Choosing your MF date?

Personally speaking, my husband and I choose our 'mortgage free' goal date when we remortgaged in November 2004. The mortgage we took out was a tracker mortgage which was 0.5% above base rate until Feb 07 and then would revert to the extortionate SVR rate.

So we decided that we would like to aim for Feb 07 to start with, then as time went on and we were doing well with our goal we decided to move the goal post to Sep 06 (which would co-incide with my 30th birthday).

We were lucky to meet our goal:D . In September the amount we had in savings just about exceeded the amount owed on the mortgage. We are going to pay it all off in Feb 07 and in the next few months we aim to save up a little bit more in order to have a small safety net ready for when the money is all handed over to the bank:eek: .

I think a good place to start is with Martin's budget planner to the left, plug in all your incomings and outgoings and see how much money you have left over at the end of the month. Then using this figure, play around with the overpayment calculators to set a realistic goal. You can always tweak it a little as time moves on or if your circumstances change. Best of Luck!

Well I am 32 now, and hope to be mortgage free before I am 45, however if any wee people come along, it will move to 50, as the house could accomodate 2 wee folk, but not 2 teenagers.

I apologise if this message goes on, but it may inspire someone.

Took out first mortgage in 1986. Increased over the years until 1992 when I divorced.

In 1992 started again with a 20 year £64k mortgage and an endowment. Increased mortgage in 1999 to £93K with a second endowment. Both endowments were due to mature in 2013.
In 2001 started getting warning letters that my endowments would not cover the mortgage. The endowments were costing me approx £275 per month. Decided to start putting some money away in a Maxi ISA.

In 2004, moved with my job to another part of the country and decided to remortgage by taking out a 20 year repayment mortgage of £149k fixed for two years. This took the pressure off my reliance on the endowments which I decided to keep going for a lump sum at maturity. Also decided to complain about miselling, but this was dismissed by the L&G.

Then in early 2006, I had what I think was my light bulb moment (aged 41). Others may disagree.

I decided to try and repay my mortgage earlier than the current completion date of July 2024 (38 years after first taking out my initial mortgage).
As it stands at present I will on paper be mortgage free by April 2008 (yes, 16 years earlier than originally planned).

How am I going to do it?

Firstly I created a simple spreadsheet which showed my outstanding mortgage, payments and interest charged, as well as the important timeline. By factoring in simple overpayments to save interest from money saved by scrutinising all outgoings (with a lot of help from MSE moneysavers) I brought my MFD date forward to March 2015. (A great start!). This included significant chunks being taken off by the endowments maturing in 2013.

Then I became obsessive about paying the mortgage off early:mad:

I decided to move to an Off-set mortgage when my 2-year fixed ended in July 2006. I obtained a rate of 5.09% fixed for five years with First Direct. Me and my partner opened three accounts to off-set against the mortgage and in return received £100 from first direct for two bank accounts (one of which is a cheque a/c), and a savings account.

At this point the madness set in. I decided to cash in my two endowments. I know the purists out there will be shouting at me in horror, but it realised over £36k (lump sum) and an extra £275 per month in overpayments. This allowed me to increase my monthly payments from £1100 to £1400 (at a push) each month. I also decided that my ISA had increased in value to approx £17k, so that got cashed in as well.

I also jumped onto the credit card bandwagon and secured £20k interest free for a year on two different cards. I currently make the minimum payments only, which in effect is money paid off against my mortgage capital and further reduces mortgage interest payments.

At this point I had a stroke of luck, L&G reviewed my misselling complaint (out of the blue) and although still not agreeing they had done any wrong felt there had been an administrative error during the case and awarded me over £4k compensation.

By April this year (before my off-set started) I worked out that I could be MF by December 2009 (14 years early). This date was based on other loans completing over the period and the monthly payments continuing into my off-set and included other things such as council tax (direct debit) holidays in Feb and March each year being reinvesetd.

I know, this is obsessive. It gets worse. My family, partner and three children (11, 9 and 6) were also getting in on the act. My partner was fortunate enough to get some free shares from Standard Life and we had religiously saved money for the children since each of them was born. As a family, (I was reluctant about the kids money, but perhaps easily persuaded), we decided to off-set this money as well. This amounted to another £15k. I have assured the kids that their money will be returned with a bonus, once we have stopped paying the mortgage using the extra disposable income we will have each month. We have also sacrificed our annual family holiday this year and next, but intend making up for it in 2008. The kids are already planning it.

Some of you may consider this last element of my obsession a step too far. What I say is that my interest payments have reduced from £650 per month fixed, to this month being less than £140, or from over £20 per day to less than £5 per day, and reducing all the time. I believe therefore, by the end of next year, my family will benefit hugely.

When my off-set started in July this year, my outstanding mortgage was £140k and due to finish in 18 years time (2024 - age 59). As it stands today, I will be mortgage free in April 2008 (age 43 and a bit). I think this is a result:T

One final loose end to tie up. Yes my off-set is fixed for five years and due to finish in 2011, so in effect I will have a mortgage on paper until then. However, becasue the money being off-set is in a savings account, it is money that will always be available to me for the duration of the mortgage term. Therefore everytime I get within say £5k of the mortgage total, I will draw down some of the savings and invest as a lump sum for the children or have a holiday or whatever else we choose at the time. I intend never to owe more than £15k or £20k each time paying a fixed monthly interest of about £70 or £80 each month. Seems like a cheap loan for anything.

Well thats my story, sorry it went on a bit, but I hope if nothing else it inspires someone out there.

To DRP2854, I really enjoyed reading your post. Most of your ideas are similiar to my own.

Good luck with it all.

Sue

Yes inspiring stuff DRP2854,

You don't sound to dissimilar to myself with the fact that I will do almost anything to help pay my mortgage off early and the non-essentials (holidays, new car etc) can wait. The only exception is that I have just the one son (17 months) and would never touch his money mainly because not all of it has come from myself or my wife but was gifts from others etc. I totally understand your reasoning behind it and the fact that your children have a larger saving pop and overall it does make sense.

Saying that, my son is one of the may reasons we are paying my mortgage off to give him/us extra some security. Ideally I would like my wife to 'have the choice' to finish or go part time when my son starts school if she so wishes or for that matter even myself. :cool:

Yes it can become obsessive and I'm always trying find/make extra money to put towards reducing it further. I guess I'm lucky as my mortgage is no where near the size of today's market but my house value is still worth 4 times what I paid for it as well as not paying 25 years of interest.

To sum up, I'll be 34 when I finishing paying my mortgage off in Dec 2008 and that'll be 14.9 years early :j.

What a christmas 2008 will be!