50k in 5 years

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  • ecoelle
    ecoelle Posts: 1,585 Forumite
    First Post Name Dropper First Anniversary Combo Breaker
    Finished talking to the mortgage advisor and we think we are going to wait a couple of months and then lock in a new rate in December which we will be able to then start in February.  I'm not sure what is going to happen to interest rates but I think we are going to opt for a 5year fix and just be done with it.  We are probably going to adjust the term to keep our payments around the £600 mark and then make as large a lump sum payment as we can every year, plus any extra bits as and when.  

    The mortgage advisor did say that because our original mortgage with them was for £85k we can continue to overpay by £8500 per year with no penalty.  I had assumed that we would only be able to overpay by 10% of our new deal but that's apparently not the case. So that's good as it means if we have months where we get more hours or commission then we can make extra payments over what I thought we were allowed. 


  • ecoelle
    ecoelle Posts: 1,585 Forumite
    First Post Name Dropper First Anniversary Combo Breaker
    Right, been playing with numbers this morning, following on from our conversation with the mortgage advisor yesterday.  i think we are going to lock the rate in December and then switch in February.  I'm aware rates could go up before then but the ERC, plus the fact that fixed rates have doubled from when we took our last one means it makes sense for us to wait.

    Very basic numbers but as a starting point, by the time February comes round we should have just over 49k owing, also by then we will have 3.5k saved for an immediate OP, plus the first monthly payment of £620 meaning we actually start on 2nd Feb owing approximately 45k I would like it all gone by August 2027. 

    So Feb 2023-August 2027... it is not that far away but I think if I break it down we can do it, we just need to really focus.

    With estimated interest, I'm not sure really how to work this out properly, I've taken the estimated balance in Feb, minus 12 x £620 (£7440), every April from 2024 we will draw £3200 from cash savings as a lump sum OP, I've done some very basic predicted numbers.  I will update them each month I think so as to see how they are going.

    February 2023 Balance 49k
    January 2024 Balance 39.6k
    January 2025 Balance 29.9k
    January 2026 Balance 20.1k
    January 2027 Balance 10.3k

    These are incredibly rough, obviously when we make the OP it will affect the daily interest charged but I'm not able to work that out.  Basically if we are going to aim for £4000 OP each year as a minimum, we need to be paying £620 a month, which is what we pay now but actually gives us a small OP every month of about £20 anyway.  Then we will have the £3200 which is already allocated, total £3440, so we need to find another £560 per year to make the £4000.  £560 / 12 months means we need to find £47 extra per month, which is only £11 a week averaged over the year.  

    That's doable...right!?!?

    On average we need £2300 per month to cover our current commitments, so my plan is to have enough in our emergency fund to cover a couple of months outgoings and then to start taking anything each month that is over £2300 and overpaying it off the mortgage.  I think I'm also going to take any extra money we get given/earn/find and also pay that off the mortgage.  This could be money from surveys, receipt apps, side hustle earnings, refunds or overtime.  

    Right, off to work now, but £11 a week is definitely what I'm focusing on.


  • savingholmes
    savingholmes Posts: 27,258 Forumite
    Name Dropper First Anniversary Photogenic First Post
    ecoelle said:

    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 can you reduce this?
    TV Licence20 this seems high - though was more like 13?
    Satellite/Cable TV11 - Do you get full value out of this if not cancel
    Internet services32 I pay £24 - are you on a good deal? Can you haggle?
    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 Have you checked out alternatives? Do you make sure you get cashback if available
    Buildings Insurance15 Often you get a better rate paying annually rather than monthly. I paid £123-150 for mine last year. Check using cashback sites etc. Get quotes. Check not overpaying
    Contents Insurance15 as above
    Life Assurance63 
    Other Insurance59 double check on good deal and whether the amount your paying is worth it. 
    Presents (birthday, christmas etc.)100 Generous - but is it essential to be this level?
    Haircuts10
    Entertainment60
    Holiday150
    Emergency Fund30
    Dram Club30
    Disneyland10
    Sofa10
    Disney Plus10
    Scout camp10
    School trips20
    Work food50 this could be something to target
    Lottery10
    Online Maths9
    Contact Lenses16
    Tumble Dryer Insurance3 This adds up over time - make sure its worth it
    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 said - make sure you make provision for your pension too... 

    Do you not own car(s)? Just checking not omitted...

    Achieve FIRE/Mortgage Neutrality by mid 2030
    1) MFW Nov 21 £201,999 with 237 payments to go - now £184,341 Equity 26.26% (lower post move compensated by EF) plus spent £10K+ on home improvements/emergency repairs
    2) Mortgage neutral by June 2030 AVC £8.063/£127,466 AVC target 6.32%
    3) FI Age 60 annual income target £12,500/30,000 41.66%
    Achievements: CC free since April 22. 1 year EF from Jan 24 & dedicated pot for home improvements
  • ecoelle
    ecoelle Posts: 1,585 Forumite
    First Post Name Dropper First Anniversary Combo Breaker
    ecoelle said:

    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 can you reduce this?
    TV Licence20 this seems high - though was more like 13?
    Satellite/Cable TV11 - Do you get full value out of this if not cancel
    Internet services32 I pay £24 - are you on a good deal? Can you haggle?
    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 Have you checked out alternatives? Do you make sure you get cashback if available
    Buildings Insurance15 Often you get a better rate paying annually rather than monthly. I paid £123-150 for mine last year. Check using cashback sites etc. Get quotes. Check not overpaying
    Contents Insurance15 as above
    Life Assurance63 
    Other Insurance59 double check on good deal and whether the amount your paying is worth it. 
    Presents (birthday, christmas etc.)100 Generous - but is it essential to be this level?
    Haircuts10
    Entertainment60
    Holiday150
    Emergency Fund30
    Dram Club30
    Disneyland10
    Sofa10
    Disney Plus10
    Scout camp10
    School trips20
    Work food50 this could be something to target
    Lottery10
    Online Maths9
    Contact Lenses16
    Tumble Dryer Insurance3 This adds up over time - make sure its worth it
    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 said - make sure you make provision for your pension too... 

    Do you not own car(s)? Just checking not omitted...

    Hi, the numbers are accurate for us.  Things like £100 for birthday/Christmas, it includes presents, party costs, presents for us as a family from each other, presents from us to others, including the multiple other children's Birthdays our daughter gets invited to, extra food at Christmas, any decorations or extra activities.  It isn't just gifts, I just lump it all together.

    The other things you highlighted, mobiles are both on contract but my OH will be up for renewal in December so we are looking at SIM only deals to reduce this. 

    TV licence, I put £20 a month away as it is easier to transfer round amounts, then when it is full i then snowball this £20 into another Monzo pot, until that one is full.  Like debt snowball but for savings.

    The £11 is netflix, and as a family we use it a lot, we don't eat out very often, neither myself or my OH drink alcohol or go to expensive pubs clubs or sports games so I'm not prepared to give it up.

    Our internet is tied in to a deal but again this will be looked at when it comes for renewal.

    Pet insurance figure up there should really be called 'cat cost' it's the insurance, food, fleeing, worming and vaccinations cost.

    B and C insurance is another one we snowball, so we put £30 in a month until it's full, then send the £30 to another pot after, like EF.

    Our life insurance and Critical Illness insurance are expensive but we need them.  It's a double whammy when you have chronic illness. You get charged more for insurance as you're more likely to need it, then you cant work to earn as much as other people because you are I'll...

    The £50 for work food is my OH, he works 5days and uses this money to do a mini weekly shop, so £10 a week to get his lunch stuff then £10 a month for his vape habit.

    The tumble dryer insurance is worth it for us.

    We don't have a car :) it used to cost us £100 a month to run out car, and only £20 of this was petrol so we ditched it and put £50 a month into travel to pay for trains, buses and taxis when we need them.

    Thanks so much for your comments, there are a few things that are on our list to look at when they come up for renewal.
  • savingholmes
    savingholmes Posts: 27,258 Forumite
    Name Dropper First Anniversary Photogenic First Post
    Good luck with it all
    Achieve FIRE/Mortgage Neutrality by mid 2030
    1) MFW Nov 21 £201,999 with 237 payments to go - now £184,341 Equity 26.26% (lower post move compensated by EF) plus spent £10K+ on home improvements/emergency repairs
    2) Mortgage neutral by June 2030 AVC £8.063/£127,466 AVC target 6.32%
    3) FI Age 60 annual income target £12,500/30,000 41.66%
    Achievements: CC free since April 22. 1 year EF from Jan 24 & dedicated pot for home improvements
  • You sound very on it well done. Definitely on a winning path - the focus creates miracles 

    Once I started putting money into saving pots to annual bills about a decade ago it changed my life :) even now putting monthly vacation money aside when I am not sure when I am going away next just gives me freedom and peace. I am not scrabbling to find money - sure unexpected costs and wants do happen but then I have room to manoeuvre 

    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 March  streaks to track
    Track Minimalist game  items (Nov 310)   (Dec  95)  (Jan 90)   Feb 50
    Exercise streak  
    YNAB days:: Target 50 days -Age of money 29
    Track my NSD's - Target 13 days/ 0/13

    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 Forumite
    First Post Name Dropper First Anniversary Combo Breaker
    I agree, I have a set amount £365, that gets transferred to my Monzo each month, then I distribute it between the pots, sometimes we have spent less out of one than expected so it doesn't need topping up, so we put that allocated money into one of the other pots.  I like knowing that I have space to move things round if I need to.

    Sunday Round Up

    * Agreed Mortgage plan with OH, wait for December 1st then lock in new rate to commence 1st February.

    * Began Shelftember, using what we have in stock for groceries and only buying absolute essentials to then create the weeks meals.

    * Opened two bonds, one 6 and one 12 month.

    Things to do this week

    * Batch cook Chilli x 8 portions

    * Cook leek and potato soup for lunches after work

    * Batch cook Tomato and Lentil soup x 8 portions

    * Write audit of freezer and pantry

    Right, off to make a late breakfast for everyone, have a good Sunday peeps xx
  • Good luck with your grocery challenge. That's my biggest area of weakness too. Meal planning is helping. Love Shelftember.
    Achieve FIRE/Mortgage Neutrality by mid 2030
    1) MFW Nov 21 £201,999 with 237 payments to go - now £184,341 Equity 26.26% (lower post move compensated by EF) plus spent £10K+ on home improvements/emergency repairs
    2) Mortgage neutral by June 2030 AVC £8.063/£127,466 AVC target 6.32%
    3) FI Age 60 annual income target £12,500/30,000 41.66%
    Achievements: CC free since April 22. 1 year EF from Jan 24 & dedicated pot for home improvements
  • ecoelle
    ecoelle Posts: 1,585 Forumite
    First Post Name Dropper First Anniversary Combo Breaker
    Evening all, I've made a big pan of leek and potato soup and a vegetable and bean chilli today. Enough for a choice for tea and then a few portions for the freezer. LO will have soup I think, and some chunky bread, I usually stir through some cannellini beans or similar to add a bit of protein. 

    On a bit of a worrying note, all staff at the nursery I work in have been called to a meeting tomorrow with the governor's.  I'm really worried it might be bad news.  My contract is for zero hours so if we are talking redundancy than I'm a bit scuppered.

    I can't attend the meeting as have no childcare so I'm relying on my friend to message me with what it's about.
  • savingholmes
    savingholmes Posts: 27,258 Forumite
    Name Dropper First Anniversary Photogenic First Post
    Best of luck with the job.
    Achieve FIRE/Mortgage Neutrality by mid 2030
    1) MFW Nov 21 £201,999 with 237 payments to go - now £184,341 Equity 26.26% (lower post move compensated by EF) plus spent £10K+ on home improvements/emergency repairs
    2) Mortgage neutral by June 2030 AVC £8.063/£127,466 AVC target 6.32%
    3) FI Age 60 annual income target £12,500/30,000 41.66%
    Achievements: CC free since April 22. 1 year EF from Jan 24 & dedicated pot for home improvements
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