How to be mortgage free after 8 years

Woby_Tide

I read it all and my comment still stands, that the main gist of how the OP is repaying a mortgage in 8 years(note the topic is actually titled about paying a mortgage off in 8 years) isn't about being prudent and paying off your mortgage early in general it was explaining how a single contributor is going to be able to be mortgage free in 8 years by paying an amount that I would imagine to the majority of posters on these forums is in the realms of fantasy. The general advice about chipping away where you can is good as I said.

It's all very reminiscent of the thread on the gas and electric board where a poster had a gas and electric bill of about 3p per year by living in the cold using matches for light etc. Yes it's possible, but for the majority of people, wholly unrealistic.

Thefunkygibbons

I take the point, but it does not look like I can edit the title

I should have called it

"In answers to questions, how I have managed to be mortgage free after 8 years"

I also conceded that I am very fortunate in having a high salary

However, when I moved into this house, the mortgage required was £175k. If it were not for the fact that I have done capital payments on the previous house it would have been double that, and therefore the monthly mortgage would have been £1500 or thereabouts

Regardless of the sums involved, the principles work

For example

If I went back to the beginning of this mortgage, the monthly payment was about £750, and it is the overpayments that have reduced it down to £500 approx

So compared to the amount, I now pay, I would have £1,900 a month to spend on me

Well that would not be hard to blow if I made different choices

Meals out for me and wife forthnightly £120
Baby sitter (never had one ever) £20
Sky premium package £50
Drink (both TT as it happens) £100
Gym membership £50
Expensive holiday (2 weeks, 7 ppl at £1k each) £500
Lotus Elise Sports car £500
High fashion clothes £250
Bling £100
Cleaner (even with 5 kids we do it all) £100

It would not be that hard for me to justify any of the above (Hey, I've got the money, you only live once, keeping up with the Jones etc)

My point was, in my fortunate circumstances, I made the choices set out in my original post and I will be mortgage free after 8 years

I can see a direct link between the advice that is given to help people get debt free and the advice that I follow to be mortgage free

Prioritise what you need to live on and spend the rest on driving down debt, and as I said have a grand reason why.

rchddap1

Well done you. Unfortuantely I'm nowhere near the position to make a decent over payment on the mortgage. If only I could make an over payment of £1000 per month (or more).

meanmachine_2

rchddap1 wrote:

Well done you. Unfortuantely I'm nowhere near the position to make a decent over payment on the mortgage. If only I could make an over payment of £1000 per month (or more).

But it's easy. Haven't you been listening/reading?

You need a well paid job crunching numbers, on a salary enjoyed only by 0.005% of the population, forego certain pleasures for 8 years and you can shortern your mortgage. Then presumably do it all again on another mortgage, until you die.

Keep up boy!

To the OP I would say well done to you. Seriously. I like tight !!!!!!, as I'm one too. If the debt free wannabes followed your example, then there wouldn't be any debt free wannabes and I'd have no one to make me feel superior.

Thefunkygibbons

TFG adds fuel to fire

I would say that money saving is a state of mind

It is just as hard to maintain that state of mind when you have money as when you have none

When I was a student, I had a grant of less than £2k a year, but when I left Uni, I had a small positive bank balance, unlike most of my peers

[I don't think I could do that these days and I pity current undergrads]

However, the lessons I learnt back then I still apply, which is why I every six weeks I shop at Booker and buy household essentials at wholesale prices

It has nothing to do with absolute sums of money, more with state of mind

madfrenchgirl

I think he made the point to prove that just because you eanr more money does not mean you have to be less wise with it!

I totally agree with it.

My father was bringing home 2k before tax a month. My parents paid off their mortgage within 5 years. (the flat was worth 55k). I was the only kid, and we were licing like people on the minimum wage should have lived (not that they do live like it).

Even when my dad was bringing 3k a month we were still living low. I never bought brand clothing, my mom neither, we were shopping in "bankruptcy, end of stock, discontinued" shops, my mom was doing everything old style and we only went out when family was around.

Mind you, their moneysaving ways were driving me nuts sometimes as there was all work no play.

Now I have found a balance, and I moonlight a bit to compensate for going out to the piub once a week without having to dig in my potential savings.

I cook everything from scratch. I am on MSE all day.

I am earning 1145 a month, paying 300 rent, 80 on food, the rest is going out and misc, and petrol and car. I manage to save on average 500 a month.

My friend earns the same money, pays 250 rent, 200 on petrol, 100 on food. She always complains that she never has anything left at the end of the month. She likes expensive clothes though and never cares about money, plus she goes out all the time and goes on weekends ina BB alnmost twice a month.

I wish I had the 25K type of salary, I wish my career was going better and I am truly working on it. I am a tad jealous of the OP, but it is not a reason for me to bash his advice, especially if I apply them to myself. The only difference between me and the people who bashed him is that I admit I am jealous of that type of salary. I perfectly know I am only 23 and still some road to do before being there.

If you had not guessed, i am saving up with my partner for a deposit for a house. If everything goes well we might be able to put down a 30k deposit in 2 years time (that s including all my savings from when I was a toddler).

budgetflyer

Im doing pretty much the same but on a lesser scale. I am on a discounted offset with Standard Life. Every 3 years I can phone for a new 3 yr stepped discount which is automatically applied at no charge,no form filling (just a signature) no survey or solicitor fees as its just applied to keep my business.I am increasing my payment into the offset reserve 15% every year and if remain on target ,should be a FREE man in 7 1/2 yrs . Difference is I still like my excesses so I havent went crazy on the overpayment,just what we dont miss.
By putting it into an offset, I get the overpayment benefit but the money could be back under the mattress if I needed it within 10 days.
This I feel is where you (thefunkygibbons) need to look seriously at. OK you're in a good job,paid a lot etc etc. It could change in a flash.HOW QUICKLY COULD YOU GET YOUR OVERPAYMENTS BACK?
The correct offset product will do what your mortgage does but with the benefit of easier access to your overpayments.

Thefunkygibbons

I see what you are saving

But I do have a rainy day fund, a cash mini iSA, and an index tracker so I have options if things went pear shaped

I tend to find that the rates on offset mortgages are not as good as a straight mortgage

basill

Thefunkygibbons wrote:

I tend to find that the rates on offset mortgages are not as good as a straight mortgage

I did some sums at the last remortgage and found to my surprise that the offset mortgages available required an offset balance of nearly £30K before the term became shorter than a similar straight repayment with discounted rate. This was entirely due to the substantially higher interest charged on the offset mortgage.

B

Petal_3

Hi there Funky!

Well....I'm one of the people who PM'd you asking how you did it. Was just curious (and envious). Obviously I'd realised you'd made overpayments (I'm planning to do the same) and wondered about your situation....thanks. It's a shame you're getting flack for posting what you were asked to post. You've worked hard, you earn well....you deserve it! :T I always have repayment mortgages (I like to know exactly what's what). Unfortunately at the mo we have debt but have plans to clear this at lowest int. possible, blah blah. As soon as I'm able I will set up a regular overpayment (I can overpay max. of £500 pm without penalty) I will. Although it will be no where near the max....sadly

So, thanks for your post and to all the hecklers (or is it just one...lost track)...Funky Gibbons isn't saying ner ner ne ner ner....he just posted what he's been asked by those of us who PM'd.