2027 Christmas present - no mortgage!

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Hi everyone, I’m inspired by the diaries here so thought I would start my own. We got our first mortgage in January 2021 when I was 50 - 17 years to take me to retirement age but I want it gone long before then. 

I can remember when interest rates were insanely high in the early 90s, the news was full of daily stories of people having their houses repossessed and this stayed with me when we were looking for a house - I insisted we go nowhere near the top-end of what we could have borrowed (around £450k). 

Children are grown so it’s just me and my husband. We bought a 1930s 3-bed terrace for £160k with a £45k deposit at 1.7% for 2 years. Just remortgaged at 2.7% for 5 years. Mortgage outstanding is £105k. 

We offered on the house in early June 2020, just as estate agents came out of lockdown and before prices went crazy, so we were very lucky there - while we were waiting to complete, similar standard houses in the street were going for £190k and now are around £210k. 

The house needed a lot of work, so excess money has gone on that - a new kitchen (and quite a big kitchen), garden completely fenced (125ft long and we did both sides), new boiler, new radiators, decoration, new doors and skirting….. it’s been pretty endless but now the end is in sight - just finishing off the bathroom which will be done by the end of the year. 

So from January 2023 the plan is to stop work on the house and put it towards paying off the mortgage by the end of our current fixed term in 2027. 

Because we borrowed so low compared to income, we should essentially be able to live off one salary and save the other. Here’s the plan:

£700 a month to overpayments 
£1000 a month in additional savings - possibly premium bonds 
£400 a month in the emergency fund

Biggest challenge for me is getting the food budget under control - I’m often dipping into savings because I try to shop weekly and monthly but it never quite seems to work out. I have ADHD so that level of organisation is a challenge (plus husband decides he fancies a takeaway much too often)

 So we’ll see how it goes!

Comments

  • MF2027
    MF2027 Posts: 13 Forumite
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    A bit of background to where I am. 

    I had my children young and was a single parent for most of the time, some of the time on benefits other times living payday to payday. Back then, in-work benefits were pretty poor and help with childcare was non-existent. My credit rating tanked and remained there until my youngest was at secondary school. I used to have to get Prudential vouchers to pay for Christmas if anyone remembers those. 

    But children grow and become less dependent and I slowly got better paying jobs. In 2004 I decided to take a leap of faith and took a job in London, moving us from the Midlands. 

     I met my now- husband when the kids were late teens, 8 years after the move to London. He’s from the north-east and had also moved down the same year, and like me always intended to go back. We’re both glad we had the experience of living there, but it was never somewhere we could grow old if we wanted to own our own home. 

    Our flat in London was a rented flatshare. It was diabolical but cheap. We had two rooms there, and the other people were nice and we were friends but flatsharing in your 40s is pretty grim. But it was cheap (for London) and a means to an end - we were on a mission to save for a deposit for when we were ready to leave London. 

    Until 2020 we still had no idea when that would be - we just carried on saving. 
  • IAAM
    IAAM Posts: 95 Forumite
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    Good luck with your MFW plan. It sounds as though you're in a very good position to do well - and keeping such a public diary on here certainly does help to keep you focused on what you are trying to achieve. (Well, it has for me anyway!).


    Mortgage Balance: £162,615.84 (December 2022); £163,945 (November 2022)
    Current MF date: Feb 2032.  (Previously: Jan 2033)

    Target MF date: May 2027
    (Overpayments needed to achieve this: £1,750pm!) 

    Joint spend: £391.09 (Nov)
  • Orangetoes
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    Welcome, good luck 🤞
  • MF2027
    MF2027 Posts: 13 Forumite
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    It’s 2015, kids have moved out so I moved in with my then-fiancé-now husband in his flatshare so we could achieve our goal of saving money to eventually move away from London to the Midlands - he was happy to live in my home town. That goal and timeline was pretty vague at that point. 

    After the world turned upside in 2020 I was pretty keen to buy somewhere so that we could have some outside space and no flatmates. At that point the idea was my eldest child would live in any house we bought and we’d stay there for lockdown, and after that for weekends. 

    Estate agents were still closed, but I kept my eye out. In May they re-opened and I spent 3 weeks doing viewings before offering on the house we’re in now - 3 beds, big garden, big kitchen but it was in a bit of a state - mostly cosmetic. 

    We didn’t complete until very early January 2021, and in the months between offer and completion things changed in both our jobs. I was told we could remain 100% and my husband was offered a job near where the new house was. So we made the decision that we would finally leave London and relocate to the new house. My eldest was already living up here and my youngest decided she’d leave too. So the whole family was back up here, after many years in London. I was sad to leave, there’s nowhere quite like London, but it was time. 

    We got the keys the week after Christmas and kept the rental in London for a few months because we were back in lockdown and I needed time to get the house straight before we moved our stuff in. 

    On the night we got the keys I was sitting on the floor eating a takeaway (as you do) and now all the vendors furniture was gone I could see that a lick of paint wasn’t going to cut it - the skirting boards were in a state as we’re the radiators and doors. The kitchen, which I thought I could live with for a few years, was impossible - not enough work surface, doors coming off, an under stairs meter cupboard that meant you lost a big chunk of available space. 

    So - the original plan was to live with it all and replenish our savings. Revised plan was now to spend some time and money making it perfect. 
  • MF2027
    MF2027 Posts: 13 Forumite
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    The first thing I absolutely had to do was the kitchen. It was in such poor condition and for a big room it wasn’t well designed with only a few cupboards, no drawers and little work surface. 

    One of the best things we did early on was find a handyman who could do everything. I initially hired him to rip out and replace the skirting boards about a week after we moved in. But on chatting to him - he does everything. Over the last almost 2 years he’s done almost everything we needed. 

    So he got a planner round from Howdens and I designed my dream kitchen. That was installed the month after we moved in and wiped out the last of the savings. 

    Other things we’ve done since then -
    * redecorated the living room
    * new skirting downstairs 
    * new doors everywhere 
    * new radiators 
    * new boiler (not quite unexpected it was old)
    * fencing around the entire garden. Another major expense because the garden is big and there were a lot of rotting trees to get rid of 
    * redecorated the upstairs and bathroom 
    * new flooring throughout 

    The bathroom was finished today and that marks the end of the work. There’s other things we could do, but then there always is. 

    Finally - I’ll summarise where we are with money and my plan for the next few years to pay off the mortgage…..

  • MF2027
    MF2027 Posts: 13 Forumite
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    I said in my first post that the plan was to:

    Put £700 a month into mortgage OPs
    Save £1000 a month
    Put £400 a month into the EF

    Why that may be ambitious - it gives no real wiggle room for anything outside of a fairly tight budget for the rest of our income and over several years that may not be sustainable. It doesn’t allow for holidays for example and my car is on its last legs. 

    So the OP and EF fund should be manageable, but the extra savings - which I want to build up so that we have a lump sum to pay off what’s left of the mortgage at the end of our 5 year term - might have to reduce. 

    My husband is really good at recognising he’s not good with money, so he allows himself £400 a month “pocket money” plus £100 for a few bills that are in his name, and transfers the rest to me every pay day. 

    The EF is not solely for emergencies, it’s also for birthdays, Christmas etc. But it’s fairly depleted at the moment so the plan now is to build that up to about £5k by the end of Feb and then start the overpayments. 

    So where we are right now:

    £105,000 mortgage at 2.7% to the end of 2027
    Credit card debt of £1700 because I bought the final things for the house recently that I wanted consumer protection on, but I always pay that down quite quickly and it’ll be gone by the end of the year

    No other debt. So soon our plan can begin!
  • MF2027
    MF2027 Posts: 13 Forumite
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    Things to pay out by the end of the year -

    £200 - final few house bits, pictures shelves etc
    £1000 - pram. My eldest daughter is pregnant and we offered to buy a pram. Got a bit of a sticker shock there, last time I bought a pram was nearly 30 years ago
    £1000 - Christmas 
    £2200 - credit cards. I bought some furniture last month so this needs zeroing out

    Goals for end of 2023:

    Mortgage OP - £7000
    EF - maintain balance of £5000
    Premium Bonds - £8000 (revising this down slightly)

    Grocery - monthly shop of £100 plus weekly shop of £25 per week (£200-£225 total)

    Food - batch cook once a month and make at least 10 dinners from this for the freezer. I’ve bought some cheap tubs from Tesco and some labels, made a big chilli yesterday and froze 3 portions of it. This weekend I’ll make a spag bol, chicken curry and goulash to go in the freezer. 
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