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    • SuperSecretSquirrel
    • By SuperSecretSquirrel 8th Sep 12, 12:07 PM
    • 696Posts
    • 3,090Thanks
    Onwards to freedom!
    • #1
    • 8th Sep 12, 12:07 PM
    Onwards to freedom! 8th Sep 12 at 12:07 PM
    Hello and welcome to my MFW diary. Not sure how often I'll update as I'm going down the boring 'increase monthly mortgage direct debit' route, not the more interesting to read 'random repayment as and when a bit of extra money is made' route. Still, no harm in starting a diary here, even if it's just for me to look back on in a few years time!

    It seems like a good idea to start with a bit of background, so here goes...

    We bought our house in July 2010 with an 87k repayment mortgage, fixed for 10 years at 5.29%. Nearly two years of 525pm standard repayments allowed us to rebuild our savings, but after 20 monthly payments (over 10k paid out) the mortgage balance had only dropped around 2.5k thanks to all the interest being paid...

    We decided to make a small start on overpaying - small overpayments early on have quite an impact over the long term so why not start small and ramp up later? March 2012 we made our first regular overpayment, 50pm. Amazingly, if we were to keep up with this 50pm over the life of the mortgage we'd be mortgage free nearly four years early (Nov 2031) and save ourselves a tidy bit of interest. Not bad rewards for just 50 a month!

    A few days ago I decided to step things up a notch. From next month the regular overpayments will increase to 250pm, 200 less will find its way into my long term savings (paying 2.8%, minus basic rate tax), 200 more will find its way to the mortgage provider. Makes a lot of sense looking at the interest rates! I'll keep on saving in a normal savings account though and won't be putting every penny into the mortgage - I'm used to seeing my savings grow monthly, and like to try to be prepared for any eventuality, so I'll keep on squirelling away a chunk of my income in savings each month. I know this isn't the most efficient option in terms of reducing interest payments, but it's a balance that keeps me sane, if there's any major disasters the savings are there to fall back on, that kind of peace of mind is well worth a few pounds! Anyway, here's where the numbers get really interesting - by overpaying 250pm for the life of the mortgage we'd be mortgage free nearly eleven years early (Oct 2024). Wow!

    Seeing the massive savings I started looking into this stuff in more detail. We're allowed to overpay up to 10% of the mortgage balance each year without penalty. I don't want to increase overpayments over 250pm right now, but maybe after another year or so of growing my savings I'll step up the overpayments to 500pm. Two years later the overpayment would need to drop to 450pm (to avoid penalty), year after that drop to 400, and the following year drop to 350, and the years after that drop to 250 at which level the op's would have to remain until the end of the fixed period (August 2020). If we were to follow this plan, at the end of the fixed period our mortgage balance would be around about 20k which we could pay off with a lump sum from savings. Mortgage free fifteen years early, at age 36, sounds awesome, and what's incredible is that it also sounds very realistic.

    At the moment overpaying is my project. OH and I have our own accounts that our wages are paid into, and a joint account that we feed monthly to pay the bills. As I earn a little more I also do the grocery shopping, pay a few extra bills, and overpay the mortgage. Beyond feeding the joint account OH's income is none of my business, it can be spent on whatever OH likes, same goes for my income. This works well for us - if I want to splash out on a new computer game or a night out or whatever I can do so without needing to consult OH, and if OH wants to splash out on a night out or clothes or whatever no need to consult me. We're both debt averse and savers by nature, so as long as we spend less than what's coming in and all the bills get paid all is well. I'm hoping that seeing the mortgage balance reduce might convince OH to get involved in overpaying the mortgage (or at least split savings into two pots, one 'spendable' short term pot for holidays and home improvements etc, and a long term one earmarked for paying down a lump sum on the mortagage), but there'll be no pressure, if OH joins in that would be excellent, but if not that's ok.

    Finally, I know life doesn't always go smoothly - anything could happen in the next 8 years, babies, redundancy, armageddon, "the best made plans of mice and men, often go awry"... But if things don't go to plan, nevermind, we'll have made a great start on the mortgage regardless, any overpayments we make early on will benefit us later on, so we may as well give it a shot while circumstances allow It's nice to remember that circumstances can go up as well as down too - maybe there will be payrises and good fortune along the way that make achieveing the target easier, who knows!

    January 2014 Update:

    Things have changed quite a lot since I first started this diary... The new aim is to hit the MFiT3 target of a 40k mortgage balance by end 2015, and to have 40k in savings by that time too, making us mortgage neutral 20 years early! Anything can happen, but I think it's time to aim high!

    March 2015 Update:

    We did it! We are mortgage neutral (savings balance higher than outstanding mortgage) and are locked in to achieve the MFiT3 stretch goal of mortgage below 40k by the end of the year I'm going to keep this diary going, the aim is total financial independence now!

    January 2018 Update:

    Paid the mortgage off in full today (12/01/2018)
    Last edited by SuperSecretSquirrel; 12-01-2018 at 9:42 PM. Reason: We did it! :D

    Mtg [2013 64k|2014 51k|2015 38k|2016 26k|2017 14k] Zero!
    MN [2013-25k|2014-2k|2015+16k|2016+34k|2017+52k] +56,615.31(MFiT4:+60k)
    NW [2013 126k|2014 156k|2015 190k|2016 228k|2017 269k] 278,659.39 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%|2017 18%] 30.9% (exc SP)
Page 3
    • Barbeduk
    • By Barbeduk 27th Feb 13, 3:02 PM
    • 816 Posts
    • 7,150 Thanks
    Good luck, I'm very inspired by your thread and so pleased that you're also going to enjoy life by continuing to have holidays etc.

    Keep up the good work!
    June GC 288.01/400
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 6th Mar 13, 11:11 AM
    • 696 Posts
    • 3,090 Thanks
    Hello tinkerbel, elantan, puregeordie, Barbeduk, and anyone else out there that might be reading this I've not been around for a few days so it was a nice surprise to see some new posts on my diary thread!

    tinkerbel, I think yours sounds like a great approach. I don't think anyone wants to look back in years to come and regret living life like a monk. If you keep spending on the stuff that matters to you, don't waste on rubbish that doesn't matter, and keep an eye out for good deals etc, you'll have that deposit saved in no time and still have fun

    elantan, I've not looked into matched betting again since I first mentioned it here. I did dabble a little a few years ago, but never made anywhere near that much money at the time. I keep talking myself out of it as I think I've used up the main easy starter ones now, and don't really want to get tied up in the complexity of milking the trickier ones. I'm sure I'll give it a proper go some day though. Out of interest, why did you stop - was it because you'd already got the first bet bonus from all the big names so there was nothing easy left to get?

    OH contributed an extra 50 OP at the weekend (current account leftover sweep after payday). Always a nice bonus to hear the words "I have a little extra left over that can go on the mortgage"

    First MFiT3 update is less than a week away. I've done some calculations and worked out at the end of the first quarter we'll be 37% of the way to our three year target! Sadly this is only due to the ISA raid in December, not something we'll be able to repeat again anytime soon, still, it's one hell of a good start!

    As for the unofficial mini target for this year (trying to get as close to maxing out the 10% allowed overpayment as possible), we still have a whacking great 6,503.82 overpayment allowance remaining at the moment. Will be interesting to see how close we can get. So long as we don't reduce the monthly direct debit, we'll manage 3,236.10 from the automatic monthly overpayments. That leaves an additional 3267.72 to find. An extra 326.77 a month for the next 10 months is quite a tall order, so we probably won't max out the OP's but it'll be interesting to see how close we get.

    Happy MFWing everyone!
    • elantan
    • By elantan 8th Mar 13, 11:57 AM
    • 19,693 Posts
    • 53,063 Thanks
    the reason i stopped was like you i had done loads ( made a good few thousand ) but it was getting to the stage i was having to place bets of a few hundred just to make 30 or so and i had spent the couple of hundred so didnt have anything left to bet with.

    the bet would have to then have been played through a few times in order to finally extract the cash, so at the end of the day i was having to bet thousands of pounds and getting about 20 for my effort, it stopped being worth it for me at that point ( and i didnt have the money anymore anyway)

    if you havnt done it and you have the chance to make a good quick killing then i would recommend it, but depending on how much you did you could be at the stage i am at, i got as much as i was comfortable out of it and decided it was no longer of use, but i will always be grateful for it, my all expenses paif holiday to Thailand still holds wonderful memories for me, and it was all thanks to matched betting

    now if i had used it to pay off the mortgage, i would owe much less, but then i wouldn't have had that amazing experience so i have no regrets
    march 2011-july2019 8 years and 4 months ... or 100 months and counting
    "what would you do if you knew you couldn't fail.... enjoy the adventure" " to my own self be true"
    • brenda10
    • By brenda10 8th Mar 13, 2:34 PM
    • 317 Posts
    • 317 Thanks
    Supersecretsquirrel -YOU ARE BRILLIANT
    Brilliant you are doing great, have read your blog from beginning ot end. I lost my job through ill health in 2005 an dhad a mortgage with my husband, he was on low pay and it was so difficult. I saved small amounts and cut back on everything, researched best value for house insurance to car insurance, food, bargains in each shop if all in same locality. I had a mortgage of 60k, I was overwhelmed but didn't look ahead. My husband was 58 and we had 7 years unti he was 65, we had a 9 year mortgage on my name because i was younger but unable to work and earn my 28k salary, his 12k, daughter to help through university away from home, she took out loans, I paid for flights and small tokens. I have managed over the past8 years to save like I never knew how ot save and have the remaining 36k saved in a 4-2% newcastle buliding society 5 yr bond , this is the money I owe on mortgage(variable at 1.5% now and I made sure when I took it out I paid a little extra so that i could pay it off completley at anytime without any extra charge. I have also managed to save 26k as well, it is also is partly in ncb sic and isas, making more in isas than clearing mortgage so will continue to do so until interest rates rise. Now i have saved a little towards my daughters lump sum and she is saving now she has a job and has learned so much from me with martins money tips, at 23 she is very money savvy, she gets food allowances, stays in hotels etc with job, has no expenses unless on personal items, her boyfriend has got a job also and althought they have approx 25k of student debt each from rent, food etc they are saving as student loans are the cheapest loans they could ever have. they are hoping to save at least 10-15%, it is hard but they have started and I will help a little to encourage them. Good Luck and it is so great to read your blog. You can and will do it....I am 52 now and cannot believe after years of debt I have been forced to save and am so glad I have done it, we still enjoyed life but didn't waste.
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 11th Mar 13, 7:54 PM
    • 696 Posts
    • 3,090 Thanks
    Hi elantan, I didn't make thousands from matched betting, I stopped when in the hundreds, so it seems there should be more left to milk... I have no excuse other than laziness and fear of making a costly mistake. I'll keep it in mind for the next time I have some spare time, thanks

    Thanks for sharing your story brenda10. Sorry to hear about losing your job through bad health, but it sounds like you have done an amazing job taking charge and also helping your daughter with being just as switched on! OH has paid off student loan in full (not ahead of time though, just as a result of being a smallish loan and standard salary deduction payments), I still have about 8.5k remaining on mine. Every now and then I think about paying it off, but honestly it should be the last thing I do, mortgage at 5.29%, savings at 3%, why pay off such a cheap loan? I'll just let the automatic salary deductions take care of it slowly, then when it's paid off the extra income will just be a nice bonus

    Just checked my balance for the MFiT3 challenge, 73,242.52 - happy with that! Full update here
    • tinkerbel
    • By tinkerbel 11th Mar 13, 9:23 PM
    • 1,790 Posts
    • 4,903 Thanks
    Keep going Squirrel!!
    Need to start cracking down on my spends over here as a big credit card bill (DD set up to pay in full each month) has shocked me a lot today!!

    73k in 3 years I'm sure you can do it!!
    • tinkerbel
    • By tinkerbel 29th Mar 13, 11:25 AM
    • 1,790 Posts
    • 4,903 Thanks
    How's it going Squirrel? Any more OPs?
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 1st May 13, 12:50 PM
    • 696 Posts
    • 3,090 Thanks
    Hello moneysavers!

    I've been awol for a few weeks, there's been nothing exciting to report really.

    Since my last post we've paid the standard mortgage payment of 476.39, plus the usual 323.61 direct debit overpayment, and a further 165.72 in ad hoc overpayments (sold a few things, and swept my payday current account leftovers into mortgage). OH gets paid today too so hopefully a little extra will be swept in this evening.

    I calculate the current balance to be 72,830... Really annoying that the balance has dropped by less than the standard payment amount, stupid interest Oh well, the more we overpay the less interest we pay in the long run, so we've got to keep at it

    We're on course to get the daily interest below 10 by the end of this year, the monthly 800 direct debit alone will take care of that. I also want to max out the 10% overpayment allowance for the year. We currently have 5,690.88 remaining, and after the automatic direct debit overpayments are accounted for the remaining allowance for the year is 3102.00. I'm hoping to manage that without raiding savings this year, sell some more stuff, keep sweeping in payday leftovers, and make a little extra cash. There will probably be a bit of a shortfall that we'll make up from our savings, but the aim is to make as much extra as possible and minimise the shortfall.

    I have an official mfit3 target for the end of 2015 - mortgage balance of 60k. My ridiculously ambitious but not impossible target for end 2015 is to be mortgage neutral. I'm not a fortune teller so don't know what the future holds, but my spreadsheets tell me that if everything goes perfectly over the next two and a half years we could achieve a 60k balance towards the end of 2014, and be under 50k by the end of 2015, by which time I hope we'll have 50k in savings. There's a lot that can change between now and then, but aiming for the stars and reaching the moon beats never getting off the ground, so where's the harm in dreaming

    Hope you're all winning in the battle against the mortgage!
    • ShALLaX
    • By ShALLaX 2nd Jun 13, 5:35 PM
    • 107 Posts
    • 150 Thanks
    Is it really worth keeping so much in savings? I know you may get penalised for going beyond your annual 10% overpayment limit, but would it not save you more in terms of the interest saved?

    Keep enough in savings to get by for 6..12 months with no income, spend the rest on debt.
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 6th Jun 13, 8:28 AM
    • 696 Posts
    • 3,090 Thanks
    Hi ShALLaX

    With an ERC of 6% payable on anything over the 10% allowance, mortgage rate of 5.29%, and savings interest of about 3% on average, I think paying over and above the 10% annual overpayment allowance would cost us more than it would save.

    There's also the fact that we may well end up not paying off this mortgage with savings, rather putting down a good deposit on a BTL. The feeling of just having "money in the bank" is nice too

    If we manage the full 10% allowance over the next three years, we'll then consider paying a small fee to reduce the term, which means our 10% op allowance will go a lot further in subsequent years. Then, when we near the end of the mortgage and the ERC percentage drops to a level where lost savings interest and ERC% vs rate% means it makes sense, we might pay the ERC to pay off in full, or just keep a small mortgage and invest in a BTL.
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 12th Jun 13, 8:58 AM
    • 696 Posts
    • 3,090 Thanks
    Just posted my second MFiT3 update, mortgage balance is now 71,500 exactly.

    We're going to have to focus a bit more on the mortgage if we're to max out the 10% OP allowance for the year. 4,888.78 remaining, and just six and a half months to go!

    Expecting payment in the next few days for some freelance work I did recently, so that should make a nice dent. My regular saver account is about to mature too, so the 100 or so interest I get from that can come off the mortgage soon as well

    One potential spanner in the works is that we've been seriously discussing reducing our mortgage term recently. Having paid an automatic 800 per month for the past nine months (standard 476.39 plus 323.61 op), I am satisfied that it's the right thing for us to do. OH has agreed to go along with whatever I think is best provided there's no pressure for extra payments on top. So, when on the phone to the mortgage company earlier, I requested the term amendment forms be sent out in the post. Our standard monthly payments will soon be around the 800pm mark, overpayments over and above that will obviously be smaller. End result will be paying the morgage off sooner and cheaper with no ERCs and a reduced amount of interest paid over its lifetime It's the right move for us, but it means hitting that 10% op allowance will be pretty much impossible without another savings raid!
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 15th Jun 13, 2:27 PM
    • 696 Posts
    • 3,090 Thanks
    I just received payment for some freelance work I did a couple of months ago. I've put some to one side so I can pay the tax man his cut when the time comes, and the remaining 499.99 I've spent overpaying the mortgage (500 or more reduces the monthly payments, 499.99 or less comes off the capital without altering monthly payments).

    Mortgage estimate today: 71,031.10 (spreadsheet calculated, not official balance)

    Feels like a really good start to the third quarter of my MFiT3 challenge Best part is I've been doing a bit more extra work recently so I'm hoping this could become a regular thing Not counting my chickens just yet though...

    The mortgage term alteration form arrived in the post this morning too, so I'll try to get that filled in and sent off this weekend.

    Hope you are all doing well in your quests to become mortgage free!
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 17th Jun 13, 10:21 AM
    • 696 Posts
    • 3,090 Thanks
    Regular saver account has just matured, netting me a nice 124.36 in interest - off the mortgage it goes!

    Todays calculated balance is 70,927.33

    Looking forward to getting the balance below 70k and daily interest under 10!
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 29th Jun 13, 6:33 PM
    • 696 Posts
    • 3,090 Thanks
    Well, it's official, the mortgage term has been altered... Our new end date is July 2022, a reduction of 13 years!

    The minimum payments have near enough doubled and now stand at 828.48 a month, but provided there are no major disasters around the corner that shouldn't be a problem. I still hope to overpay a little extra whenever possible, so the real mortgage end date will hopefully be even sooner than 2022.

    I need to come up with a new MFiT3 challenge target now, 60k by the end of 2015 isn't a great target considering our new minimum payments will get us down to 55k by then I'm thinking of aiming for 50k, but maybe I should be more ambitious that that... Watch this space
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 10th Jul 13, 8:39 AM
    • 696 Posts
    • 3,090 Thanks
    New super ambitious MFiT3 target has been set!

    Reduce balance down to 40k by December 2015! Also keep building savings to try and become mortgage neutral asap. It's going to be tough, but a challenge isn't a challenge if it's easy
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 15th Jul 13, 8:51 AM
    • 696 Posts
    • 3,090 Thanks
    I've overpaid the mortgage by 499.99 this morning... According to my spreadsheet, mortgage balance is now 69,985.12 - got past the 70k milestone sooner than expected!

    Here's an extract from my mortgage terms:

    "Overpayments of up to 499.99 will be applied to your mortgage account on the day of receipt. This will reduce your balance and we will recalculate your interest in line with your account terms and conditions, your monthly repayments will remain the same. If you overpay by more than 500 your monthly repayment will be recalculated, however you will also have the option to have your mortgage term recalculated. Please advise us if you would like your mortgage term to be re-calculated. Charges may apply."

    I have tried on many occasions to have our account set to 'reduce term if overpaying 500+', not the default 'reduce payments if overpaying 500+'. The call center staff are either in dire need of training, or are being deliberately obstructive. On at least three occasions they have failed to do what I asked. Getting to a branch is not that easy, though if this months experiment fails I'll have no choice but to make the extra effort to get to one and just hope the staff there have a clue about their own products...

    Last month I overpaid 499.99 one day and 124.36 a couple of days later, unfortunately a few days later I received a letter specifying our new reduced monthly payment amount. I was not overly impressed, but as we were formally reducing the term soon after it made no difference. I guess it's possible that payments so close together might easily get lumped together and considered a single overpayment over 500.

    This month's experiment is 499.99 today, and hopefully a nice extra 'current account leftovers' OP just before payday (in two weeks time). If they mess that up I'll have no choice other than get to the nearest branch and try to get it sorted out properly! If it goes smoothly though, I will leave things as they stand and just be careful to leave a big gap between OP's, the reason being I most likely will want a large OP to trigger an automatic recalculation of monthly payments eventually, and this way I'll be in control, not relying on other people to get things right twice - once to switch to term reduction, and again to switch back later on. Experience has taught me I'm better off relying on myself getting things right than the mortgage company!
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 29th Jul 13, 8:16 AM
    • 696 Posts
    • 3,090 Thanks
    Up until five minutes ago I had enough physical cash on me to last til payday, and 100.27 in my current account... I now have 27p in my current account, and the mortgage is 100 lighter

    Got a few big spends coming up over the next few months (some were expected and budgeted, but not all, far from it!), and am already kicking myself for setting quite such an ambitious MFiT3 target. Nevermind, it's better to try your best and come up a little short than not try at all. If we aim for 40k, and "only" achieve 50k, that's better than the original aim of 60k, and even better compared to the non-overpayment balance year end 2015 which would have been over 77k! Looking at it like that, not meeting your target isn't so much of a failure

    Hope you've all had a good month chipping away at your mortgages!
  • TheFactory
    Hi SSS,

    Your financial arrangements with you OH are exactly the same as mine and TBH I think thats the best way to work things
    • kitjos
    • By kitjos 29th Jul 13, 4:47 PM
    • 184 Posts
    • 1,061 Thanks
    Just read through your diary ~ your doing a fab job!! Was in anticipation whether you would see 69k instead of the horrid 70's .

    Well done!

    Will hopefully follow along with your progress till you reach 0

    "Don't underestimate the value of financial security"

    2018 saving challenge (#136) = 3,500 / 12,000
    Total savings = 9,500
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 15th Aug 13, 8:41 AM
    • 696 Posts
    • 3,090 Thanks
    Hi TheFactory and kitjos, thanks for stopping by

    Another 499.99 overpayment today... That brings the total outstanding down to 68,828.82.

    Not only that, but I've also achieved another milestone - interest is now under 10 a day (9.98 to be exact)

    These big monthly OPs aren't going to last forever. I know I'm going to have to reduce the amount of freelance work I do soon, and life is about to get a whole lot more expensive, but in the short term I'm going to try to pay off as much as possible.

    Having achieved daily interest below 10, I think it's time for another minitarget... I want to get the outstanding total below 65k by the end of this year Having accounted for interest, that means paying in around 5k in the next four and a bit months I'll give it my best shot
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