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    • SuperSecretSquirrel
    • By SuperSecretSquirrel 8th Sep 12, 12:07 PM
    • 696Posts
    • 3,090Thanks
    Onwards to freedom!
    • #1
    • 8th Sep 12, 12:07 PM
    Onwards to freedom! 8th Sep 12 at 12:07 PM
    Hello and welcome to my MFW diary. Not sure how often I'll update as I'm going down the boring 'increase monthly mortgage direct debit' route, not the more interesting to read 'random repayment as and when a bit of extra money is made' route. Still, no harm in starting a diary here, even if it's just for me to look back on in a few years time!

    It seems like a good idea to start with a bit of background, so here goes...

    We bought our house in July 2010 with an 87k repayment mortgage, fixed for 10 years at 5.29%. Nearly two years of £525pm standard repayments allowed us to rebuild our savings, but after 20 monthly payments (over 10k paid out) the mortgage balance had only dropped around 2.5k thanks to all the interest being paid...

    We decided to make a small start on overpaying - small overpayments early on have quite an impact over the long term so why not start small and ramp up later? March 2012 we made our first regular overpayment, £50pm. Amazingly, if we were to keep up with this £50pm over the life of the mortgage we'd be mortgage free nearly four years early (Nov 2031) and save ourselves a tidy bit of interest. Not bad rewards for just £50 a month!

    A few days ago I decided to step things up a notch. From next month the regular overpayments will increase to £250pm, £200 less will find its way into my long term savings (paying 2.8%, minus basic rate tax), £200 more will find its way to the mortgage provider. Makes a lot of sense looking at the interest rates! I'll keep on saving in a normal savings account though and won't be putting every penny into the mortgage - I'm used to seeing my savings grow monthly, and like to try to be prepared for any eventuality, so I'll keep on squirelling away a chunk of my income in savings each month. I know this isn't the most efficient option in terms of reducing interest payments, but it's a balance that keeps me sane, if there's any major disasters the savings are there to fall back on, that kind of peace of mind is well worth a few pounds! Anyway, here's where the numbers get really interesting - by overpaying £250pm for the life of the mortgage we'd be mortgage free nearly eleven years early (Oct 2024). Wow!

    Seeing the massive savings I started looking into this stuff in more detail. We're allowed to overpay up to 10% of the mortgage balance each year without penalty. I don't want to increase overpayments over £250pm right now, but maybe after another year or so of growing my savings I'll step up the overpayments to £500pm. Two years later the overpayment would need to drop to £450pm (to avoid penalty), year after that drop to £400, and the following year drop to £350, and the years after that drop to £250 at which level the op's would have to remain until the end of the fixed period (August 2020). If we were to follow this plan, at the end of the fixed period our mortgage balance would be around about 20k which we could pay off with a lump sum from savings. Mortgage free fifteen years early, at age 36, sounds awesome, and what's incredible is that it also sounds very realistic.

    At the moment overpaying is my project. OH and I have our own accounts that our wages are paid into, and a joint account that we feed monthly to pay the bills. As I earn a little more I also do the grocery shopping, pay a few extra bills, and overpay the mortgage. Beyond feeding the joint account OH's income is none of my business, it can be spent on whatever OH likes, same goes for my income. This works well for us - if I want to splash out on a new computer game or a night out or whatever I can do so without needing to consult OH, and if OH wants to splash out on a night out or clothes or whatever no need to consult me. We're both debt averse and savers by nature, so as long as we spend less than what's coming in and all the bills get paid all is well. I'm hoping that seeing the mortgage balance reduce might convince OH to get involved in overpaying the mortgage (or at least split savings into two pots, one 'spendable' short term pot for holidays and home improvements etc, and a long term one earmarked for paying down a lump sum on the mortagage), but there'll be no pressure, if OH joins in that would be excellent, but if not that's ok.

    Finally, I know life doesn't always go smoothly - anything could happen in the next 8 years, babies, redundancy, armageddon, "the best made plans of mice and men, often go awry"... But if things don't go to plan, nevermind, we'll have made a great start on the mortgage regardless, any overpayments we make early on will benefit us later on, so we may as well give it a shot while circumstances allow It's nice to remember that circumstances can go up as well as down too - maybe there will be payrises and good fortune along the way that make achieveing the target easier, who knows!

    January 2014 Update:

    Things have changed quite a lot since I first started this diary... The new aim is to hit the MFiT3 target of a 40k mortgage balance by end 2015, and to have 40k in savings by that time too, making us mortgage neutral 20 years early! Anything can happen, but I think it's time to aim high!

    March 2015 Update:

    We did it! We are mortgage neutral (savings balance higher than outstanding mortgage) and are locked in to achieve the MFiT3 stretch goal of mortgage below 40k by the end of the year I'm going to keep this diary going, the aim is total financial independence now!

    January 2018 Update:

    Paid the mortgage off in full today (12/01/2018)
    Last edited by SuperSecretSquirrel; 12-01-2018 at 9:42 PM. Reason: We did it! :D

    Mtg [2013 £64k|2014 £51k|2015 £38k|2016 £26k|2017 14k] Zero!
    MN [2013-£25k|2014-£2k|2015+£16k|2016+£34k|2017+£52k] +£56,615.31(MFiT4:+60k)
    NW [2013 £126k|2014 £156k|2015 £190k|2016 £228k|2017 £269k] £278,659.39 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%|2017 18%] 30.9% (exc SP)
Page 26
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 12th Jan 18, 8:39 PM
    • 696 Posts
    • 3,090 Thanks
    Hi NM, we've always been happy to hold cash provided we can at least match inflation - which we have managed so far. I am currently reducing our cash balance in favour of equities, but it's a slow process as I'm wary of making large lump sum S&S purchases, much prefer a slow monthly drip feed. Of course a good chunk of cash has been sat there waiting to be paid off the mortgage balance... Also, we quite like to have uncomplicated easy access cash on hand in case we might need some at short notice

    Mtg [2013 £64k|2014 £51k|2015 £38k|2016 £26k|2017 14k] Zero!
    MN [2013-£25k|2014-£2k|2015+£16k|2016+£34k|2017+£52k] +£56,615.31(MFiT4:+60k)
    NW [2013 £126k|2014 £156k|2015 £190k|2016 £228k|2017 £269k] £278,659.39 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%|2017 18%] 30.9% (exc SP)
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 12th Jan 18, 8:52 PM
    • 696 Posts
    • 3,090 Thanks
    It's ours... ALL ours!

    Mtg [2013 £64k|2014 £51k|2015 £38k|2016 £26k|2017 14k] Zero!
    MN [2013-£25k|2014-£2k|2015+£16k|2016+£34k|2017+£52k] +£56,615.31(MFiT4:+60k)
    NW [2013 £126k|2014 £156k|2015 £190k|2016 £228k|2017 £269k] £278,659.39 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%|2017 18%] 30.9% (exc SP)
    • Watty1
    • By Watty1 12th Jan 18, 10:42 PM
    • 2,992 Posts
    • 21,298 Thanks
    Whoop whoop whoop !!! Congratulations
    Mortgage at start of diary Sept 2013: £132,995 Aug 2015 £0
    Overpaid next mortgage. £79,491 down to £27152
    Changing focus for now
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 13th Jan 18, 8:21 AM
    • 696 Posts
    • 3,090 Thanks
    Thanks Watty

    We enjoyed a nice takeout last night courtesy of the reduced ERC. There's more than enough left over for another one this evening

    Only costs incurred when paying the mortgage off in full were £476.38 in early repayment charges and a £35 exit fee.

    Here's a chart worth a thousand words

    Red: mortgage balance (original schedule)
    Green: mortgage balance (actual)
    Blue: virtual offset (liquid)
    Yellow: today
    Last edited by SuperSecretSquirrel; 13-01-2018 at 8:24 AM.

    Mtg [2013 £64k|2014 £51k|2015 £38k|2016 £26k|2017 14k] Zero!
    MN [2013-£25k|2014-£2k|2015+£16k|2016+£34k|2017+£52k] +£56,615.31(MFiT4:+60k)
    NW [2013 £126k|2014 £156k|2015 £190k|2016 £228k|2017 £269k] £278,659.39 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%|2017 18%] 30.9% (exc SP)
    • Karmacat
    • By Karmacat 13th Jan 18, 9:11 AM
    • 29,312 Posts
    • 167,838 Thanks

    Coffee and cake:

    Many, many congratulations! I just love that chart, the freedom that gives you is wonderful!
    Retired August 2016
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 13th Jan 18, 10:02 AM
    • 696 Posts
    • 3,090 Thanks
    Thanks KC

    Mtg [2013 £64k|2014 £51k|2015 £38k|2016 £26k|2017 14k] Zero!
    MN [2013-£25k|2014-£2k|2015+£16k|2016+£34k|2017+£52k] +£56,615.31(MFiT4:+60k)
    NW [2013 £126k|2014 £156k|2015 £190k|2016 £228k|2017 £269k] £278,659.39 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%|2017 18%] 30.9% (exc SP)
    • michelle09
    • By michelle09 13th Jan 18, 11:14 AM
    • 786 Posts
    • 4,363 Thanks
    That's amazing! Well done. It must be the most wonderful feeling.
    • crv1963
    • By crv1963 13th Jan 18, 2:06 PM
    • 302 Posts
    • 710 Thanks
    Just found your thread- Congratulations! It's made a great read. We're on our journey and it is definitely a marathon not a sprint!
    CRV1963- Light bulb moment Sept 15- Planning the great escape- aka retirement!
    • greent
    • By greent 13th Jan 18, 3:35 PM
    • 7,077 Posts
    • 72,124 Thanks
    Whoop!!! Whoop!!!! HUGE congratulations!!!
    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 £522.39/£1000 PAYDOX18 (#15) £18564.38/£18918.90
    • redofromstart
    • By redofromstart 13th Jan 18, 4:02 PM
    • 1,776 Posts
    • 10,736 Thanks
    Congratulations - that's really inspiring!
    • edinburgher
    • By edinburgher 13th Jan 18, 5:00 PM
    • 11,148 Posts
    • 59,848 Thanks
    Well done mate
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 13th Jan 18, 6:50 PM
    • 696 Posts
    • 3,090 Thanks
    Oh wow lots of people posting on my diary Thanks all for stopping by! It does feel great knowing our home is officially all ours

    Mtg [2013 £64k|2014 £51k|2015 £38k|2016 £26k|2017 14k] Zero!
    MN [2013-£25k|2014-£2k|2015+£16k|2016+£34k|2017+£52k] +£56,615.31(MFiT4:+60k)
    NW [2013 £126k|2014 £156k|2015 £190k|2016 £228k|2017 £269k] £278,659.39 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%|2017 18%] 30.9% (exc SP)
    • Elephantchunks
    • By Elephantchunks 14th Jan 18, 1:08 AM
    • 137 Posts
    • 717 Thanks
    Congratulations! Take that banks! I've not been here in months then this happens. Well done SSS you're an inspiration.
    Live a lot. Love a few. Always paddle your own canoe.
    • Escapar2020
    • By Escapar2020 14th Jan 18, 9:56 AM
    • 79 Posts
    • 154 Thanks
    Well done SSS!

    What have you got planned for the next 12-months? I hope you're going to enjoy using some of your OP money, you deserve a pat on the back ;-)
    Jan17: £42,898 Scheduled end: Jul2028 Planned MF: Sep2020
    Mar18 Actual £29,983. OP offset £27,847. Full off-set £15,911
    • Downshifterella
    • By Downshifterella 14th Jan 18, 10:26 AM
    • 122 Posts
    • 779 Thanks
    Amazing news very well done!!
    Enjoy celebrating!!
    MF planning for the simple life
    • Jessy103
    • By Jessy103 15th Jan 18, 10:47 AM
    • 525 Posts
    • 2,237 Thanks
    Congratulations!!!! That's fantastic, well done!!
    Original Mortgage Amount 2007 - £87,310.50
    Mortgage Amount Jan 2018 - £58,500.00
    Overpayment Target for 2018 - £5,000 /£663.78
    Jan - £369.23 Feb - £294.55
    • NorthernMonkey1
    • By NorthernMonkey1 17th Jan 18, 10:24 AM
    • 241 Posts
    • 970 Thanks
    Your FI plan assumes than your investments can match inflation +4% in order to use them as a source of income.

    Any funds held as cash can't really count towards a percentage towards FI, as they aren't earning an income.

    It's always nice to hold a bit of cash, but £40k seems more than a bit, more like a huge wedge
    • NorthernMonkey1
    • By NorthernMonkey1 17th Jan 18, 10:27 AM
    • 241 Posts
    • 970 Thanks
    PS, massive massive congratulations on the mortgage.

    We received our letter from the bank yesterday saying that the bank have removed any referenced to a mortgage from our deeds at the land registry, and the house is completely ours. It took about 2 or 3 weeks to come through, but a bit of that might have been due to christmas

    I wanted to frame it, but Mrs NM said to stop being daft
    • gallygirl
    • By gallygirl 17th Jan 18, 8:26 PM
    • 16,606 Posts
    • 109,655 Thanks
    Great stuff SSS
    A positive attitude may not solve all your problems, but it will annoy enough people to make it worth the effort
    Mortgage Balance = £0
    "Do what others won't early in life so you can do what others can't later in life"
    • Lexi-lu
    • By Lexi-lu 18th Jan 18, 4:47 PM
    • 156 Posts
    • 783 Thanks
    Congratulations SSS, amazing achievement
    Mortgage Balance £14889.31
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