£207,470.42 to go...! (now £395,000 to go!)

TheOpportunist · 21 February 2019 at 2:45PM

Afternoon all,

My motivation for starting my thread is that there doesn't appear to be too many threads out there with people looking to clear over £200k. I'm a 29 year old newlywed living in the South East. My wife and I bought our home with 10% down on a £240k property about two years ago. Our household gross household income is £70k, but with student loans and the like our take home is around £4k per month.

We fixed at 3.65% for 5 years on a 35 year mortgage :eek: I had secured a higher paying job at the time and the probation period would have put some banks off so we went with my partners bank without looking around. We even went through an extended approvals process too.

We were married late last year and our finances are now fully merged into one, which suits us just fine. Mortgage repayments on our house is £900 which atm is 2/3 interest, 1/3 capital repayment. Whilst this sounds like a lot (and it is) our previous rent for our flat/apartment was £6/700.

For a few months now we have been overpaying by £200 which has slowly started to reduce the amount of interest charged each month. Either way the mortgage takes up 1/4 of our takehome at present.

The dream for me is to be able to retire in 25 years time at 55 years old. I've got four and a half years on my wife and this stuff seems like its the distant future for her so I'll have to be the driving force. Retiring at 55 isn't going to be possible without clearing this mortgage first.

The biggest obstacles to overcome are:
- kids, we don't have any but we do want some soon
- renovating the bathroom and turning the en-suite back into a bedroom / nursery
- buying a second car (we current have a 3 door 1ltr runaround from new which is 8 years old but we could do with a second car, one that is family appropriate
- mortgage rates

On the last point, we fixed our mortgage for 5 years to see us through brexit - we have 2.5 years left to run on our term. Hopefully interest rates will not be too much higher at the end! Since we have been accustom to paying £900 - 1100 per month, the plan is to reduce the mortgage term rather than reduce the monthly payments.

That's enough waffling!

TO

Mortgage_Minimiser · 21 February 2019 at 3:49PM

Hi TO

Thought I would jut pop in to say hello and welcome.

I too have a fairly hefty mortgage, in two parts totalling £261k. I am doing this alone a single mum to a gorgeous 6 YO.... it can be done.

I am currently focusing on the original mortgage (£243,750 @ start in Feb 2015 and now at 187,395)

Look forward to cheering you on and seeing that number come down!

MM
x

K11m · 21 February 2019 at 4:13PM

hey!

Similar position here too but not in London, we have 224k to clear - started with 232K
My husband isn't hugely keen and really not a saver at all which is hard but regular screen shots of our mortgage account and the update MSE over payment calculator numbers over the past 12 months has got him realising i am not the fun police

My favourite thing is to round everything to zero - so with your figure I would call up and pay off the £70.42 out of my monthly 'spending budget' - last month I called up to pay £9.11 to make it a round figure the call handler did chuckle at me hehe

Good luck, plan and log and when you are feeling crap about it all give it a day or two and the motivation comes back again.

chelseablue · 21 February 2019 at 4:16PM

You're not alone, I still owe £215,577

Will be following your progress

FIREdoc · 21 February 2019 at 4:45PM

Just the post I needed. Very similar position to you guys, excited to read about your journey! And motivation to update my diary!

TheOpportunist · 21 February 2019 at 5:52PM

Ah, how nice of you all to join me in my boat!

For a little clarity I am outside of London too, along the coast near the IoW.

MM I have read a couple of pages from your thread and it's great reading I have to say, especially where you have calculated your daily interest.

Ours sits at £20.743 per day which reduces by .051 per month - 15 more months and it'll be sub £20!!!

I enjoy reading about personal finance so our finances are all in order with food budgets, petrol budgets, my wife and I get an allowance each week for guilt free spending (or saving). So this thread may not be as exciting as some others with those 'light bulb' moments.

The short to medium plan is as follows:
- turn the property back into a 3 bed by getting rid of the ensuite and turning it back into a bedroom/nursery
- turn the conservatory into an extension and make the kitchen/dining room/conservatory space open plan

This is something we want to do in order to enable us to put of finding our 'forever home' for that much longer and will hopefully fast track us into a lower LTV bracket. Our household income has increased by £15k in the past 2.5 years so hopefully by the time we come to remortgage any kids and home improvement debt will not affect our affordability. The interest rate needs to drop from 3.65% though!

K11m I like your rounding off idea!
The Mrs is getting adjusted to our new joint financing so I may have to start by rounding to the nearest £10, then £50 then £100 hahaha

Hi ChelseaB and FIREd! I'm about to shoot off home but thank you all for stopping by

TO

Tartan_Mum · 22 February 2019 at 7:45AM

Just a quick de-lurk from me. I am also paying off over 200k (and significantly older than you!) due to a house move last year. And we are very, very far from London as my name suggests! Maybe there are more of us than we think?!

Good luck! I’m subscribing and cheering you on :j

Mortgage_Minimiser · 22 February 2019 at 8:38AM

Morning...… I'm not in or around London - North West for me!!

Last day of the Half Term holidays... have a great day!

MM
x

CarbonImage · 22 February 2019 at 9:34AM

I'm a step behind you, currently paying off my starter home as hard as I can (at 26) with a view to getting a £200k+ mortgage with my partner in the next few years. So remember there is always someone jealous of your situation, no matter how scary it seems!

Will be following this with interest, 29 is a good age to get stuck into this stuff so I'm sure you'll make it!

AnotherJoe · 22 February 2019 at 9:55AM

TheOpportunist wrote: »

The dream for me is to be able to retire in 25 years time at 55 years old. I've got four and a half years on my wife and this stuff seems like its the distant future for her so I'll have to be the driving force. Retiring at 55 isn't going to be possible without clearing this mortgage first.

It could easily be*, but it won't be possible unless you've made significant pension provision. At the moment you are focussed on clearing £200k but you also need to be looking at accumulating perhaps a million or so in the pension by 55. Very doable but needs more focus on pension saving than paying the mortgage off since pension is 5x mortage !
So, what are you and your wife's pension plans? If you haven't heard of it I suggest looking at FIRE blogs to give you some ideas. And see that 55 is a modest ambition.

*Suppose by age 55 you still owe £50k on the mortage. That will be worth probabiy £25k in today's money maybe less. Pay £25k off over say 10 years is £200 a month, the size of a modest car PCP. Or your grocery bill, eg not much at all.

TheOpportunist · 22 February 2019 at 4:10PM

Thanks Tartan! It looks like we aren't alone.
I'll read up on your thread soon, congratulations on the house move - costly stuff I hear.

Afternoon MM, I had a realisation on the train home yesterday: Where my interest rate is 3.65% my daily interest is actually my outstanding balance with the decimal play shifted over. So when my daily interest rate drops below £20 its because the mortgage is sub £200k. I'm not sure if that filled me with enthusiasm or dread

Hi Carbon, your starter home, is this a part buy/part rent situation or your first property to get a foot on the 'property ladder'? My friends bought a cheaper house than use a few years back which made repaying easier and fast tracked them to a larger house with more equity.

It would have been lovely to do something similar, however with Brexit we opted to buy somewhere we could weather whatever storm came out way that we wouldn't outgrow even if we were in negative equity.

AnotherJoe I love the r/fireuk r/ukpersonalfinance subs on another popular forum.

The Mrs works for the NHS and I work in IT for the local government, both DB pension schemes. Come April I will have 2.5 years in the pension scheme whilst the Mrs has a year more I believe. That takes a lot of the risk out of our pension planning.

We are contributing £150 each to an ISA every month invested in 100% equities with Vanguard. The aim is to increase that contribution when we can afford to. This will be used to bridge the gap between early retirement and the retirement age.

55 isn't a strict age but it would be great to at least be financially independent by that age, pick up a lower paying, less stressful job for CostFI/BarristaFI.

We currently pay £44 per month for our first sofa and £350 per month to clear the remainder of our honeymoon. Both are 0% and will be cleared before the 0% runs out, however thats £400 that can be used elsewhere.

Chances are it will be used to pay for home improvements.

The Mrs' line of work allows her to work privately on the weekends if she wishes. That money is going towards a new car this year, and then the money after that will go towards extending maternity leave/mortgage repayment/etc.

Looking forwards it always feels like you are at the foot of a mountain, its easy to forget how far you have climbed to reach where we are. We have to remind ourselves every so often of when we were at Uni together and skint - even if it was a time of few financial obligations and getting drunk on wednesdays and Fri/Sat! We are in bed by 10:30 each night now!!

If you have reached this far - thank you! I am a rambler.

TGIF

£207,470.42 to go...! (now £395,000 to go!)

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