Hopefully debt free before Mortgage renewal in June 2026

Tezzadp

jokono said:

When your mortgage fixed rate ends, you should be able to do a product switch without a credit check - assuming this is (partly) why you want to be debt free by then.

Why do you think you'd need to sell the house? 

Yes i will be able to stay with my current mortgage provider with no credit checks. My credit score is actually really good, in the high 800's. as i dont miss payments, i just have a number of them that eat up my income.

Im concerned because im currently on a relatively good 1.63% fixed mortgage rate. but since interest rates have risen sharply over the last 5 years since i took out my mortgage. The rate i will have to pay will be a lost higher, 4-5% or more depending on what happens to interest rates in the next year or so before my fixed rate ends. I know interest rates are slowly coming back down but not very quickly and they wont return to anything near to the rate i had previously. 

So im likely to be paying £200 - £400 more for my mortgage each month. And with the money i have to pay out on my debts each month i have very little money to live off each month even now without this huge extra expense to pay on my mortgage. So if i can pay off my debts, this will give me money that i can hopefully use to pay this extra cost and be able to survive. Otherwise i simply wont be able to afford upto £400 a month extra, as i simply do not have that much spare each month as it is. I know these figures are nothing for some people but i live on the bread line and im on min wage and dont earn a lot so i literally earn enough money to just about cover my bills, so adding another 50-80% onto my mortgage may make it unaffordable for me. Which would mean i might have to sell the house. I could then possibly downsize and get a house in a worse area and have a smaller mortgage and bigger disposable income. but im going to try and get the debts paid and see what rate and costs my mortgage will be and see if it is affordable when the time comes. 

Thanks for your reply. 

jokono

I think you're doing great for tackling this early enough and I wish you all the best. 

I'd stop paying the CC before selling the house though. Hopefully you won't need to do any. 🤞🏻

Tezzadp

Thanks, hopefully i have started early enough to be able to clear it all in time for when my mortgage is due for renewal. Yes i would only pay the minimum on the CC's if i hadnt paid them in time and hopefully still be able to afford the new mortgage amount too. But ideally id like them cleared to give me extra income to be able to survive off after the new mortgage payments start.
 
So today i got my car tax reminder in the post £190 !!!!  Due from February 1st. I wish i had a zero or £20 tax rate car, but its just an old banger that gets me to work and the shops and back, which is all i can afford right now and all i need for the time being.

I have decided to pay this monthly via direct debit, even though it costs an extra £9.50 over the year for the privilege, for two reasons 1. i simply havent got £190 to pay it off in one lump sum anyway. 2. the money is better off spent on my debt, saving me more money in interest on my loan than what it costs (£9.50) for paying this for the 12 months. First payment will come out of my bank at the beginning of February. 

No money spend today again
No direct debits from my bank today

Hastings loan daily payment : £1.12  - leaving a final payment of £54.22 in May 2028 = Balance outstanding now £2958.18

Tezzadp

Each friday i have a standing order for £40 to go into a saving account. i use this money to build up a bit of cash that i often have to use every few months or so for things like birthdays, car insurance, car MOT (and any expenses that need fixing in order for it to pass), any emergency that requires a lump sum of cash. I dont have a lot in this account, i think it is down to around £100 now after xmas as i took about £300 out to cover cost of xmas presents for family etc. I try not to look at how much is in this account if i can so i dont attempt to dip into it at any point. i only use it if i need to pay a big bill in one go. Hopefully i can build this up abit before i need to use it again for anything now that xmas is out the way. 

Another no spend day today  
No direct debits leaving my bank today 
£40 transferred into my saving account for emergency use

Debt payments 

£25 to Virgin CC = £1205 remaining 
£1.13 to Hastings Loan - leaving a final payment of £52.55 in May 2028 = Balance outstanding now £2957.05

Tezzadp

Todays debt payment

Hastings loan daily payment : £1.14  - leaving a final payment of £50.84 in May 2028 = Balance outstanding now £2955.91

Tezzadp

Another no spending day today   

and no Direct debts out the bank today with it being the weekend

Slowly saving the money up ready for the increase of debt payments that will build up steadily over time. 

Tezzadp

Todays debt payment

Hastings loan daily payment : £1.15  - leaving a final payment of £49.08 in May 2028 = Balance outstanding now £2954.76  

and another no spend day or direct debits out the bank today either   

Tezzadp

Todays debt payment

Hastings loan daily payment : £1.16  - leaving a final payment of £47.39 in May 2028 = Balance outstanding now £2953.63

No money spent today 

Direct debits leaving the bank today : 

£25 - monthly direct debit payment to the Virgin credit card. 
£21 - Broadband payment.

Weekly food shopping tomorrow on the way home from work, hopefully i can stick to my £30-£40 weekly budget again this week 

Tezzadp

Just checked on my credit scores to see how they are fairing ready for my mortgage renewal in 18 months or so:  

ClearScore is 893 out of 1000
Experian is 969 out of 999

Doing alright so far, hopefully i can get them up a little more before the mortgage renewal though and keep them there

fatbelly

Your scores will go up and down. Don't fixate on them