Mortgage free before my kids turn 18

di-di-di-dah-di-dah · 23 May 2018 at 1:55PM

Hi there folks.

Long time reader, first time poster, brand new account.

Short Story:

We bought our first house in June 2016. It's nice 3 bed property in East Midlands and it will serve us well for several years unless something unexpected happens. Great value for what we got really and definitely works better for us than renting ever did.

We paid £128,500 for it and we put down 10% deposit back then, so initial mortgage was about 115 500. In 2 years time we have managed to reduce that to 108,662.68 as of this month.

We have signed a new 5 year fixed mortgage agreement (3.19%) this month with regular payment 501.55 a month and total mortgage term of 27 years. Bank assessed our property as worth £141,442 so we had a nice boost in Loan To Value and better deal.

My kids are currently 6 and 3 years old and our goal is to be mortgage free before they become adults. We are a low income family earning about £16 000 (overtime dependent) after taxes each so it will be a push to do it in only 12 years but I am optimistic and hope with time our earning potential grows.

Initial Plan is to reduce our LTV to under 60% before the fix deals runs out.

I will document it here, mostly for myself really to see that all sacrifices are worth it, but I am looking forward to your tips as this is long marathon I am sure we can learn a lot still.

Details and numbers for geeks

Initial Property Value: £128,500
Current Property Value: £141,442

Initial mortgage: £115,500
Mortgage at start of this diary: £108,662.68

Current Mortgage: £108,323.87
Current LTV: 76.59%

Payments remaining without over payments: 321
Mortgage free date without over payments: March 2045
My first child turning 18: May 2030

beanielou · 23 May 2018 at 1:59PM

Wishing you well on your journey.
You will get lots of support here

dunstonh · 23 May 2018 at 2:00PM

How are your other financial needs doing? Retirement planning for example? Are you sacrificing other needs to focus on this one?

di-di-di-dah-di-dah · 23 May 2018 at 2:12PM

We have £4000 in emergency savings.

Currently my partner has car on finance on very similar interest rate as our mortgage that will end in 2 years that will free up another £250 a month. That was taken in our less responsible days.

As for pension as it is at the moment we contribute to it but likely not enough. 3% each I know we should contribute more but with budget as small as ours you can't pursue all our goals at the same time.

My intention is to increase my pension contributions as my income grows I work as Support Staff in hospital and I am in a process of getting trained to be a nurse via new Nursing Associate program as my income grows I will continue to increase pension contributions.

My partner is supervisor for Day Centre for people with learning disability in process of doing her NVQ 5 with prospect of becoming deputy manager in couple of years.

louloubelle79 · 23 May 2018 at 7:11PM

We are so similar in goals and lifestyle. Our aim is to try and be MF by time children 18 also (7&8 now). Also paying for the car and waiting 2 years for it to be paid. Monthly payments £508.00 fixed until 2026. Also on small wages- a nurse but work term time so salary 13k PA

Good luck with your journey we will be on it with you :money:

di-di-di-dah-di-dah · 23 May 2018 at 7:46PM

Thanks for a support I appreciate it do you have your own diary? It would be nice to read about someone in similar position

louloubelle79 · 23 May 2018 at 7:59PM

Hi not set up my own ;)diary yet but on to do list

di-di-di-dah-di-dah · 23 May 2018 at 8:08PM

Let me know when you do I look forward to reading it.

di-di-di-dah-di-dah · 25 May 2018 at 3:58PM

I am in a process of looking at accelerating this mortgage thing. At this moment in time If I overpay mortgage by £140 a month I will hit my 60% LTV month before my fix rate ends.

I was looking at possibility to stooze it so I can overpay on front and then pay back £140 toward my credit cards at 0% APR. That way I should save around £800 to £1000 in the course of 5 years.

Reddit folks seem think it sounds sound I described my plan in a little bit more details on our stoozing forum here. I am hoping this will work just fine. I don't predict any major job turbulence on the way, quite opposite my company is investing quite strongly into training me to become a Nurse so my income should only go up which would make both repaying cards and maybe overpaying more even easier.

di-di-di-dah-di-dah · 31 May 2018 at 8:47AM

Wehave hit our first little hurdle on the way. We have merged with new company couple of months ago and HMRC assumed that we are working 2 jobs even though our original company no longer exists. This resulted in us being put on BR/1 tax code meaning no tax free allowance. Until this is sorted I am not doing any crazy stoozing or anything else just a simple over payment of £130 today and regular payment tomorrow.

I will post in couple of days how we stand number wise.

di-di-di-dah-di-dah · 2 June 2018 at 10:08PM

Okay all the payments are cleared now for this month

Current Mortgage: £108,323.87
Current LTV: 76.59%

Payments remaining without over payments: 321
Mortgage free date without over payments: March 2045
My first child turning 18: May 2030

We have reduced our mortgage date by 1 extra month with a single payment of 130 of course it's still long way to go but if I continue like this we should hit 60% LTV by the time we are to renew our mortgage. I am hoping that next year we can overpay even more as my partner no longer pays for her car.

Mortgage free before my kids turn 18

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