Roll on October 2025!

Archerychick

Thought I would start my own thread!

• Mortgage taken out c.10 years ago for £95,000
• Have had several rate changes in that time
• Now on a 1.4% fix through until October 25, with currently 9 years left on the overall mortgage term
• Have overpaid a lot pre 1.4% deal and since savings rates went above this, overpayments have been allocated in a savings account to pay off in Oct 25 when the mortgage should be gone.
• Current balance is £29.6k, and I have £13.4k in savings allocated to this.
• Monthly mortgage payment is £439, and I'm saving £700 PM - that will likely see I've too much allocated by about £7k, but the money isn't needed for anything else and will likely reallocate if that is needed for something. Or alternatively, when we get to December 24 I'll stop allocating an overpayment.
• Payments left 22!
• This said we get to October 25 and it's favorable to keep that £23k needed in savings & secure another fixed rate that is what I'll do, but obviously, without a crystal ball, we don't know what the financial landscape will look like.....
  

Archerychick

The first mortgage payment has been made for 2024 and an overpayment of £300 transferred to a regular saver. I would usually allocate another £400 to the mortgage but because I'm on track at the lower amount I have other uses for that money this month.

This means - 

• 21 payments left
• Mortgage balance £29.2k
• A total of £13.7k in savings which is allocated to the mortgage

Looking at those savings I need to do some juggling soon as £3k is in a regular saver earning 7% and that matures end of March, so this will need to be moved somewhere, probably put into a fix

• £2k is in a fixed savings account earning 5.52% but that's until end of 2024

2025 will be the year of juggling though as to maximise tax free savings I've a large chunk of my ISA allowance for this year allocated to the mortgage, so I'll need to look at re allocating funds from general savings with funds in the ISA so I don't end up with taking funds out that I can't replace > this should be as simple as a reallocation in my finance software but that's a problem for 2025!

I spent some time this week reading some of the posts on the debt boards and I realise how fortunate I am to be able to get the mortgage away so soon - it's a really nice feeling!

Archerychick

I've changed my mind on the allocation of January's overpayment, I had less spending than I had anticipated so I've allocated another £400 to the mortgage overpayment pots. 

That brings the total pot to £14.1k, against a mortgage balance of £29.2k.

Anticipating a struggle in preventing tax being paid on savings interest, I've recently set up a spreadsheet so I can see tax-free savings vs. non-tax-free savings, to ensure I keep below the £1k interest earned. Modeling this out, it looks OK until I get to June/July 2025, so may need to have the ISA for that year being a flexible one maybe so I can put in money & replace it in that same tax year.....But need to keep a close eye as I've made a whole load of assumptions on what I'll be saving each month. Could be a reason to bring forward some jobs in the house maybe

Archerychick

Realised over the weekend that I haven't been applying the earnt interest I'm gaining from putting the morgage over payments into savings rather than against the mortgage within my "total pot saved".

It's too difficult for me to do this going back to May, so I will just do this going forwards from 1st January. Based on my planned overpayment savings, and current interest rates (which are likely to drop a little) I will gain c£1.9k in interest through until the mortgage deal ends for us which is nice!

Therefore the mortgage savings pot is £14.2k against my mortgage balance of £29.2k.



 

newgirly

Best of luck with your new diary, not long to go now 🙂

Archerychick

newgirly said:

Best of luck with your new diary, not long to go now 🙂

Thanks! It’s pretty cool to watch the savings balance go up and the final owing number in my spreadsheet go down! 

😊

Archerychick

I've created a new spreadsheet, why? Because what I had didn't quite do the job I needed & who doesn't love a spreadsheet!

It calculates based on today's balance, less my savings (allocated to the mortgage) balance, less the interest earned each month, less the added allocation of more overpayments, what is left at the end of the term.

I already knew that I would be over and probably wouldn't need to allocate any more overpayments beyond the end of 2024, but it actually looks like this is from the end of July this year....!

It assumes interest rates are as they are now, but doesn't factor any interest for after some money comes out of a regular saver and a fix, so with the probable reduction in interest rates, I think it will level out. But it will be updated each month so I can ensure I remain on track.

It will be nice timing for July actually, because I can take the overpayments saved and look at a 1 year fix for them, but I'll see what rates are being offered at the time.

Plenty of moving parts, and other savings pots in places where they'll need to be moved out of for when they are needed.

First up will be some funds out of instant savings in March to pay the balance on a 0% card that I've been snoozing with which earns me a nice £274 in interest since the 0% period from a balance transfer in Feb 2023.   

Archerychick

Whoop another payment/month down!

This month I have allocated a full £700 to a overpayment savings account, as well as my usual monthly payment.

This means - 

• 20 payments left
• Mortgage balance £28.8k
• A total of £15.1k in savings which is allocated to the mortgage and includes accrued interest
• My spreadsheed now shows June being the last month where I allocate an overpayment to savings, based on expected value of savings at repayment date, so just 4 months of that. I'll keep an eye on it based on how interest rates change on savings, but I'll have more than enough saved elsewhere to cover any "shortfall". I'd assumed 4.5% on the accounts which are currently in fixes, which is probably about right.

Next month I have a regular saver that will mature (this actually currently has mortgage overpayments going into), and what's nice is they are still offering the same rate, so as soon as its matured and "closed", I'll open another. 

Aimingforthegoodlife

Oh this is very exciting! Not long to go at all, will pop back in to check how things are going!

Archerychick

Aimingforthegoodlife said:

Oh this is very exciting! Not long to go at all, will pop back in to check how things are going!

It really is, I’m loving seeing the payment countdown and seeing each £1k reduction

Archerychick

As we’re starting to see interest rates drop, I realised that we had £1.5k ish in instant access savings. Today I reallocated all the required remaining overpayments to the mortgage (£1,500) from general savings and then locked the £3k into a fixed for 12 months at 5.27% rather than the 4.84% it was earning and liable to change.

This months mortgage payment goes tomorrow so I’ll do a tot up then & share the balance! Think I should be getting close to the magic £10k. 

In the next month we have our regular saver maturing, which is about £3.9k + interest which I think it would make sense to also lock that away in a fix to protect the interest rate for the next 12 months. Will check rates on both ISA and none ISA.

Then that would be all the mortgage savings locked in, for at least the next eight months (have about £8k in a ISA fix too, so will decide what to do with that then that ends).

feeling like everything is in a good place!