The Piano Diary

Good morning diary and all,

I’m feeling really motivated at the moment to get started on this. I remember feeling like this at the beginning of the debt free journey, figuring out the goal and how I was going to get there. On the mortgage front, several years ago when I changed career, I had to (chose to) extend the mortgage term to make the transition to a lower income more manageable. At the time, I extended it to when I am 65. Now I am debt free and also with a pay rise coming in August, I am ready to tackle this next phase of the journey.

I played with some numbers yesterday on a spreadsheet or two. I found that if I go for a 7 year term, then with 10% overpayments each year I can clear the mortgage in 5 years. This feels like a really motivating goal as it is close enough to make it feel real. It also means I will be 56 which means I hopefully get to achieve my early retirement goal sooner. I had also forgotten, don’t ask me how, that the overpayments will fall through the 5 years since the 10% of the outstanding balance will also fall. This new mortgage will be affordable and will allow me to also make my additional pension contributions and also put some money into savings for emergencies and a replacement car. And yet will not be so onerous as to compromise our quality of life. There is a balance here to achieve I think. Too much reliance on overpayments risks not achieving the goal since it is not essential to use the money for that purpose, so runs the risk that over time the focus drifts and the money leaks away to other purposes. On the other hand, too short a term would compromise life in the near term. I feel like this is about the right compromise for me.

Affordability calculation
We have more money available for mortgage payments since becoming debt free. Over the period of the debt repayment, we paid approximately £560 per month in debt repayments. In addition, the payrise will be worth £180 per month net after I have given 50% to the pension. This means I have £740 available for additional mortgage payments. If I add this to the current mortgage payment of £640 I get to £1,380. The mortgage payment for a 7 year term will be approximately £1,080 so should be affordable and give a little bit of fat in the budget.

As I know the day my mortgage goes out, then I have an actual target date of July 21st 2023!

Good morning diary and all,
We had a lovely few days on the coast, enjoyed the weather, did some walking, ate nice food etc. I have one more week at work and then we are both off for a couple of weeks. The car repairs cost £350 but hopefully that will get us a few more months of motoring without having to spend too much.

On the mortgage front, the application to reduce the term from 13 years to 7 years has been approved, and we have signed the forms and sent them off so that should go through in the next few days. The payment has gone up by about the amount we were making in debt repayments each month, so I feel really good that the money is going to a good cause as it were. Once that is done, I am going to switch to a 5 year fixed deal. Weird thinking that might be the last ever mortgage deal we have if all goes to plan! I am tweaking the budget to take account of this change and to manage various summer expenses. I have loosened the purse strings since becoming debt free and I need to ensure that we stay within our earnings!

Going out this afternoon with DS on a mountain bike ride at a nearby set of hills so looking forward to that.
Had a good piano lesson yesterday, steady progress is being made. May think about starting on Grade 3 pieces soon.

Have a great day all.