Mortgage Free by 55

fiona100 · 6 November 2017 at 2:22PM

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 cost:Ts). 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. :money:

Cheers Fiona

VDOT47 · 8 November 2017 at 2:12PM

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 · 9 November 2017 at 9:58AM

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 · 9 November 2017 at 10:50AM

VDOT47 wrote: »

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

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’

VDOT47 · 9 November 2017 at 2:41PM

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 · 13 November 2017 at 10:42AM

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 · 15 November 2017 at 11:43AM

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 · 15 November 2017 at 11:57AM

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(!)

VDOT47 · 15 November 2017 at 2:02PM

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 .....

VDOT47 · 20 November 2017 at 12:30PM

Morning all - another money saving week ahead!

This weekend was quite productive, and included booking a holiday for next year. It did mean paying the deposit of £180 now (the balance is not due until August), but it did mean we could use a voucher for £60 off the balance, as we had to use it by the end of this month, so we decided to just take the plunge yesterday!

Saturday was only an £11 top up shop (and kept total weekly spending about £5 below budget) and yesterday was a NSD completely.

Checked our online mortgage balance yesterday and noticed some thing strange. I have made 4 mini overpayments so far (totalling only £20.98) but only £10 has actually been credited against the balance of the mortgage, with the other £10.98 showing as "Overpayment waiting to be allocated" or something similar. Any ideas why this may be? Do Santander only apply overpayments in multiples of £10 or something? Has anyone else with them had this issue. It is not something that really concerns me if I am making small payments, but when I start making larger ones (which will happen from the new year once my new salary kicks in and Christmas is out of the way) I want to make sure the full amount gets credited to the account immediately, rather than sitting in some kind of holding fund for a period of time?

Mortgage Free by 55

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