have been a good idea. However focussing on the mortgage meant I didn't have that to worry about during the pandemic.

I keep enough cash to cover my normal outgoings for a year, figuring that I could cut back if I lost my job and that would then cover emergency spend eg breakdown of washing machine. When I had a mortgage, that obviously included a year's worth of mortgage payments.