MF by Christmas 2024 - let's do this!

Coxy11

Hi everyone,

I’m taking the plunge and starting a MF diary as DH and I want rid of the millstone around our necks.

We both work full time and are currently supporting DS2 who is in year 2 at uni. DD finished uni in the Summer and has a temp job so we aren’t charging her rent atm. DS1 lives with his GF so they are independent from us.

Our current mortgage is £266,193.72 on a tracker (groan) at 5.58% until 31 May 2025. Our current term has 12 years 7 months left. We are allowed to overpay up to 20% of the loan value each calendar year. Each monthly payment consists of approx. £1300 interest which is crazy.

Our plan is to:

a)    Sell our rental property – 1 bed flat unencumbered – either to current tenants or on the open market*.

b)    Make a sizeable overpayment each month – currently budgeting for £1k per month – some months more, some less

c)    Make other overpayments by using lump sums from regular savers as they mature**.

*We are having the property valued in January and will take an average price to offer to the tenants. We would be happy with £225k as wouldn’t pay EA fees, but would need to factor in legals and any remedial work needs – hopefully nothing but will see. Tenants will need a mortgage. If those figures stack up, we will hopefully clear £220k. If the tenants can’t raise the mortgage/don’t agree the price, we will honour the currently contract due to end in August and then put on the open market. Would rather not though as this means no rent and having to pay CT whilst it’s empty.

In terms of CGT, we have owned the property for 7 years and bought it for £222.5k so negligible as it is jointly owned. We will factor this into our figures though.

**We have a regular saver with Halifax at £250/month, maturing at the beginning of February. So once the interest of 4.5% is applied we will pay off a lump sum – probably beginning of March. We also have a Nationwide regular saver each at £200/month, 8% interest, maturing August 2024, so another lump to pay off at the end of September.

Our only other debt is an interest-free loan for carpets which costs £158/month and has 7 payments to go.

I recognise that these figures are eye-watering – believe you me, they are keeping me awake at night too. However we have a household joint income of £115k so are able to service it all, plus have a life. I just wish I wasn’t giving so much interest to NatWest though and would love to save that money into our pensions.

For context DH is 50 and I’m 54. I’m aiming for retirement at 60 if possible as is DH.

Coxy11

So aside from the obvious chunks of regular payments, overpayments and (hopefully) offloading the rental property, what else will we be doing to ensure MF status by next Christmas:

Strict food budget – means meal planning, batch cooking, taking lunches to work (me), not buying coffee/croissant at work (again….me), and taking advantage of food delivery offers – saving petrol by not going in person.

Strict present buying budget – have already made the list of friends/family for 2024 for whom we buy, and set a budget.

Only use the car when necessary – DH works at home but goes to the office once a fortnight. Other than that, combine journeys to shops, visiting friends/family, tip runs etc.

Make the most of Odeon Limitless – our one treat and instead of Christmas gifts to each other we have a £14.99/month subscription each. It’s only a 10 minute walk away and as the name suggests, it’s limitless.

Grow some veg…..really want to do this, just lacking inspiration and confidence. Must try harder as we have a large south-facing garden, so no excuse.

If we are gifted any money from ILs (they occasionally will gift us £1k or so), pay it straight off the mortgage.

 

In case anyone is wondering, we have savings, are insured (life/property/car/ possessions) are up to date with utilities and have sinking funds for known expenditure like Christmas/Car maintenance/DS1s wedding/DS2s uni expenditure.

Any other tips or pearls of wisdom to share please? I feel like no-one else has a mortgage as large as us ☹

Watty1

It is doable and you will find lots of encouragement and ideas on here!  Cheering you on.

LadyWithAPlan

There are others on here with over £400k and £300k+ mortgages - some doing it solo so you are are not alone with a large mortgage.. Sister Golds was £429k but she has now got it down to high 200's

Sounds like you have a great  plan - now the hard part is sticking to it... Maybe do a colour in wall chart where you colour in each brick you own eg £500 a brick etc as motivation to keep focused whilst waiting to sell the BTL.

Are you planning to skip the vacay in 2024 to get to your goal faster or at least limit your spend there?

I assume your kids are on a budget where you help them? Wedding budget and uni budgets can get scary as I know you know. Could be a great learning lesson for the whole family as you talk about what you are going to do to get into a great stress free position.

Also if you have spare money then over BR tax it is worth paying extra into pensions and sipps v the mortgage but I understand you want this debt gone or at least down to a manageable level.

Coxy11

Thank you both for your comments and glad to know we are not alone with a big mortgage!

In terms of uni budget - DS2 gets the minimum maintenance loan in termly instalments and his rent is also termly this year. We send him the difference between the two plus £300 a month to live on. He has a holiday time job in McDs so that gives him some extra.

For the wedding, we have already given over a sum towards the venue, but other expenditure is hen/stag weekend, outfits for DH and I and rooms at the venue on the evening of the wedding for DH and I, DD and DS2 (who will share) and DS1 and DIL2B. We have a rough idea of these already.

I mentioned to DH about a visual representation of our mortgage and he wasn't keen(!) but on our spreadsheet - which has a tab for the mortgage pay down, we have the overpayments/chunks listed and will colour them in as we go, so it's sort of the same thing.

Not sure about a holiday next year. Hen and Stag weekends are in May, wedding in June. We may try to get away in September. It all depends on whether the rental property has been sold by then and how the figures stack up. 

Only spends today will be from my personal money as I'm seeing a friend for lunch. He lost his mum earlier in the year and I haven't seen him over Christmas as I've had Covid so couldn't see anyone! 

beanielou

Happy shiny new diary 

Coxy11

Thank you @beanielou xx

Coxy11

Hi all,

Things are plodding along here. Next regularly mortgage payment goes out on 10 January, so will post new balance after then. IFC payment for carpets went out on 2 January, so just 6 more payments to go and under £1k owed now.

This coming week I will contact the BTL tenants and ask them for a date when we can get a couple of agents round to value the place. I mentioned before that we have a fair idea of what it's worth, just need to make it official.

Food budget still has until 20 January to run and it's almost gone due to Christmas and NYE - we do have a Christmas budget for gifts/food/drink but clearly it is insufficient - will need to look at that for this year. This wasn't helped by DH ordering 36 bottles of wine thinking we'd be entertaining and me getting Covid so we didn't! All food expenses are on a cashback CC which we pay in full every month so will adjust personal spends or ad hoc savings amounts down slightly to balance the books. One small win is SIL's birthday gift bought today came in £8 under forecasted budget. It all counts.

Suffolk_lass

How lovely to follow your journey; happy new diary!
In terms of growing stuff, I always think potatoes in the ground nice and early will help break up the earth and clean it, ready for something you like and might cost a premium (eg asparagus, which takes three years before it starts cropping properly). The first early seed potatoes are available now, just put them in empty egg boxes on a windowsill until the little green shoots are underway and the bury them, 20x20x20cm (apart in a row, between rows, and deep). We tend to grow things like berries and plums (a Victoria is self fertile).
I feed us through winter on soups made from grown, prepped and preserved stuff from our garden, and bottle fruit, ready stewed for free puddings when only something comforting and old-fashioned works (preferably in a crumble with custard for DH).

You already know all the grocery shopping hacks, if memory serves me, but shopping from home is great and you know exactly what is in it. So no UPC to worry about

LadyWithAPlan

Some people do 2 jars of marbles - what you owe and what you own .. £500 a marble Its just fun as you physically get to do something to mark the wins. Though if spreadsheets work for you ...

Cornish_mum

Hi and welcome!
If you are a novice gardener be very careful to avoid spending more than you make back on growing veggies. It’s incredibly easy to spend alot with very little in the way of produce (from bitter experience). We focus on growing the expensive stuff, herbs, salad greens and tomatoes, as we are short on time and space.

Best of luck CM