Alion's Mortgage Reduction Diary

evab_2

Well done on your OP's, that's great to know you own a large chunk of the house!

setmefree2

well done on those OPs :T:T

bungrefurb

Have just read your diary to date and all i can say is WOW. Well done Alion, I am in awe of your grasp of figures. What spreadsheet do you use?

Alion

bungrefurb wrote: »

Have just read your diary to date and all i can say is WOW. Well done Alion, I am in awe of your grasp of figures. What spreadsheet do you use?

I just have a list with each month, the payment required, using the PMT() formula and the overpayment - for what we've paid, what we plan to pay, and what we'd have if we'd paid nothing extra. The rest of it's just playing with the numbers. It's been played with so much it wouldn't make an ounce of sense to anyone other than me, but I love it

Alion

December check-in time and an overpayment this year of £34,750!!! (Haven't been including the £20k in the 2009 MFW challenge as it was saved up and ready to go when our fixed rate expired in January). I can't quite believe it - we've got so used to our additional outgoings now that we don't even miss it.

So that takes our total down to a measley £146,464.05, having started the year at £186,874.69 so We've paid off £40,410.64 in capital instead of 5,660.64 and have so far reduced the length of our mortgage (assuming no additional overpayments) to 16 years and 5 months. If we continue to pay off £750 extra a month it'll be gone in 10 years and 4 months, and we're 3 years into that already.

The question now is whether we should get a bigger place before or after we start trying for a family...

pammyj74

wow that is amazing, well done,
How do you manage to OP so much? Thats more than double my income alone!!

Alion

It's been a while...

Over 2 years since I last updated!!! That's shocking, although I have been updating the MFIT Take2 thread.

I can now report that we own 2/3 of our house! We put in an overpayment on our 5th anniversary of moving in to take it to that level. I can't believe how well we've done.

We have overpayed £100,000 in five years (£100,143.14 to be precise). We are lucky to be both working in good jobs. The last comment I hadn't noticed - we live on one salary and invest the second. I appreciate not everyone can do that, but it will also mean that we don't feel the hit too bad when I stop working when we have children. Because we've always lived that way, we have a lifestyle that is well within our means. Again I want to highlight that I feel so lucky we can do this.

Now for some eyewatering stats as usual...

we have already reduced our mortgage from 25 years to 12.1 years. If we continue at the same rate, we will have paid it all off in 8.4 years (although I doubt we'll continue to overpay at the same rate forever). We are exactly 5 years through.

We have reduced our projected total payments (for a mortgage of £200,700) from £317,962.08 to £249,277.13, a saving of £68,684.95 in interest payments. If we continue at this rate that will be a saving of £83,453.09.

If we didn't overpay, we would have reached this point in March 2025.

Our house is worth approx £230k, we'd like to move to somewhere worth approx £350k in the next year or so. As things stand at the moment, without overpaying we'd need a mortgage of £294,398.28 to achieve that (assuming we save for all associated costs and don't add them to the mortgage) and would be able to take advantage of 85% LTV rates and deals (mortgage would be 84.11% of value). The work we've done means we'll need a mortgage of £196,382.61 (same assumptions) and would be able to take advantage of 60% LTV rates and deals (mortgage would be 56.11% of value). We know that that is affordable on a single salary (it's what we're paying now).

In other words, we have done it. We have got ourselves to a point whereby moving into a bigger house will not increase our outgoings on a monthly basis, and will allow us to start a family without me having to return to work.

Wow!

Thanks for all your support. The journey doesn't end here, it's just amazing to have achieved our original aim. I guess what this now means is we can start thinking about houses that aren't right at the bottom of the market.

Dreams really do come true when you work at them.

Alion

We've put in an offer on a new house. It's a lot more than what I said in the previous post, but it's a perfect forever house rather than another step up the ladder.

We're waiting to find out if they've accepted it. But it would never have been possible without overpayment and the support of this amazing board.

Thank you

Alion

sadly we didn't get the house we offered for in my last post and we're still looking for something even half as good as it.

Our mortgage will plough through the £70k barrier next week. I can't believe how far we've got already. In the MFIT3-T2 challenge we were aiming for £100k!!! We've got quite a little pot together as we can only overpay 10% a year on this mortgage deal and that value is reducing every year. We're going to use that to pay stamp duty/estate agent fees/legal fees/etc when we move.

And in other news when I get paid next I will have paid off my student loan! I am so pleased. All this and I'm not even 30 yet! (quite)

Alion

We found another house, it's about 80% as good as the one we lost, but that was a one in a million opportunity. It ticks all our boxes and is only affordable as it needs a LOT of work.

We've got quite a bit saved to go in the mortgage when our deal's up (as 10% OP annually isn't as much any more) which we have now allocated to doing the house up along with whatever else we can save in the next few months.

We will be increasing our mortgage from £69k to £260k which is a massive jump, but if we hadn't been overpaying it would be from £172k to £370k which would be completely unobtainable (and probably out of our reach making the house inaccessible to us) and repayments would be over £500 a month more on current (2.78%) interest rates. If the interest rates increased the impact would be even greater.

We are in a complete chain and things should move quite quickly from here.

This forum, the inspiration from here is what got us here. All this work has done what we initially planned to do - it's got us in a position to buy this house.

We are so excited!