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    • VDOT47
    • By VDOT47 30th Oct 17, 1:32 PM
    • 121Posts
    • 349Thanks
    VDOT47
    Mortgage Free by 55
    • #1
    • 30th Oct 17, 1:32 PM
    Mortgage Free by 55 30th Oct 17 at 1:32 PM
    Hi all,


    As the title would suggest, my aim is to be mortgage free by 55! Having read through a few diaries on here, I thought that starting my own might help me to keep focussed.


    Right, background info! I am 35, OH 32 and DD 2. We moved house earlier this year, with a mortgage of £269,995 (with fees). We are on a 25 year mortgage with an initial 5 year fix at 2.19%, meaning repayments of £1169.xx per month.


    I have just registered for online banking, so once the passcodes come through in the post I will find out the exact balance, but I estimate we are currently on c.£264,000 with a repayment date of Feb 2042!!


    I don't intend to do a full SOA at this stage (maybe in the future) but will say that we are in the fortunate position that we can currently put £550 pcm into regular savers and have current easy access savings of c£7000.


    The aim over the next 12 months is to get the savings up to £15,000 (from the regular savings accounts maturing and also from a bonus I should get from work next summer) and keep that as our emergency fund. From that point, whenever a regular saver matures (or I get a bonus) I intend to stick that directly into a lump sum overpayment, unless the emergency fund needs topping up of course (which it will do, as we need to do a couple of bits and pieces to the house still over the next couple of years).


    In the meantime, I intend to make ad hoc overpayments as and when possible, hopefully averaging about £100pcm.


    My motivation for this is of course to be mortgage free by 55 in order to then make saving for retirement easier (I have a work pension but not much else, although OH runs her own business which hopefully would have value when we reach retirement or could be passed to DD if she wanted to run it), but in the interim it is to allow us to build up as much equity as possible so as to be able to move again within 5 years.


    The reason for this is twofold:
    1) We always intended that this move was another step on the ladder, rather than our 'forever' home, and we originally thought we would live here for 10 years then move;
    2) However, we (well, I in particular) are not happy where we have moved to. The area is SO noisy throughout the day (and during the evening over the summer too) with children shouting and screaming and frankly the noise is doing my head in! Also, we are in a semi so there is some noise through the wall too.


    Think that is enough to start with, any comments would be welcomed and I will hopefully post a little more in due course!
Page 1
    • Trixysticks
    • By Trixysticks 30th Oct 17, 2:59 PM
    • 35 Posts
    • 51 Thanks
    Trixysticks
    • #2
    • 30th Oct 17, 2:59 PM
    • #2
    • 30th Oct 17, 2:59 PM
    Welcome VDOT47!

    I will join you on your journey, I'm in a similar boat- 29 with £138,000 to clear and an emergency pot I'm frantically trying to build! Impressed with where your savings are; I hope I can get to that point!

    Your comments about your home made me smile. DH insists we are in our forever home but a year after buying our lovely terraced town house and I'm dreaming of a remote detached house in the woods...far away from everyone!!
    April 2016 Mortgage- £160,000.00
    October 2017 Mortgage- £138,322.06
    • ChipAway
    • By ChipAway 30th Oct 17, 3:39 PM
    • 5 Posts
    • 12 Thanks
    ChipAway
    • #3
    • 30th Oct 17, 3:39 PM
    • #3
    • 30th Oct 17, 3:39 PM
    Hey, your mortgage size and ambitions to pay it off sound similar to mine. Good luck with it! I'll be following your progress.
    Mortgage free wannabe: Start Oct 2017: £264,648.77. Original end date Oct 2040. Aim: Oct 2032. OP to date: £2550.
    • VDOT47
    • By VDOT47 31st Oct 17, 9:41 AM
    • 121 Posts
    • 349 Thanks
    VDOT47
    • #4
    • 31st Oct 17, 9:41 AM
    • #4
    • 31st Oct 17, 9:41 AM
    Hi Chip - yes, your mortgage sounds almost identical in size to ours!


    I have been having a think overnight at things we can do to make ad hoc overpayments, without having to go completely frugal (I know this may contradict the general ethos of these boards, but we don't want to go completely without now in order to save a few months of mortgage payments in 15/20 years time!):


    1) Any cashback through our bank account
    2) Reduced nursery fees (already slightly lower now DD is 2, and will come down again in Jan 2019 being the start of the term after she turns 3 and becomes entitled to the 'free' nursery hours)
    3) NCT sale proceeds
    4) Online surveys (although neither of us have much time for these, but the odd one here and there will help)
    5) Selling old toys and other unwanted junk from the garage/loft on Facebook or similar selling sites
    6) Any refunds from gas/electricity supplier, as I hope that we can get ourselves into a credit situation
    7) Cashback on utility and insurance switches
    8) Cancelling my current £10pcm iphone insurance (this is a priority)
    9) Any spare money in our joint account at the end of each month
    10) Any pay rises can go directly to overpayments


    That's a few things to be getting on with!
    • greent
    • By greent 31st Oct 17, 10:02 AM
    • 7,073 Posts
    • 72,066 Thanks
    greent
    • #5
    • 31st Oct 17, 10:02 AM
    • #5
    • 31st Oct 17, 10:02 AM
    Hello and welcome When paying off our mortgage I rounded up our monthly DD (so in your case I'd round from £1169.xx to £1200 - most mtge companies are happy to take a larger DD ) and then made ad-hoc payments of cashback, NNS sale monies, flebay monies etc. I also had a piggy-bank where all the shrapnel change would be saved (and £2 coins) and would pay this off too (I started by bagging it and banking it and then started spending it in the self-service tills at supermarket every month or so and rounding the amount up spent and paying that off - so if I spent £28.31 of change I'd make an OP of £30, etc) - lots of little ways to make extra payments (which really do add up!) without feeling deprived. Plus once you have online access to your mortgage, it becomes slightly addictive seeing all the little payments go through the account

    We're doing it slightly different with BTL mtge, as we have other priorities too - and a big car loan and a new kitchen to pay for - but plan on upping the ante this time next year

    Whilst your house might seem noisy now, things might change in a couple of years as others move/ neighbourhood children grow (teenagers are - in my experience- far quieter than smaller children! )
    I am the master of my fate; I am the captain of my soul
    Repaid mtge early (orig 11/25) 01/09 £124616 01/10 £104927 01/11 £89873 01/12 £76317 01/13 £52546 01/14 £35356 01/15 £12133 07/15 £NIL
    BTL Mtge 12/16 £69786. 2018 OPs (#18) £1068.37/£4000
    Net sales 2018 £519.32/£1000 PAYDOX18 (#15) £18459.38/£18918.90
    • VDOT47
    • By VDOT47 31st Oct 17, 10:32 AM
    • 121 Posts
    • 349 Thanks
    VDOT47
    • #6
    • 31st Oct 17, 10:32 AM
    • #6
    • 31st Oct 17, 10:32 AM
    Thanks Greent - I like the idea of rounding up the DD, as I don't think we would really notice the additional £30.xx going out each month. We have a piggy bank for loose change, so will occasionally use that to make overpayments too.


    Looks like you did fantastically well to pay off your mortgage 10 years early!


    I had a quick play on the overpayment calculator, and estimate that if we stayed where we are now, then even without taking into account any future pay rises/bonuses/possible reductions in interest rates when remortgaging due to having a better LTV, we could pay off the current mortgage by 2031 (and I would hope to do it faster than that) but we would still be in a house which wasn't our dream forever home, so it is likely we will do what we can to reduce it in the next 4/5 years, then move and borrow more (!) and then work to pay that off ASAP (hopefully by 2037, which would tie in with the title of the thread!).
    • louloubelle79
    • By louloubelle79 31st Oct 17, 8:29 PM
    • 335 Posts
    • 176 Thanks
    louloubelle79
    • #7
    • 31st Oct 17, 8:29 PM
    • #7
    • 31st Oct 17, 8:29 PM
    All the best on your MF journey
    Last edited by louloubelle79; 31-10-2017 at 8:50 PM.
    • VDOT47
    • By VDOT47 2nd Nov 17, 1:23 PM
    • 121 Posts
    • 349 Thanks
    VDOT47
    • #8
    • 2nd Nov 17, 1:23 PM
    • #8
    • 2nd Nov 17, 1:23 PM
    It's hard work trying to cutback on outgoings isn't it? Seems like every day there is something or other that is flowing out of our account! The last few days for example:
    - new bathroom scales after the previous ones broke
    - we've decided we need a dimmer switch for the living room lights as they are far too bright (at least this might save electricity in the future though)
    - birthday presents for mother and also a son of a good friend
    - decided we need a draft excluder for the porch door into the living room (the porch is like an ice box and it is not even deep winter yet!)


    On the plus side, after a good 6 months at work, I am coming up to a salary review ... so fingers crossed!
    • VDOT47
    • By VDOT47 6th Nov 17, 9:46 AM
    • 121 Posts
    • 349 Thanks
    VDOT47
    • #9
    • 6th Nov 17, 9:46 AM
    • #9
    • 6th Nov 17, 9:46 AM
    Well, a mixed weekend.


    On the plus side, online banking is now set up, so I could see our current balance sitting at £264,4XX (can't remember the exact amount).


    On the down side, when we tried doing a sample payment to the mortgage account, our bank said it couldn't process the payment so I think the 'account number' for the mortgage account isn't a faster payments banking account number. Will need to ring mortgage co to ask about this.


    I've decided my first aim is to get the balance below £260,000 by the end of March 2018 (which would be a couple of months before it will naturally get to that figure).
    • greent
    • By greent 6th Nov 17, 12:25 PM
    • 7,073 Posts
    • 72,066 Thanks
    greent
    Are you maybe using your mortgage account number? - Often you need to have a different account number and then the mortgage account number as a reference number.

    If that's the case & you are with Lloyds mtge co the info is on several threads on here, or I can let you have it
    I am the master of my fate; I am the captain of my soul
    Repaid mtge early (orig 11/25) 01/09 £124616 01/10 £104927 01/11 £89873 01/12 £76317 01/13 £52546 01/14 £35356 01/15 £12133 07/15 £NIL
    BTL Mtge 12/16 £69786. 2018 OPs (#18) £1068.37/£4000
    Net sales 2018 £519.32/£1000 PAYDOX18 (#15) £18459.38/£18918.90
    • VDOT47
    • By VDOT47 6th Nov 17, 12:53 PM
    • 121 Posts
    • 349 Thanks
    VDOT47
    I think that is the problem greent - I will ring mortgage co (not Lloyds) and ask them to clarify.


    Also seemed to discover that my plan to increase our DD to £1200 pcm won't work either (certainly not through online banking, as there is no option to change DD) - they don't like to make it easy to overpay do they!
    • fiona100
    • By fiona100 6th Nov 17, 1:22 PM
    • 25 Posts
    • 77 Thanks
    fiona100
    I love my little flat, but as my job ( I hope crossed fingers) isn't my forever job, I may have to move [possibly moving city]. (I would also like somewhere with a garden or easy access to an allotment so I can cut food costs). As it is, I am trying my hardest to get rid of the mortgage.. More freedom whatever happens is no bad thing!


    Thanks for the example, and giving me ideas for more advanced OPs.


    Cheers Fiona
    • VDOT47
    • By VDOT47 8th Nov 17, 1:12 PM
    • 121 Posts
    • 349 Thanks
    VDOT47
    Have finally obtained from mortgage co the correct sort code and account number to make overpayments to, so will make the first 'tester' payment this evening to check it works.


    Money saving this week so far:
    1) 10p off a litre of petrol with Tesco - saved me about £4.50 on a full tank
    2) Brought my own sandwich to work for lunch
    3) Got 5% cashback on a meal we had at Harvester on Sunday - will probably only equate to about £1.65 but hey ho!


    Hoping to make some sort of overpayment this month.


    Have also started getting quotes for a new porch extension (to incorporate a downstairs toilet). Aside from the convenience while we live at the house, I hope it will help marginally in heating costs by stopping so much heat escaping from our current old and poorly insulated porch and have had an opinion from a local estate agent that we should hope to recoup a lot of the cost in additional value/increased saleability when we sell in the future.
    • VDOT47
    • By VDOT47 9th Nov 17, 8:58 AM
    • 121 Posts
    • 349 Thanks
    VDOT47
    So, £1 tester payment made online - will have to wait until tonight to log on and see if it made its way to the mortgage account. Bit impatient to find out!


    Hope it does work because as of December ..... I have a pay rise! Intend to put pretty much the whole of the pay rise towards the mortgage for the time being. I could ask for my pension contribution to be increased, which does make the most financial sense in the long run due to the tax reliefs on the contributions, but in the short term we need to reduce this mortgage if we are going to stand a chance of moving within 5 years.


    Can someone please advise how you do a signature on these posts?
    • Mutton Geoff
    • By Mutton Geoff 9th Nov 17, 9:50 AM
    • 1,139 Posts
    • 1,243 Thanks
    Mutton Geoff
    a 25 year mortgage with an initial 5 year fix at 2.19%


    .....

    My motivation for this is of course to be mortgage free by 55 in order to then make saving for retirement easier
    Originally posted by VDOT47


    It may be worth talking to an independent financial advisor. Pension saving (at the moment) is very tax efficient up to the AA and LTA limits (£40k per annum and £1m pot). The effect of compound interest over long periods of time is astounding (Einstein called it the 8th wonder of the world).


    Average annual stock market returns over the last 120 years have been 7%. Whilst interest rates are low, you might want to temper this figure a little (say 5%) which is still more than double what you're paying on your mortgage.


    I know this is the Mortgage Free Wannabe forum but it's worth looking at the financial "big picture" since the time between your achievement of being mortgage free and retiring may be too short and too late to build up a reasonable pension pot.


    A good example of the power of compound interest in this article - When saving for 10 years pays more than saving for 40


    Save from 21 to 30, then stop. You will have a bigger pension than a saver who starts at 30 and stop at 70. The miracle of compound interest, Einstein's 'eighth wonder of the world!!!8217;
    Compensations/Refunds from Banks & Institutions - £4,165 | Stooz Profits - £7,636 | Quidco - £4,014

    All with a big thank you to Martin and MSE.com from Mutton Geoff!
    • VDOT47
    • By VDOT47 9th Nov 17, 1:41 PM
    • 121 Posts
    • 349 Thanks
    VDOT47
    Geoff - you are correct, and I suppose it is a case of balancing the shorter term needs against that longer term financial gain. Which is why spreading investment across savings, pensions, property, mortgage freedom etc is the best plan in the long run.
    • VDOT47
    • By VDOT47 13th Nov 17, 9:42 AM
    • 121 Posts
    • 349 Thanks
    VDOT47
    Not the most cost-free weekend, but we did get about £11.00 of cashback on a meal that we had, so that can be paid to the mortgage when it comes through.


    Have another 10p of a litre of petrol to use this week, and we are working hard to keep spending at Mr T each week below budget, so that we might have a small surplus to overpay this month (probably only about £50).
    • VDOT47
    • By VDOT47 15th Nov 17, 10:43 AM
    • 121 Posts
    • 349 Thanks
    VDOT47
    Not much to report in terms of money saving, although yesterday was almost a NSD - only 14p spent on a banana! Hoping for similar today, as I have again brought my own lunch to work.


    We realised recently that, despite moving in February, we hadn't received any water bills so far. That has been sorted out now and they have set up a DD starting in December for the next year at £48 pcm. More than it will be in the future, as it is taking into account playing catch up for the 9 months we haven't been paying. So that is more money to find from next month.


    Have asked a couple of builders for quotes to redo our porch to make it a bit bigger to incorporate a downstairs loo and more storage space for coats, shoes etc. We will probably get the front windows done at the same time, so overall it should hopefully make us a bit more energy efficient, and will add value when we come to sell in the future (not to mention making our life easier by having a downstairs toilet), but will obviously eat up our emergency savings fund in the meantime.


    Also got a bod from Eon coming round next week to assess us for cavity wall insulation.
    • chelseablue
    • By chelseablue 15th Nov 17, 10:57 AM
    • 2,419 Posts
    • 2,889 Thanks
    chelseablue
    Following your journey with interest!

    Our mortgage balance is currently £220,250. I was overpaying £400 a month but then decided to get married next year so all savings are going towards that.

    Then in December next year we are going to Australia on holiday so need to save for that!

    Will restart overpaying in 2019 (at least £500 a month) or before if I can!

    Our 2 year fix is up in March and we're going for a 5 year fix this time. We also want to move house so need to pay off as much as we can in the 5 years before borrowing more(!)
    Mortgage starting balance £231,000
    Mortgage after Year 1 £225,000
    Mortgage after Year 2 £218,000
    • VDOT47
    • By VDOT47 15th Nov 17, 1:02 PM
    • 121 Posts
    • 349 Thanks
    VDOT47
    Chelseablue - sounds like you have a couple of very good reasons to stop the overpayments for a year or so!


    Just checked online banking and the £10.89 cashback from the weekend has been confirmed, but won't be received until next month .....
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