Mortgage free wannabe... In 15 years?!

PayOffTheLoans

Hi 

New poster here having just completed on my first and hopefully long-term home at the age of 37. I've bought solo but planning for my partner to buy in with me when I remortgage in 2 years, once his house has sold. 

My mortgage is pretty massive at £350,000 and the interest is 5%. 

I have been very inspired by reading all the diaries on here and my goal is to be mortgage free in 15 years.

My first task is actually to rebuild my decimated savings so I have an emergency fund. I currently have £4k and I'd like to have this at £10k before really targeting the mortgage. I'm sure I will be tempted to chuck some bits at the balance as just a small overpayment reduces the interest so much! 

Mark_d

Things can get more complex when you have a partner/spouse.
My partner and I have £260k remaining on our mortgage.  I could repay the entire amount now but my partner has significantly less savings/investments - so repaying the mortgage would bring about inequalities in our relationship.
My plan is to remortgage to an interest only mortgage.  This would mean less committed outgoings each month.  My partner and I will continue to pay equal shares of the monthly mortgage payments.  We can consider becoming mortgage free once we're both in a position to make an equal repayment into the mortgage.

PayOffTheLoans

Pay day today so spent some time moving money into pots including one for oil as the new home has oil heating. 

I don't think I will make much of a dent in the savings plan his month due to the eye-watering extra interest payment for the 2 weeks in August. Seeing how much of my payment is interest has made me even more determined to pay things off earlier 

Mark_d

5% interest on £350k means you'll be paying close to £1500 per month on interest.  It's a nice thought to be mortgage free but is it worth sacrificing your enjoyment of like now, just so that you can be mortgage free in your 50's?  I will be mortgage free by the time I retire in my early 60's but right now the priority is to enjoy life whilst I'm in good health.
Why spend the next 15 years saving hard for hard for a vision that you might never get to enjoy.

PayOffTheLoans

Thanks for the comments, Mark. I'm in a very lucky position where I have a very good monthly income so I can afford to pay more on the mortgage without sacrificing all my fun budget. I want to strike a balance. Life is short and I don't want to wait to enjoy myself. But 15 years is realistic for our circumstances. I am happy to be adaptable if I felt like I have the balance wrong

Re the complications with a partner - agree but we have a clear plan and open discussion about how we manage financially 

My plans for the future include an early retirement so the mortgage is part of that. 

PayOffTheLoans

September has been an expensive month so far! Lots of those little expenses of a new home. House has been mostly painted (not kitchen or bathrooms), garden tidied and carpets cleaned. I've set aside £2k for the bits that need doing and think I will come in on budget. 

Speaking of budgets, I spent some time going through my spends and I should be able to save my emergency fund target by February 2025 and then will focus on extra mortgage payments. I would like to round by payment up which will be a small £60 overpayment a month. Every little helps 

zcrat41

Sounds like a great plan. Will follow with interest! 15 years ago I now bought my first house. I paid off the mortgage when I moved in with DH but it’s changed my life in my 40’s having made sacrifices in my early 30’s. Good luck. 

PayOffTheLoans

Thanks for commenting! Will check out your diary 

Took a chunk out the redecorating fund with new carpets for the downstairs - £1000 was a bit more than I had hoped but they are big and slightly awkward rooms. Might have to readjust the budget a bit. Painting all done so we haven't got a lot more to do in the short term. I do have big medium term and long term plans for the house but need to live in it for a bit! 

PayOffTheLoans

Had a welcome bonus payment for some extra work I do. 40% saved in premium bonds to cover tax. My emergency fund is now up to 7k and I've added a little bit to the decorating fund. 

First mortgage payment goes out next week so looking forward to seeing a slight drop in how much I owe! 

My plan is to tidy any excess left at the end of the month into an mortgage overpayment pot which I will then transfer the next month if I haven't needed it. I have a budget so my salary covers all expenses including fun money but I'd rather the extra buffer for unexpected cost. I know this will cost slightly more interest but it's a marathon, not a sprint! 

I have lots of pots set up for regular expenses like fees for work, car expenses and hair cuts. Inspired by ynab but I didn't get on with the app. I find Monzo really helpful for this 

I've also switched my union to one where I can claim it as an expense against my personal tax allowance. It costs about £100 a year more but that is offset against the fact I can claim tax back on it. It's also got more resources so I felt it was a good choice 

Quiet weekend ahead as I'm on call for work so going to finish painting some old furniture and chill

PayOffTheLoans

Work was fine yesterday.

Managed to finish painting an old dresser that was left behind in the new house. It might need some touching up and needs a coat of varnish but I'm very happy with how it turned it. 

Otherwise did our meal plan and grocery shop which came to £96. It's just for 2 of us for the week so is an area I'm looking at ways I can cut this back.