Onwards towards mortgage free living

gillynomad

Hello! I’ve been lurking on the site for awhile and have been trying to put a lot of the advice and tips I read into practice. However, I think that keeping a diary for myself will help me to keep track and stay motivated. 

I’ve just hit my 30s and became a house-owner in 2018 after spending years saving for a deposit. It’s just me (and my dog) but I have been lucky enough to have a pretty decent income since I started working full-time so I’ve never had any real money issues (plus I am fairly risk averse…)

But the current climate around mortgages etc. has made me a little nervous for the future, although I’ve always had it in my mind that I want to be mortgage free sooner than the 30 years I signed up for. 

So financials:

• Mortgage owed: £132,234.37
• Fixed rate: 2.67%
• Fixed rate end date: 30 Apr 2023
• Remaining term: 25 years 6 months (Apr 2048 - Based on overpayments I’ve made to date my remaining term is Feb 2047)

• Student Loan:around 3 years left

• Debt owed: 0 (I have cleared my credit card last month and the only “loan” I have is a car lease for the next 4 years)

• Emergency Fund: £6,000
• Savings: £12,000 (Some of this is set aside for a planned holiday next year, and the rest is a combination of house improvements savings and general birthday/xmas fund)

• Pension: Honestly don’t know exact figures but I think I am roughly at a predicted £12-15k/year (incl. state). Ideally I’d want to be around the £20-25k/year mark. I pay a monthly % (although it’s less than in my previous job role last year). In theory I have the time to get there so it’s not a huge priority over the next 2-3years but am planning to up my contribution once I’ve remortgaged…

I currently have about £1200/month after mortgage/bills etc. Up to this point I’ve been focusing on building savings and emergency fund (and just generally enjoying myself after the lockdowns etc.) but with everything that’s hit the last few months my focus is now switching…

My 10 year goals

• Reduce mortgage to £50k
• Be student loan free
• 12k Emergency fund (based on current salary for 6-7months )
• Save ~£50k for House improvements
• Save 10% of salary a month to pension (not including company contributions) 

So they are my long term goals however, as I said I am switching focus and financially my goals will be to do the following:

My 12 month goals

• Reduce mortgage to £115,000 (around £17,300)
• 7k Emergency fund

gillynomad

My daily interest is currently: £9.92
My monthly interest is currently: £307.63

I overpay £150/month by DD but this month I've started making weekly payments towards my mortgage. So far I've added an £200 with another approx £200 to add tomorrow. 

I need to have a look around at some savings accounts, as my current account where my emergency fund is held has pretty poor interest rates. 

IAAM

Hi Gillynomad. I just wanted to wish you the best of luck with your goals - although it sounds as though your strategy so far is really paying dividends for you :-)

I only started my MFW diary on here about a week ago but, for me, it has definitely added a level of accountability and focus that I needed.  

gillynomad

My salary sacrifice for pension started today (my current job sets you up with a normal one and you request the sacrifice scheme which I hadn't realised). So that gave me an extra £70 which immediately went to clear my "minor" credit card (a cc I use for certain payments but clear at end of month so I don't pay interest hence I don't count it as debt). Was nice for that to essentially feel like "free money" this month as I hadn't budgeted getting the extra. 

Made the additional £200 overpayment to mortgage which means for October I managed to overpay £550 (£50 shy of my target). So happy with that! I had a few extra payments this month with a new car so wasn't sure if I'd been ambitious. 

This month is going to be tricky...I love Christmas and tend to go overboard on presents and just general xmas spirit. I need to sit down and write a budget and make sure I stick to it. 

CasualMFW

Hi Gillynomad,
It certainly looks like you're someone with a firm plan. We seem to be a similar age with similar goals so I'll be following your diary with interest. 

Good luck.

gillynomad

@CasualMFW - I love making plans. Normally have issues sticking to them  hoping posting here will help keep me focused!

gillynomad

So done a reccy on my "loyalty" cards to see if there's ways to reduce spending this xmas. So far found the following:

• Boots: £50.02
• Waterstones: £47.75
• Nectar: £130.57

got a few things in mind that those amounts could be used on so that covers me for a couple of family members. 

gillynomad

made my first overpayment today for November - £150 to get me off the starting block.

gillynomad

The interest rate rise today hasn't made me feel particularly great - just added on the pressure to ensure I am careful with my money over the next 6 months and do as much as I can to overpay what I can. 

I decided in October that everything above £7500 in my Chip account when I get to remortgage time will go towards a bulk overpayment (I have plans for renovations that have been put on hold due to the climate...). I've got just over £600 at the moment. I've chosen not to move the money etc. (1.1% interest) simply because of how the account works. 

I also checked my Emergency fund account to find out it's 2% interest rate so will probably keep it there for now but need to find somewhere else as I need to go into a branch to get money out which isn't practical (although living in a city makes it easier and the bank still has a place in the town...for now.)

gillynomad

DD overpayment came out today with my standard mortgage payment so another £150 to make £300 for November so far

frankersBri

Hey Gillynomad - welcome to the board and thanks for sharing your plan. You seem super in control and really focused! We're of a similar age and I share some of your goals, so I'll be following your progress with interest