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  • FIRST POST
    • VDOT47
    • By VDOT47 30th Oct 17, 1:32 PM
    • 116Posts
    • 337Thanks
    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 3
    • phillw
    • By phillw 7th Dec 17, 5:59 PM
    • 1,257 Posts
    • 812 Thanks
    phillw
    This therefore predicts overpayments of basically £40,000 over 4 and a bit years (as I didn't overpay anything in the first 8 months of the term) or about £9000 a year! Sounds a lot when I write it down like that!!
    Originally posted by VDOT47
    It is a lot.

    What I found at the beginning was that the debt was so large that it was unreal and not worth worrying about. When you have 270K in debt then spending 2K on a holiday doesn't seem like much. When you get down to 2K mortgage, going on a 2K holiday will be the choice between being mortgage free or not.

    I keep a balance sheet with everything on it. Whether it's a current account, mortgage, utility accounts, contents of my wallet, euros I have left over, amazon vouchers etc etc. That way I know month on month what the position is and I don't forget to spend vouchers etc. Every month I fight to get the number lower.
    • VDOT47
    • By VDOT47 11th Dec 17, 10:39 AM
    • 116 Posts
    • 337 Thanks
    VDOT47
    A reasonably good weekend spending wise, although the heating has been on much more than normal what with the snow and plummeting temperatures, so that will be costly in the long run but it has definitely been needed (especially as DD has a horrible cold).


    First mortgage payment at the revised amount of £1200 went out today, so that is an overpayment of approx. £31. Will make my additional monthly overpayment once payday arrives (early this month) and I do the maths to work out what we can spare this month.
    • VDOT47
    • By VDOT47 13th Dec 17, 9:38 AM
    • 116 Posts
    • 337 Thanks
    VDOT47
    OH was out last night with friends so, in between having to go upstairs to settle DD who has a horrible cold/cough, I checked the mortgage account online and ran a few figures. Current balance after December's DD is c£262,700. I calculated that, following January's DD the balance would be £261,999 even if no additional overpayments were made in December.


    Therefore, I'm hoping to get the balance close to the £261,500 mark by this time next month. Based on the property still being valued at the price we paid (£374,000), although it should be more as we have had a new bathroom installed since moving in, this would give us 30.08% equity in the property (started at 27.81%). So we will very soon be below 70% LTV for the first time!


    Can someone please tell me how to do a signature on here?!?!
    • VDOT47
    • By VDOT47 14th Dec 17, 1:11 PM
    • 116 Posts
    • 337 Thanks
    VDOT47
    Nationwide account now finally fully open and funded, so that is £2500 of savings earning 5% rather than 0.25%!
    • michelle09
    • By michelle09 15th Dec 17, 9:41 AM
    • 777 Posts
    • 4,277 Thanks
    michelle09
    Hey VDOT47, we have a mortgage similar to yours and are keen to get rid of it ASAP so will be following you here.

    Well done on the savings, need to start looking at ours when we have some built up.
    • VDOT47
    • By VDOT47 15th Dec 17, 3:04 PM
    • 116 Posts
    • 337 Thanks
    VDOT47
    Thanks Michelle. We don't have a huge emergency savings fund, but I was fed up with it sitting there earning diddly squat!
    • greent
    • By greent 15th Dec 17, 5:35 PM
    • 7,008 Posts
    • 71,548 Thanks
    greent
    Can someone please tell me how to do a signature on here?!?!
    Originally posted by VDOT47
    Click on 'Quick Links' in the top border above (towards the RH side) - under the User Control Panel section in the drop down menu there is a link to click for signature (mine says 'edit signature' - am hoping yours will say that or 'create signature'/ something similar )
    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) £877.49/£4000
    Net sales 2018 £491.03/£1000 PAYDOX18 (#15) £13869.38/£18694.38
    • VDOT47
    • By VDOT47 18th Dec 17, 10:33 AM
    • 116 Posts
    • 337 Thanks
    VDOT47
    Thanks Greent, found it. Have tried to start one (hopefully now showing below) and will update it once today's overpayment is credited to the account.


    So, early payday due to Christmas, plus money saved through the month to date meant an overpayment today of £463.17, to add to the £30.xx from the DD being rounded up from this month (of course, this element will increase each month as the interest charged gets lower), so just shy of £500!
    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 Dec 17, 10:49 AM
    • 2,704 Posts
    • 13,345 Thanks
    shangaijimmy
    Great month. £500 sounds like such a significant sum, and was always a sign of a good OP month to me. As you say its starts to increase steadily once interest starts to reduce.
    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
    • VDOT47
    • By VDOT47 2nd Jan 18, 11:44 AM
    • 116 Posts
    • 337 Thanks
    VDOT47
    Happy New Year!


    Haven't posted on here for a couple of weeks. Not much to report in terms of moneysaving (not so easy around Christmas is it?!), but it is a long term thing this isn't it?


    Christmas/New Year was good - very busy though with just one day (yesterday) where we were able to spend the whole day as just the 3 of us. Whilst it is lovely to see family at Christmas, I think we over committed ourselves this year and we are planning to correct that next Christmas!

    We have decided to take the plunge with the porch extension this year and have contacted a local architect to get a quote for him to draw up the plans. We intend to have the work carried out in May/June, by which time we should have 10k in the savings pot, which we are really hoping will cover the cost of the extension, new windows at the front and redecorating the living room!


    We will then have to work on reimbursing the savings account, so overpayments might be a bit lower for a while. Luckily I have a regular savers account which will mature later this year, and am currently on course for a bonus at work, so would hopefully have the savings pot back up to a reasonable level by the end of the summer.
    Original Mortgage (Feb '17) £269,995
    Current Mortgage (12/04/18) £246,637.06
    End Date Aug 2040 Original End Date February 2042
    • VDOT47
    • By VDOT47 4th Jan 18, 9:56 AM
    • 116 Posts
    • 337 Thanks
    VDOT47
    Second Nationwide account now open if OH's name, so that will soon be a home for a further £2500 of savings at 5%.


    Cavity wall man came round yesterday to survey the house and confirmed we will qualify for the free insulation, which should be done by the end of January.

    Money wise, I am still caught in the endless overpayment vs pension contributions debate in my head! Originally I thought throw everything at the mortgage for the next 5 years to allow us to move to our 'forever' home sooner, and then focus on pension. But the thought of compound interest and tax relief on the pension as a higher rate taxpayer really is nagging at me. Maybe I should split things a little bit and increase pension contributions, even if only by £100 a month?
    Last edited by VDOT47; 04-01-2018 at 10:00 AM.
    Original Mortgage (Feb '17) £269,995
    Current Mortgage (12/04/18) £246,637.06
    End Date Aug 2040 Original End Date February 2042
    • VDOT47
    • By VDOT47 4th Jan 18, 12:02 PM
    • 116 Posts
    • 337 Thanks
    VDOT47
    To add further to my confusion I have a money transfer offer on a credit card (for a one off fee of 3.5%) that would be at 0% interest until April 2021! I have quite a large (unused) credit limit on this card, and work out that if I borrow £10,000 for a fee of £350 and pay this to the mortgage now, even taking into account the fact that I would have to repay the card over 3 years thus reducing the future monthly overpayments, our mortgage balance in 3 years time would be about £2500-3000 lower than it would otherwise be! Surely I would be stupid to ignore this offer - unless anyone can spot a flaw in my calculations?!
    Last edited by VDOT47; 04-01-2018 at 12:24 PM.
    Original Mortgage (Feb '17) £269,995
    Current Mortgage (12/04/18) £246,637.06
    End Date Aug 2040 Original End Date February 2042
    • greent
    • By greent 4th Jan 18, 2:16 PM
    • 7,008 Posts
    • 71,548 Thanks
    greent
    I'm sure other people have done the same as this and have made it work for them . I guess part of the issue is remaining determined to repay the CC within the int free period and whether cashflow allows this.
    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) £877.49/£4000
    Net sales 2018 £491.03/£1000 PAYDOX18 (#15) £13869.38/£18694.38
    • VDOT47
    • By VDOT47 4th Jan 18, 2:47 PM
    • 116 Posts
    • 337 Thanks
    VDOT47
    Greent - having thought more about it, the minimum repayments would only be £100 pcm and I would have the choice to pay more back each month, pay back a lump sum or simply do a balance transfer in 3 years time (which would incur a further small one off fee, but when compared to the amount it is saving off the mortgage it seems like a fee worth paying).
    Original Mortgage (Feb '17) £269,995
    Current Mortgage (12/04/18) £246,637.06
    End Date Aug 2040 Original End Date February 2042
    • VDOT47
    • By VDOT47 5th Jan 18, 12:32 PM
    • 116 Posts
    • 337 Thanks
    VDOT47
    I've taken the plunge and made the money transfer request - should be paid and then applied to the mortgage by the end of next week!


    Together with an anticipated 'normal' overpayment later this month I would hope to have the balance down to close to £251,000 by the end of the month.
    Original Mortgage (Feb '17) £269,995
    Current Mortgage (12/04/18) £246,637.06
    End Date Aug 2040 Original End Date February 2042
    • VDOT47
    • By VDOT47 8th Jan 18, 1:37 PM
    • 116 Posts
    • 337 Thanks
    VDOT47
    The weekend was, on the face of it, pretty cheap. At least in terms of cash spent (or not!) however, we went to look at some new cars, as my car is just too small now for us whenever we go away and have all our stuff crammed into every conceivable corner of the car. Looks like it will cost us between £220-£240pcm depending on which we go for, which will eat massively into mortgage overpayments, but sometimes you have to go with what is necessary.
    Original Mortgage (Feb '17) £269,995
    Current Mortgage (12/04/18) £246,637.06
    End Date Aug 2040 Original End Date February 2042
    • VDOT47
    • By VDOT47 9th Jan 18, 10:22 AM
    • 116 Posts
    • 337 Thanks
    VDOT47
    Home insurance renewal quote through today - £171 when last year was £145! So I will be doing some shopping around to find something cheaper (and hopefully with cashback that can be thrown at the mortgage)!
    Original Mortgage (Feb '17) £269,995
    Current Mortgage (12/04/18) £246,637.06
    End Date Aug 2040 Original End Date February 2042
    • VDOT47
    • By VDOT47 9th Jan 18, 10:53 AM
    • 116 Posts
    • 337 Thanks
    VDOT47
    Something I've been pondering, although it won't affect us for very many years, is how you actually end up paying the mortgage off early without paying ERCs (which would seem to defeat the aim of overpaying and saving interest along the way) when you are restricted to overpaying only 10% p.a??


    Logically, once your mortgage is down to a small amount (say £50,000) that means you can only overpay £5000 that year.


    I guess that will still reduce the interest and the overall term, but perhaps not as quickly as the calculators would have us believe??


    Or am I overthinking this??
    Original Mortgage (Feb '17) £269,995
    Current Mortgage (12/04/18) £246,637.06
    End Date Aug 2040 Original End Date February 2042
    • greent
    • By greent 9th Jan 18, 1:29 PM
    • 7,008 Posts
    • 71,548 Thanks
    greent
    Some people save the extra and then when remortgaging for a new deal repay a lump sum to take out a smaller mortgage. ANother option is an offset mortgage.
    Once we came off our fixed rate and went onto SVR we no longer had ERC (C&G/ Lloyds mtge) so could OP whatever we wanted
    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) £877.49/£4000
    Net sales 2018 £491.03/£1000 PAYDOX18 (#15) £13869.38/£18694.38
    • VDOT47
    • By VDOT47 10th Jan 18, 2:04 PM
    • 116 Posts
    • 337 Thanks
    VDOT47
    Yes, that makes sense I suppose. My concern was that SVR is usually higher than any fixed rate, so why would you want to switch to that? Anyway, as I say, it will be a good few years before I have any such concerns!


    The money transfer has been received, so £10,800 was paid to the mortgage today! Should help to reduce the monthly interest a little bit, but more importantly gets us closer to the LTV threshold that I would like to be at in the future when we come to remortgage or move.
    Original Mortgage (Feb '17) £269,995
    Current Mortgage (12/04/18) £246,637.06
    End Date Aug 2040 Original End Date February 2042
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