50k in 5 years

Morning all, well it's been a while.  In fact, it's been so long that my old thread has been closed:( 

I have been on MSE for ages but haven't posted in a long time.  Since then our financial, health, family and general situation has changed a lot so I thought it was time for a new start.  

We took our mortgage out in 2006 and it was for 30 years, which we knew was always going to be too long for us.  We have overpaid as an when we have been able to and now have just over 50k owing. The original date for finishing paying was June 2036, we have changed mortgages and providers over the years to chase better rates and deals, meaning the MF date currently on the existing mortgage would have been January 2031.  For me that's still too long so the new plan is to move to a fixed rate next month, reduce the term to 8years, which will give us a monthly payment the same as we pay now, then overpay by between 3-4k per year to have us MF by September 2026.

I'd be interested to have anyone's input, questions and ideas, and am going to use this thread as a bit of a log of where we are at and how the journey is going.

Xx
«1

Comments

  • ecoelle
    ecoelle Posts: 1,585
    First Post Name Dropper First Anniversary Combo Breaker
    Forumite

    Statement of Affairs & Personal Balance Sheet

    Summary

    Monthly Budget SummaryAmount(£)
    Total monthly income2,357
    Monthly expenses (incl. HP & secured loans)2,303
    Available for debt repayments54
    UNsecured debt repayments0
    Amount left after debt repayments54

    Personal Balance Sheet SummaryAmount(£)
    Total Assets (things you own)211,000
    Total Secured & HP Debt-51,000
    Total Unsecured Debt-0
    Net Assets160,000

    Household Information

    Number of adults in household2
    Number of children in household1
    Number of cars owned0

    Income, Expense, Debt & Asset Details

    IncomeAmount(£)
    Monthly income after tax341
    Partners monthly income2016
    Benefits0
    Other income0
    Total monthly income2357

    ExpensesAmount(£)
    Mortgage620
    Secured/HP loan payments0
    Rent0
    Management charge (leasehold property)0
    Council tax127
    Electricity100
    Gas90
    Oil0
    Water Rates40
    Telephone (land line)0
    Mobile phone52
    TV Licence20
    Satellite/Cable TV11
    Internet services32
    Groceries etc.300
    Clothing60
    Petrol/diesel0
    Road tax0
    Car Insurance0
    Car maintenance (including MOT)0
    Car Parking0
    Other travel50
    Childcare/nursery0
    Other child related expenses0
    Medical (prescriptions, dentists, opticians etc.)40
    Pet Insurance/Vet bills56
    Buildings Insurance15
    Contents Insurance15
    Life Assurance63
    Other Insurance59
    Presents (birthday, christmas etc.)100
    Haircuts10
    Entertainment60
    Holiday150
    Emergency Fund30
    Dram Club30
    Disneyland10
    Sofa10
    Disney Plus10
    Scout camp10
    School trips20
    Work food50
    Lottery10
    Online Maths9
    Contact Lenses16
    Tumble Dryer Insurance3
    Dental Care16
    Scouts9
    Total monthly expenses2303

    Secured & HP Debt DescriptionDebt(£)Monthly(£)APR(%)
    Mortgage51000(620)3.69
    Secured & HP Debt totals51000--

    Unsecured Debt DescriptionDebt(£)Monthly(£)APR(%)
    Unsecured Debt totals00-

    Asset DescriptionValue (£)
    Cash29000
    House Value (Gross)180000
    Shares and bonds0
    Car(s)0
    Other assets (e.g. endowments, jewellery etc)2000
    Total Assets211000

    Comments on the results

    You have sufficient monthly income to meet your expenses and your minimum monthly debt repayments with £54 left over. You can use this to pay off your debts more quickly or to build/top-up an emergency fund. Whatever your results show, it always pays to seek advice or comments from others. Why not post your SOA details on our Debt Management discussion board or on your preferred discussion forum elsewhere. Thankyou for using the SOA Calculator at www.LemonFool.co.uk
  • LadyWithAPlan
    LadyWithAPlan Posts: 1,975
    First Post First Anniversary Name Dropper
    Forumite
    edited 4 September 2022 at 10:21AM
    What a lovely shiny new diary!

     You seem pretty on it and I can see there are lots of clubs and kids costs etc that all add up and I can appreciate you think that important. 
    I only worry if cost of living goes up  further as now it’s a tight budget but workable. Obviously gas and electric is super high - and might get worse - are you on a fixed rate there ? 

     My main thought is maybe you could pull in some extra side income such as surveys, eBay etc and put that all as extra OPs as £54 extra a month is not much room 

    Or could you choose to pause or lower some of the spends and saving pots temporarily eg holiday and gifts to either beef up your EF or get these OPs done faster. 
    I know it’s a balance between having a happy family time whilst your child is young  and being free in your 5 year MFW time scale as once you have no mortgage everything will be easier 

    I assume you both have a pension as it’s important that as SAHM you look at this - too many women (you might be a man but same issue applies  ) - sahm have tiny pensions in later life cos they don’t look at this as too busy looking after the home, kids and often elderly relatives

    I don’t know much about voluntary class 2 contributions but figure as a carer of a child you get some pension credit for that ? Someone on here will know 

    I do know you can even put money in to a SIPP as below a basic tax rate and get the hmrc uplift 
    I suggest Vanguard SIPP - you can literally put in £5 at a time 

    from hmrc website On under £3600 a year earnings 

    f you have no relevant UK earnings or earn less than £3,600 a year, you can still contribute to a personal pension which uses the relief at source method. And you’ll qualify to have tax relief added to your contributions up to a certain amount.

    If you’re in a workplace pension, you’ll need to check the type of pension you have with your employer or pension provider.

    The maximum you can contribute is £2,880 a year.

    Tax relief is added to your contribution so if you contribute £2,880, £720 is claimed from the government and added to your pension. This means a total of £3,600 will be contributed into your pension scheme. 


    There will always be a (beautiful stilettoed) foot in fabulous in LaPlan's life.
    I am choosing to be fabulously frugal to support some wonderful life changing and affirming financial goals including buying a London home I love.

    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.

    My Feb streaks to track
    Track Minimalist game  items (Nov 310)   (Dec  95)  (Jan 90)   Feb 38 to 6th Feb 
    Exercise streak  4 
    YNAB days:: Target 50 days -Age of money 42 
    Track my NSD's - Target 13 days/ 1/13

    https://forums.moneysavingexpert.com/discussion/6289577/future-proofing-my-life-deposit-saving-then-mfw-journey-in-under-13-years#latest
  • killerpeaty
    killerpeaty Posts: 2,605
    First Anniversary Name Dropper First Post
    Forumite
    Happy new diary!

    Work food seems quite high, obviously you do have the room to spend it though. 

    I look forward to seeing you progress
  • ecoelle
    ecoelle Posts: 1,585
    First Post Name Dropper First Anniversary Combo Breaker
    Forumite
    What a lovely shiny new diary!

     You seem pretty on it and I can see there are lots of clubs and kids costs etc that all add up and I can appreciate you think that important. 
    I only worry if cost of living goes up  further as now it’s a tight budget but workable. Obviously gas and electric is super high - and might get worse - are you on a fixed rate there ? 

    We are on a fixed rate until May 2024, thankfully, at the moment we are building credit for the winter.

     My main thought is maybe you could pull in some extra side income such as surveys, eBay etc and put that all as extra OPs as £54 extra a month is not much room 

    Excellent ideas, I already do surveys and find Attapoll quite good, also curious Cat, Streetbees, Appinio, Weare8.  I use Shoppix, Huyu, Amzon Shopper Panel and Snap my eats to build up paypal cash and vouchers which we use for things we need or transfer into the OP pot.  We have £3000 saved to pay off as an immediate OP once the new mortgage is signed.  Then our aim is to pay off at least £4K per year from 2024.  we have a lot of this saved already but with cost of living as it is we don't want to have no cash savings on hand.

    Or could you choose to pause or lower some of the spends and saving pots temporarily eg holiday and gifts to either beef up your EF or get these OPs done faster. 
    I know it’s a balance between having a happy family time whilst your child is young  and being free in your 5 year MFW time scale as once you have no mortgage everything will be easier 

    I assume you both have a pension as it’s important that as SAHM you look at this - too many women (you might be a man but same issue applies  ) - sahm have tiny pensions in later life cos they don’t look at this as too busy looking after the home, kids and often elderly relatives

    I don't think I have a current pension, I do have an old pension from when I worked in retail and also a few years of a teacher pension, I'm looking into voluntary contributions this week as I'm not sure where we stand.  I have a long term health condition which is very unpredictable and I cannot work full time because of it,  we chose for me to work on a supply basis as it means when I am able to work more I can and when I am having a bout of my illness I can take time to get well again.  It also means we have no childcare costs as my work is term time only and I am able to drop off and pick up from school each day.  

    I don’t know much about voluntary class 2 contributions but figure as a carer of a child you get some pension credit for that ? Someone on here will know 

    I do know you can even put money in to a SIPP as below a basic tax rate and get the hmrc uplift 
    I suggest Vanguard SIPP - you can literally put in £5 at a time 

    from hmrc website On under £3600 a year earnings

    f you have no relevant UK earnings or earn less than £3,600 a year, you can still contribute to a personal pension which uses the relief at source method. And you’ll qualify to have tax relief added to your contributions up to a certain amount.

    If you’re in a workplace pension, you’ll need to check the type of pension you have with your employer or pension provider.

    The maximum you can contribute is £2,880 a year.

    Tax relief is added to your contribution so if you contribute £2,880, £720 is claimed from the government and added to your pension. This means a total of £3,600 will be contributed into your pension scheme. 


    Hi, I've added some notes, I posted the SOA earlier and didn't really explain our circumstances,  as a couple we both have variable monthly income.  My OH works in retail and gets a basic salary plus commission, obviously this can mean some months we get more money than others, I also work variable hours as I work in a school on a supply basis.  this month I will receive no pay at all as it has been the 6 week holidays and so I have not worked at all.  Other months I can earn upto maybe £800 so I just calculated our average based on the last 6 months and used that as our income on the SOA.  I know we can survive on this amount so plan to put anything over these amounts into the OP pot each month.  We do our mortgage OP annually so if we need to pull money out throughout the year it isn't an issue.
  • Not sure if you would consider this but I recommend applying for universal credit. It may help with your variable income and you may find you're entitled to help when your earnings are lower certain months. Also you may be entitled to the government support which keeps being offered, cost of living help etc.
    Mortgage start date Nov 2014  - £90,545 over 25 years
    Re-mortgage Oct 2017 - 78,295 over 23 years
    Re-mortgage Jan 2020 - 55,000 over 26 years @ 1.94%
    Current Mortgage Outstanding Middle December 2020 - £
    47893.35 - a reduction of £42,652 in just over 6 years!  


  • ecoelle
    ecoelle Posts: 1,585
    First Post Name Dropper First Anniversary Combo Breaker
    Forumite
    Not sure if you would consider this but I recommend applying for universal credit. It may help with your variable income and you may find you're entitled to help when your earnings are lower certain months. Also you may be entitled to the government support which keeps being offered, cost of living help etc.
    Hi, because we have savings we don't qualify for any help as far as I know.  I've checked a few of the different calculators and they all say the same.  Thanks for commenting though x
  • Ah the joys of variable income, I am freelance myself so appreciate the need for a larger EF 
    It does mean like you I am on my budget harder as I can’t assume money coming in on time 
    There will always be a (beautiful stilettoed) foot in fabulous in LaPlan's life.
    I am choosing to be fabulously frugal to support some wonderful life changing and affirming financial goals including buying a London home I love.

    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.

    My Feb streaks to track
    Track Minimalist game  items (Nov 310)   (Dec  95)  (Jan 90)   Feb 38 to 6th Feb 
    Exercise streak  4 
    YNAB days:: Target 50 days -Age of money 42 
    Track my NSD's - Target 13 days/ 1/13

    https://forums.moneysavingexpert.com/discussion/6289577/future-proofing-my-life-deposit-saving-then-mfw-journey-in-under-13-years#latest
  • ecoelle
    ecoelle Posts: 1,585
    First Post Name Dropper First Anniversary Combo Breaker
    Forumite
    Ah the joys of variable income, I am freelance myself so appreciate the need for a larger EF 
    It does mean like you I am on my budget harder as I can’t assume money coming in on time 
    Yes, I want the flexibility but that comes with uncertainty.  We just try and budget for the worst case scenario and then any extra we get is a bonus.

    Today we are meeting the mortgage advisor to discuss switching out deal, hoping to avoid the predicted interest rates rise.
  • L9XSS
    L9XSS Posts: 438
    First Anniversary Mortgage-free Glee! Name Dropper First Post
    Forumite
    edited 6 September 2022 at 11:11AM
    Hi. Good luck on your journey to becoming mortgage free. Your timeline is excellent and with perseverance it will happen! Might sound odd but your cash savings are pretty high. Could you utilise some of this to “support pension provision”? I took this route with some savings moving them into a SIPP, benefitting from the 20% HMRC uplift then at 55 years of age taking a small tax free lump sum that virtually overpaid my mortgage. I continued to overpay from my salary from years 45 to 55. I’m now continuing to bolster my pension as im now mortgage free for the next 5 years. Just my tuppence.
  • ecoelle
    ecoelle Posts: 1,585
    First Post Name Dropper First Anniversary Combo Breaker
    Forumite
    L9XSS said:
    Hi. Good luck on your journey to becoming mortgage free. Your timeline is excellent and with perseverance it will happen! Might sound odd but your cash savings are pretty high. Could you utilise some of this to “support pension provision”? I took this route with some savings moving them into a SIPP, benefitting from the 20% HMRC uplift then at 55 years of age taking a small tax free lump sum that virtually overpaid my mortgage. I continued to overpay from my salary from years 45 to 55. I’m now continuing to bolster my pension as im now mortgage free for the next 5 years. Just my tuppence.
    Hi, I yanks for commenting.  The cash savings are a mixture of things, some is money put away for emergencies, some is in Monzo pots for yearly bills, we save a set amount each month for these, some is our child benefit which we have saved since having our LO, it is picked away in a fixed rate for another 12 months (ish) and some is money which I have to keep to one side in case of a tax bill.  It looks like we have a lot of cash, which we do, but a lot is already allocated if that makes sense.
Meet your Ambassadors

Categories

  • All Categories
  • 341.6K Banking & Borrowing
  • 249.7K Reduce Debt & Boost Income
  • 449K Spending & Discounts
  • 233.5K Work, Benefits & Business
  • 605.8K Mortgages, Homes & Bills
  • 172.3K Life & Family
  • 246.6K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.8K Discuss & Feedback
  • 15.1K Coronavirus Support Boards