Free by 60?

judi24

Not been around for a looooong time! I was a DFW a number of years ago and pleased to say I am debt free now apart from my mortgage! 
I would love to pay off as much as possible over the next 3.5 years so that at 60 I can take my NHS pension and pay what is left and semi retire.

My mortgage currently stands at 144k  on a property with a value of around 380K and I think there is about 17 years to run (not planning on having it this long) 
I have some decisions to make about what to do when my fixed rate (1.3%) ends in June 2026.
I also need to get a grip on my spending. I have kind of lost the plot a little on this compared to when I was paying off debt and need to get my budget planned and under control.
I also am aware that life is short and I don't want to become a hermit so I can pay down my mortgage! I've been having a lovely life post covid but now its time to get some balance back!

I wonder if I can get Mortgage free by 60?
I want to use this diary as a way to record progress and thoughts around getting there, being more frugal again and still having a fabulous life! Can I do it? 

judi24

So some more info and thoughts!

I have some savings (22k) and could possible make that up to 40 k by June if I get a grip! Should I use this to pay off a chunk of the mortgage  before or as I mortgage of re mortgage the full remaining amount (140k ish) and then  overpay the new mortgage with interest from savings or given my age and plan to semi retire at 60 pay my savings into a pension reducing my tax burden and than use pension lump sum to pay of mortgage in 3.5 years!

So many options! 

Today is planning day! Been playing with budget too and hoping I will have about 2k a month spare  once I re mortgage and want a plan as to what to do with this? pension or ISA? 

I've spent so long with no money (single parent of 4 kids) so this having disposable income is new territory!

RedLipstick

Happy new diary! I'm sure you can do it! Sounds great, looking forward to hear about the plan, 1.3% is a lovely rate, fingers crossed it's not going to jump by a massive amount but it seems like you're on a decent LTV by now! Good luck!

Jackie1813

When we had decided to pay off our mortgage we first looked at how much we could overpay per month within the terms and conditions. We then overpaid by the maximum allowed in our case it had to be under £1K per month , we paid an extra £999.
When the term ended we paid a lump sum and took a 3 year fixed rate continuing to over pay. It took us 4 years in all to repay a similar amount to your balance.
We then relocated and downsized, semi retired and have cash in the bank. It has been 4.5 years now, I am 61 and my husband 64, it feels great not to have any debt at all.
Good luck with your journey to mortgage free.

judi24

Jackie1813 said:

When we had decided to pay off our mortgage we first looked at how much we could overpay per month within the terms and conditions. We then overpaid by the maximum allowed in our case it had to be under £1K per month , we paid an extra £999.
When the term ended we paid a lump sum and took a 3 year fixed rate continuing to over pay. It took us 4 years in all to repay a similar amount to your balance.
We then relocated and downsized, semi retired and have cash in the bank. It has been 4.5 years now, I am 61 and my husband 64, it feels great not to have any debt at all.
Good luck with your journey to mortgage free.

Thanks Jackie this sounds like an good option for me too. It's good to know someone has managed to pay down this amount in 4 years. My plan at 60 is to re revaluate where I am at with elderly parents and adult kids and possible downsize. I can invest my lump sum and between that and my pensions plus a little self employed work I should be semi retired! I will be looking for  2 year fix in June and sadly it will be a higher interest rate thank my current one but if I pay off the 40k then will only have 100k left! 

AgathaSquirrel

Happy new diary.

Sounds like you have some good options. How much of your lump sum do you hope to use on the mortgage? Presumably you intend to partially retire and continue to pay into your 2015 pension. You are also saving a good amount per month. It all sounds possible.

judi24

Thanks AgathaSquirrel. I'm not in the NHS anymore so my pension is frozen but can take the whole lot at 60. My max lump sum is about 120k and I have a smaller teachers pension which unfortunately ends at the end of Dec when we move onto a different provider which is not as good and a small workplace pension from one of my self employed roles. So i 'can' pay full mortgage off in June 2029 regardless of overpaying now. However Ideally I would like to keep the lump sum, invest and use it for income and for travel. It seems good on paper but I have had an expensive and great few years and need to regain some focus. 

judi24

So thinking about proactive approaches to managing my money better I have done a list! (love a good list!)
1. Set a realistic budget (and stick to it!)
2. Use a spending diary to focus on non required spending - (remind my self I need less stuff)
3. Use round up on my monzo bank account  (general daily spends account) to add a few pennies to savings on top of normal saving. Transfer these monthly to my ISA
4. Plan to max out my ISA by April by paying all my self employed income into it. Once I get to max start paying it into a Nest pension to reduce tax burden a little 
5. Just opened a Natwest account with a £200 switch bonus - will pay that 200 into ISA
6. Contact Tesco mobile to reclaim a fee they charged (been putting it off as I hate ringing them) pay it into my ISA
7. stop obsessing about the mortgage and also factor in some house jobs and personal adventures 
8. limit my extra jobs so I don't burn out (i find this really hard - people keep offering me work and I really struggle to say no - comes from years of being skint as a single mum I think) hoping having clear plan of what I 'need' to make my mortgage free early retirement a reality may help me say no!

Enough thinking for today! my head hurts! 
 

BestnamesRgone

Have subscribed, you sound very much like me! I decided I wanted to get rid of mortgage by the time I was 55 and took on lots of extra work. Fast forward and mortgage has gone and I have reasonable level of savings so decided I would semi retire, but still can’t say no to the extra hours on offer at work and taking on extra jobs too! 

judi24

BestnamesRgone said:

Have subscribed, you sound very much like me! I decided I wanted to get rid of mortgage by the time I was 55 and took on lots of extra work. Fast forward and mortgage has gone and I have reasonable level of savings so decided I would semi retire, but still can’t say no to the extra hours on offer at work and taking on extra jobs too! 

Thanks. Its good to know that someone else gets the issue and has managed to do what I am trying to do. I guess that being financially  under pressure for so long and then having more freedom takes some getting used to! I know I need to say no to some work and I hope that having a clear plan with definite numbers may make make it easier to say 'I don't need to take this job/ shift'? who knows! I'm hoping keeping track on here may help and learning from others will  definitely inspire me!

Mortgage_Minimiser

I will follow with interest.... 55 looking to retire at 62 latest also a single parent (still only 13) and a mortgage of £162864

Good luck!