New year, new goal

RS89

Starting a new diary as I didn’t update the old one for a while and it was closed. We had a pretty large mortgage of 395k taken out 7 years ago and I set myself the goal to be mortgage free by 50! My old thread had that title. 

Anyways to recap - we’ve been diligently chipping away at that and I’m pleased to say that today the balance stands at £273k!

So now the scary part - we were fortunate to remortgage last year at 1.14% for 5 years… (had to pay a massive fee as we were locked into a 10 year but worth it overall) ) and I am now aiming to clear this balance by the end of that term… I.e. by 2027… so by my 45th birthday - 5 years ahead of the first goal and a full c15 years ahead of the initial term we took out. 

Right now we have a regular overpayment of £500/month. This has just increased slightly and now is high enough that the bank send me a letter every month that’s motivation!

Using the calculator, that means I need to find £184k between now and 2037 once those overpayments are applied. 

Since the rate is so low we also set the same in equity savings which should outperform 1.14%… I would hope so that’s another 30k or so.

And then we need to seriously reign in the spending for just 4 years… to find £184-30 = £154k and we’re done. I’m looking at Marie Kondo’ing our possessions, changing how we socialise (more at home and less out), car fees, how we can reduce our food shop, everything. I just signed up to a sim free mobile deal at £8/m, my wife at £11/m… vs before at £75/m each!!! 

It’s so close…

Anyone else out there going as aggressively on such a large mortgage? Any tips? Are lottery tickets a viable strategy? Joke! 

Wish me luck… 

FlacosFloozie

Best of luck @RS89. It's great that you managed to fix for that length of time at such a low rate.

You've made massive inroads already and you're off too a good start with the mobile deal.

Grass_Roots_2

Hi - firstly very jealous of your interest rate, that's amazing.  

I've got an even larger mortgage of £554k  if that makes you feel better - but know I won't be able to nail it by 2027!  My suggestion would be looking at a side hustle may be to support in closing the gap.  I used to do a lot of flipping of car boot sale finds on ebay - but sadly don't have enough time any longer, but it was quite lucrative if you find your niche (mine was vintage interiors).  

RS89

Grass_Roots_2 said:

Hi - firstly very jealous of your interest rate, that's amazing.  

I've got an even larger mortgage of £554k  if that makes you feel better - but know I won't be able to nail it by 2027!  My suggestion would be looking at a side hustle may be to support in closing the gap.  I used to do a lot of flipping of car boot sale finds on ebay - but sadly don't have enough time any longer, but it was quite lucrative if you find your niche (mine was vintage interiors).  

Wow that’s a huge sum! It feels daunting but the pounds do add up fast.

I love the idea of a side hustle but like you time is a challenge… I’m in a fairly demanding job as is my wife… so I’m thinking cut expenditure first to the bone then once have exhausted that to look at income generation.

RS89

No wins on the premium bonds today… that would have helped the cause along… however did get my monthly letter from the bank confirming my overpayment has reduced the term  

bmthmark

Hi,
I had £250k mortgage and i'm now down to £148k. I managed to get a 0.99% over 5 years (last August). I wish I did a 10 year like you.
I overpay a similar amount to you as well.

One of the questions I have in my mind is whether its better to save the £500 in a saving's account as the interest is quite good, or whether I should just pay it off the mortgage.
I have just started this month to put the £500 in the savings account. But i'm not sure if this is the right thing to do. I know its nice to see the mortgage amount go down more
My plan was to wait until the end of the year and pay a lump sum off after I got the savings interest.
What are your thoughts on this?

RS89

bmthmark said:

Hi,
I had £250k mortgage and i'm now down to £148k. I managed to get a 0.99% over 5 years (last August). I wish I did a 10 year like you.
I overpay a similar amount to you as well.

One of the questions I have in my mind is whether its better to save the £500 in a saving's account as the interest is quite good, or whether I should just pay it off the mortgage.
I have just started this month to put the £500 in the savings account. But i'm not sure if this is the right thing to do. I know its nice to see the mortgage amount go down more
My plan was to wait until the end of the year and pay a lump sum off after I got the savings interest.
What are your thoughts on this?

It’s a good question. On paper you are better off saving but it’s a matter of self control. I did the math and at current savings rates the difference was marginal - So I prefer to overpay directly and be sure I’m paying it down rather than be tempted to spend it on a new kitchen or something. 

bmthmark

RS89 said:

bmthmark said:

Hi,
I had £250k mortgage and i'm now down to £148k. I managed to get a 0.99% over 5 years (last August). I wish I did a 10 year like you.
I overpay a similar amount to you as well.

One of the questions I have in my mind is whether its better to save the £500 in a saving's account as the interest is quite good, or whether I should just pay it off the mortgage.
I have just started this month to put the £500 in the savings account. But i'm not sure if this is the right thing to do. I know its nice to see the mortgage amount go down more
My plan was to wait until the end of the year and pay a lump sum off after I got the savings interest.
What are your thoughts on this?

It’s a good question. On paper you are better off saving but it’s a matter of self control. I did the math and at current savings rates the difference was marginal - So I prefer to overpay directly and be sure I’m paying it down rather than be tempted to spend it on a new kitchen or something. 

I totally agree with you and its very satisfying being able to see the mortgage amount go down.
Best of luck with your goal.

RS89

Been reading the blog of Mr Money Moustache and it’s a fascinating place. Taking mortgage free to a place where you are actually free- free… totally financially independent. 

From that we are going to downsize from 2 cars to one, as the capital released from selling one car invested would more than pay for alternative transport for the few times we genuinely need it, and that’s another chunk of cash towards the mortgage when the renewal comes too. 

My issue is I have a fairly niche 2nd car that is worth on paper (eg online guides etc) 2-3x what other cars of the same age and model are. But it appeals only to a niche group of buyers. So am thinking of using We Buy Any Car…. Anyone used them? I hear they only knock off cash for cosmetics so maybe a good wax and polish and some alloy wheel refurb is in order. 

RS89

So the car has sold very fast, only been up for sale a few days and got nearly full asking price for it. So that’s several thousand more to add to the pot. I will invest this money for now so that the return can pay for my travel expenses and then add the lump sum to the overpayment pot when the 4 year milestone comes along. 

Making good and fast inroads now with this fresh focus… my next focus is trimming the grocery bill. 

However, it also looks like we might need to get emergency repairs to the bathroom as there’s a leak… so that’s putting a spanner in the works….

two steps forward and one step back. Such is life. 

RS89

Bathroom confirmed as needing significant works, around £5k worth… so that’s less than awesome. 

This months payment and OP have gone out, so we are down to £271k. 

Keep catching myself daydreaming about what we can do once it’s gone…

My big focus now is on how we can trim the food and socialising bills. We do online shopping for groceries which stops impulse buying but I do think we need ideas for more economical meals. We spend £700 a month on groceries for a family of 4….