Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 8th Sep 12, 12:07 PM
    • 682Posts
    • 3,054Thanks
    SuperSecretSquirrel
    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] +55,209.85 (MFiT4:+60k)
    NW [2013 126k|2014 156k|2015 190k|2016 228k|2017 269k] 274,532.45 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%|2017 18%] 30.0% (exc SP)
Page 30
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 10th Apr 18, 8:42 AM
    • 682 Posts
    • 3,054 Thanks
    SuperSecretSquirrel
    Same here ed, I have cards with generous credit limits with each of their brands... The slow stooze card is one of them, so once the balance is paid off I need to decide if I should close it and be eligible for new customer 0% BTs next year, or keep it open with zero utilisation in the hopes of an existing customer 0% BT offer.

    Not the end of the world if I can't BT next year as I can pay off the balances if required, but if I can keep the free money machine running a little longer it would be silly not to!

    Mtg [2013 64k|2014 51k|2015 38k|2016 26k|2017 14k] Zero!
    MN [2013-25k|2014-2k|2015+16k|2016+34k|2017+52k] +55,209.85 (MFiT4:+60k)
    NW [2013 126k|2014 156k|2015 190k|2016 228k|2017 269k] 274,532.45 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%|2017 18%] 30.0% (exc SP)
    • Karmacat
    • By Karmacat 10th Apr 18, 9:47 AM
    • 29,193 Posts
    • 166,684 Thanks
    Karmacat
    At the end of the day the PBs are a bit of fun mostly funded by free 0% stooze money, so I'm very happy to keep it simple and take the 1%! I'd be even happier to win a million, that would be insta-retirement right there, but 1% and a daydream or two is fine by me
    Originally posted by SuperSecretSquirrel
    I'm looking forward to the time when my *stuff* is under control, maybe at the start of next month, and I can pay attention to things like stoozing again - done it once, and as long as you pay attention, its good. Loving the "insta-retirement"
    Retired August 2016
    • edinburgher
    • By edinburgher 10th Apr 18, 10:00 AM
    • 11,122 Posts
    • 59,706 Thanks
    edinburgher
    Insta-retirement is a great concept, I maintain a 1 PB balance just in case

    I would definitely consider a slow stooze in future (not a stoozupid like my current one) and I would also consider stoozing to fill ISAs (although who am I kidding that we'll have a spare 20k pa any time soon?)
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 17th Apr 18, 8:50 PM
    • 682 Posts
    • 3,054 Thanks
    SuperSecretSquirrel
    I found out about this last night. Also, I had somehow missed the news that the "every little helps" bank is making a change this week that will definitely result in them helping me a little less! Their savings accounts will no longer be able to pull funds in via DD

    Looks like it's damage limitation time... I have seven genuine DDs to play with (plus a few short term ones for stooze card minimum payments), four of them pay out each month, the three others do so less often. I would need at least ten DDs paying out each month to maintain all my existing current accounts, so it looks like I'll either be signing up for some low value DDs, or giving up some of my accounts.

    I have three accounts paying 3% that don't require any DDs, and can hold a maximum of 6k between them - these accounts are going nowhere. I also have an account that pays 48pa for having two DDs and a 1+ balance - I think I'll be keeping hold of this one (with a minimal balance at all times). I have another account that pays net 36pa for having two DDs and a 1+ balance - I think I'll be keeping this one too (once again maintaining a minimal balance).

    Another account pays varying amounts of cashback based on payment amounts, again requiring two DDs and a 1+ balance. This one only requires two "active" DDs, they don't have to pay out each month - this makes it a good fit for the three irregular DDs. It's not so simple to compare this one against the other accounts, but at best it pays a net of around 55pa (using all seven DDs), closer to 30pa when accounting for the four DDs that are likely already spoken for.

    Finally, there are the three accounts that will soon be paying 1.5% on up to 5k each, and requiring two DDs each. My current thinking is that these will be emptied and left dormant. The 1.5% return is now so close to what is being offered on easy access savings accounts, and even premium bonds (1.4% average return), that jumping through their hoops doesn't seem worth the bother... I have spare capacity in the PB account now, so it does seem like the simplest short term solution, and it would slim down my finances spreadsheet nicely.

    Going this route would see me earn an effective 4.9% from the surviving current accounts (294pa on total balance of 6003). Taken in isolation, that's pretty good I'd also have close to the maximum holding in PBs, with the money easily accessed as and when better offers present themselves (or stooze cards need repaying).

    I'll mull it over for a few days before I make my final decision...

    Mtg [2013 64k|2014 51k|2015 38k|2016 26k|2017 14k] Zero!
    MN [2013-25k|2014-2k|2015+16k|2016+34k|2017+52k] +55,209.85 (MFiT4:+60k)
    NW [2013 126k|2014 156k|2015 190k|2016 228k|2017 269k] 274,532.45 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%|2017 18%] 30.0% (exc SP)
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 18th Apr 18, 6:37 AM
    • 682 Posts
    • 3,054 Thanks
    SuperSecretSquirrel
    The 1.5% on up to 5k accounts will have a 0.1% advantage over the average PB rate. On the full 15k, that's 15pa, or 1.25pm, or roughly 21p per month per direct debit paid. It's not worth scrabbling around to setup more DDs, or even to shuffle around the stooze repayment ones, for that kind of return.

    Looks like my financial world will be simplified a little further, which is a good thing

    Since I'll effectively be giving up three current accounts and two savings ones, I think it's ok for me to add a regular saver Just one account should net approximately 90pa on an average balance of 1800 at 5%

    Mtg [2013 64k|2014 51k|2015 38k|2016 26k|2017 14k] Zero!
    MN [2013-25k|2014-2k|2015+16k|2016+34k|2017+52k] +55,209.85 (MFiT4:+60k)
    NW [2013 126k|2014 156k|2015 190k|2016 228k|2017 269k] 274,532.45 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%|2017 18%] 30.0% (exc SP)
    • edinburgher
    • By edinburgher 18th Apr 18, 6:40 AM
    • 11,122 Posts
    • 59,706 Thanks
    edinburgher
    Isn't it nice to have options and time to think?
    • shangaijimmy
    • By shangaijimmy 18th Apr 18, 6:49 AM
    • 2,712 Posts
    • 13,357 Thanks
    shangaijimmy
    And it's a good time to re-evaluate and declutter the finances a bit. I have 3 accounts to close now due to Tesco savings changes, but i'm actually quite happy to streamline/simplify things a bit. Onwards and downwards!
    MFW: Turning June 2036 into March 2025... 38//120 Payments Challenge, Diary Reduction 40,984.38
    Aug 2009: 163,051 // Current: 95,015.63 // Avg Daily Interest 4.27
    MFiT-T4 #8 - 74.24% of 41,000
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 18th Apr 18, 8:13 AM
    • 682 Posts
    • 3,054 Thanks
    SuperSecretSquirrel
    Sure is Ed and Jimmy

    Definitely an opportunity to simplify things a little. "Every cloud" and all that...

    Mtg [2013 64k|2014 51k|2015 38k|2016 26k|2017 14k] Zero!
    MN [2013-25k|2014-2k|2015+16k|2016+34k|2017+52k] +55,209.85 (MFiT4:+60k)
    NW [2013 126k|2014 156k|2015 190k|2016 228k|2017 269k] 274,532.45 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%|2017 18%] 30.0% (exc SP)
    • VDOT47
    • By VDOT47 18th Apr 18, 10:12 AM
    • 116 Posts
    • 337 Thanks
    VDOT47
    Glad I never bothered to open any Tesco accounts after all. The Nationwide ones are fiddly enough to try and get right each month!


    This month has the 'mystery' element to it as well of the double whammy of an increase in personal allowance but also the increase in auto-enrolment contributions - so planning this month's overpayment and next month's finances is a bit tricky as I don't have a definitive starting point to work from in terms of income!
    Original Mortgage (Feb '17) 269,995
    Current Mortgage (12/04/18) 246,637.06
    End Date Aug 2040 Original End Date February 2042
    • shangaijimmy
    • By shangaijimmy 18th Apr 18, 10:33 AM
    • 2,712 Posts
    • 13,357 Thanks
    shangaijimmy
    With you on that one. the mystery of increased auto enrolment increases...
    MFW: Turning June 2036 into March 2025... 38//120 Payments Challenge, Diary Reduction 40,984.38
    Aug 2009: 163,051 // Current: 95,015.63 // Avg Daily Interest 4.27
    MFiT-T4 #8 - 74.24% of 41,000
    • Karmacat
    • By Karmacat 18th Apr 18, 11:10 AM
    • 29,193 Posts
    • 166,684 Thanks
    Karmacat
    Loving the analysis and cost-benefit, Jimmy. And I'm totally with you on decluttering accounts (and if you keep any paperwork on them, make a note about what you've done). I have a long and boring story about that, but the conclusion is still a good'un
    Retired August 2016
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 1st May 18, 10:44 PM
    • 682 Posts
    • 3,054 Thanks
    SuperSecretSquirrel
    Net Worth Update - 1st May 2018
    Code:
                   CURRENTVALUE       +/-MTH       +/-QTR       +/-YOY
    House Value:    125,000.00        0.00        0.00        0.00
    Pensions:        80,011.30    3,854.75      383.48   13,171.87
    S&S:             30,104.67    1,754.51    2,709.96   13,010.01
    Cash:            25,385.95      -80.15      896.37  -17,763.94
    Car Value:       14,360.00      375.00     -365.00   -1,610.00
    Mortgage:             0.00        0.00        0.00   20,167.44
    Student Loan:       -48.70       66.90      199.91      676.33
    Due to HMRC:       -280.77      -36.30     -110.19      255.13
    Total:          274,532.45    5,934.71    3,714.53   27,906.84
    91.5% of the way to 300k net worth (2020 challenge), 0.0% mortgage ltv, 55,209.85 liquid assets, 30.0% financially independent.
    __________________________________________________

    What a difference a day month makes... 24 720 little hours...

    The roller coaster ride continues! This month the market decided to undo last months woes. Pensions up, ISA up, even the cars supposedly increased in value. I'm not going to try to make sense of it all, I'll just note down the values and leave it at that!

    Student loan is nearly all gone now

    30% FI without factoring in state pension - a nice milestone to hit, though of course it could well be temporary On a similar note total NW close to the 275k point, but who knows what the next month will bring - we could go zooming past, or we could come crashing back down. Oh the fun and games of the investing world!

    Mtg [2013 64k|2014 51k|2015 38k|2016 26k|2017 14k] Zero!
    MN [2013-25k|2014-2k|2015+16k|2016+34k|2017+52k] +55,209.85 (MFiT4:+60k)
    NW [2013 126k|2014 156k|2015 190k|2016 228k|2017 269k] 274,532.45 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%|2017 18%] 30.0% (exc SP)
    • shangaijimmy
    • By shangaijimmy 2nd May 18, 7:09 AM
    • 2,712 Posts
    • 13,357 Thanks
    shangaijimmy
    Great read. A tone of positivity mixed with trepidation! Its like the contrast of hot apple crumble with cold ice cream!
    MFW: Turning June 2036 into March 2025... 38//120 Payments Challenge, Diary Reduction 40,984.38
    Aug 2009: 163,051 // Current: 95,015.63 // Avg Daily Interest 4.27
    MFiT-T4 #8 - 74.24% of 41,000
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 3rd May 18, 8:04 AM
    • 682 Posts
    • 3,054 Thanks
    SuperSecretSquirrel
    Thanks Jimmy, I think that about sums it up. Between pensions and ISA we're shoving around 1.8k per month into the stock market now... It's fun (well, of a sort), and chances are good that we'll come out on top over time, but it can be a bit unpredictable to say the least... Having saved in cash most of our lives the fluctuations are quite a departure from what we are used to. My 300k by 2020 aim for example, if we were holding cash only I could work out if we were on target or not, but thanks to the ups and downs of the market I really don't know

    A nice 75 win on PBs this month I emptied two of the Scottish bank accounts towards the end of last month and paid that 10k into PBs, so that's a further ten thousand chances of winning a million from the first of June

    Decided to keep the last of the Scottish bank accounts active as an easy access savings account. Finances spreadsheet has shed four accounts (the two every little helps savers were redundant so have gone the way of the dodo too) it's feeling light and nimble
    Last edited by SuperSecretSquirrel; 03-05-2018 at 8:35 AM.

    Mtg [2013 64k|2014 51k|2015 38k|2016 26k|2017 14k] Zero!
    MN [2013-25k|2014-2k|2015+16k|2016+34k|2017+52k] +55,209.85 (MFiT4:+60k)
    NW [2013 126k|2014 156k|2015 190k|2016 228k|2017 269k] 274,532.45 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%|2017 18%] 30.0% (exc SP)
    • shangaijimmy
    • By shangaijimmy 3rd May 18, 12:52 PM
    • 2,712 Posts
    • 13,357 Thanks
    shangaijimmy
    1.8k a month, you are really well placed for the future...how ever many moons away that is! Thinking about it once our mortgage is done we'll be throwing approx 1.5k, which is quite a prospect when you think of it like that!
    MFW: Turning June 2036 into March 2025... 38//120 Payments Challenge, Diary Reduction 40,984.38
    Aug 2009: 163,051 // Current: 95,015.63 // Avg Daily Interest 4.27
    MFiT-T4 #8 - 74.24% of 41,000
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

3,556Posts Today

8,707Users online

Martin's Twitter
  • It's the start of mini MSE's half term. In order to be the best daddy possible, Im stopping work and going off line? https://t.co/kwjvtd75YU

  • RT @shellsince1982: @MartinSLewis thanx to your email I have just saved myself £222 by taking a SIM only deal for £7.50 a month and keeping?

  • Today's Friday twitter poll: An important question, building on yesterday's important discussions: Which is the best bit of the pizza...

  • Follow Martin