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  • FIRST POST
    • VDOT47
    • By VDOT47 30th Oct 17, 1:32 PM
    • 155Posts
    • 498Thanks
    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 c7000.


    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 6
    • kuratowski
    • By kuratowski 28th Apr 18, 9:10 PM
    • 55 Posts
    • 85 Thanks
    kuratowski
    Thanks Kittenkirst. I just wish the total could come down even quicker! [...] Does anyone else ever feel depressed that this is such a long journey?
    Originally posted by VDOT47
    Yes, exactly this! I think it helps to run the MSE overpayments calculator once every so often to remind yourself how many years you will ultimately shave off the mortgage... Helps me, anyway
    • gallygirl
    • By gallygirl 28th Apr 18, 10:03 PM
    • 16,644 Posts
    • 109,838 Thanks
    gallygirl


    Does anyone else ever feel depressed that this is such a long journey? I know that we are doing very well by all reasonable standards in terms of overpaying/saving each month, and that in theory our equity in our house is increasing by 25,000 at least each year, yet I still feel very miserable on occasions that it still isn't enough to allow me to move my little family into a house where we will be totally happy, rather than just mostly happy but having to live with compromise in terms of location/noise etc :-(
    Originally posted by VDOT47
    It IS a long journey, no matter what you do. But you are taking steps to make it shorter so take comfort from that .

    I found it very useful to have lots of mini-targets along the way, along with a groovy spreadsheet of course . I know you are planning on moving but treat the mortgage as if you are staying put. Mortgage interest has just dropped below 15 so it will be a while before it goes below 14. How long before it goes below 14.50? How long before you've paid off 10%, 15%, 20% etc? Do you have a regular day you make overpayments? Choose a date and a nominal amount of say 200 if that is what you can definitely afford every month. Stick that on the spreadsheet along with your normal monthly payment. What's the estimated pay-off date? If it's say the 30th of a month as that's when your mortgage payment comes out, how much do you need to bring it forward say two weeks, so that your overpayment will be the last payment? Can you find that extra down the back of the sofa etc? Then how much to bring it forward another two weeks etc? And obviously it will come forward anyway if you pay more than 200 extra. Make it a game - Beat the Spreadsheet .
    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"
    • VDOT47
    • By VDOT47 15th May 18, 10:03 AM
    • 155 Posts
    • 498 Thanks
    VDOT47
    Not much doing here. Going to be a quiet few months on the overpayment front.
    Original Mortgage (Feb '17) 269,995
    Current Mortgage (03/09/18) 242,217
    End Date June 2040 Original End Date February 2042
    • VDOT47
    • By VDOT47 6th Jun 18, 12:04 PM
    • 155 Posts
    • 498 Thanks
    VDOT47
    Still nothing to report - May was the first month since November that no additional overpayments were made (aside from the DD which is 30 over the required monthly repayment).


    Does anyone have any gut feeling on the following quandary? As avid readers (as if there are any!) of this blog will remember, I borrowed just over 10,000 on a 0% money transfer card to make a large lump sum overpayment to the mortgage. I also took out a 0% purchases card, to fund various home improvements, holiday costs etc and this is now basically maxed out at 10,000 too.


    Both cards are on 0% for about another 2 years, so are costing me nothing in the short term, and the combined minimum monthly payments of 200 are manageable. Ordinarily I would just leave these and then look to balance transfer as much as I can in 2 years to keep the money tied up at 0%, rather than using savings to pay the cards off.


    However, I think we are likely to be looking at making an application for a larger mortgage in about 18/24 months time as we aim to move house then. So, my quandary is: which will get us a better mortgage offer (both in terms of amount we can borrow and also in terms of interest rate) - using savings to reduce the mortgage balance and thus give us a better LTV and deposit (but having c. 17000 of debt on my credit records and affordability scores) OR saving up to pay off the card debts, but inevitably having less equity in the property when we sell??


    My gut says I would prefer to take the first option, and I know the answer is to get a mortgage broker to run some calculations based on each scenario, but I'd be interested to know if anyone has any thoughts or similar experiences?
    Original Mortgage (Feb '17) 269,995
    Current Mortgage (03/09/18) 242,217
    End Date June 2040 Original End Date February 2042
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 7th Jun 18, 8:45 AM
    • 705 Posts
    • 3,137 Thanks
    SuperSecretSquirrel
    I don't know, but my gut instinct is the opposite of yours. I imagine 20k of unsecured debt to be pretty toxic to a mortgage lender. I'm stoozing myself, but would be paying the balances off ahead of time if looking to move house with a mortgage anytime soon. Also, keep in mind any transfer fees if planning to balance transfer. I'm not seeing many no fee deals these days, most seem to charge around 3%, which would likely negate any gain from savings. Check out the MSE credit club to get a feel for things

    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)
    • greent
    • By greent 7th Jun 18, 2:24 PM
    • 7,339 Posts
    • 74,401 Thanks
    greent
    I'd also go with the opposite to you, VDOT (so in agreement with SSS) - as an ex-banker I would have preferred less CC debt with less equity than more equity and higher CC debt. However, things have changed now. But as far as affordability goes, I think more attention is actually paid to that nowadays than when we last moved (12.5 years ago) - which seems another good reason to reduce short term debt imo.
    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) 6100/7500
    Net sales 2018 655.15/1000 PAYDOX18 (#15) Done 18918.90
    • VDOT47
    • By VDOT47 8th Jun 18, 9:47 AM
    • 155 Posts
    • 498 Thanks
    VDOT47
    Thanks both, it certainly all gives plenty of food for thought!
    Original Mortgage (Feb '17) 269,995
    Current Mortgage (03/09/18) 242,217
    End Date June 2040 Original End Date February 2042
    • VDOT47
    • By VDOT47 22nd Jun 18, 8:34 AM
    • 155 Posts
    • 498 Thanks
    VDOT47
    Brief update - balance is down to below 245,000 after this month's DD. Just over 65% LTV.


    In better news, I got a payrise so will have a bit more ability to make overpayments again from this month.
    Original Mortgage (Feb '17) 269,995
    Current Mortgage (03/09/18) 242,217
    End Date June 2040 Original End Date February 2042
    • VDOT47
    • By VDOT47 25th Jun 18, 2:16 PM
    • 155 Posts
    • 498 Thanks
    VDOT47
    So the 'plan' now is to have the mortgage balance down to 200 - 210k by spring 2020 and then assess if that leaves us in a good enough position to move at that stage to our 'forever' home. If not, then we plough on for another 6 months and re-assess (and so on, and so on).


    So I need to keep overpaying regularly, but also to build up at least 10,000 in savings to wipe off at least one of the credit cards when the time comes to make a mortgage application.


    Payday on Wednesday, so I'll do some sums to see how much spare I can throw at an overpayment.
    Original Mortgage (Feb '17) 269,995
    Current Mortgage (03/09/18) 242,217
    End Date June 2040 Original End Date February 2042
    • VDOT47
    • By VDOT47 28th Jun 18, 11:18 AM
    • 155 Posts
    • 498 Thanks
    VDOT47
    Managed to make an overpayment of 203.59 this week.


    Probably won't achieve much better in July, but August has a regular saver maturing and should see a work bonus which will allow for a much better overpayment month.
    Original Mortgage (Feb '17) 269,995
    Current Mortgage (03/09/18) 242,217
    End Date June 2040 Original End Date February 2042
    • VDOT47
    • By VDOT47 5th Jul 18, 9:11 AM
    • 155 Posts
    • 498 Thanks
    VDOT47
    Signature updated - our letter from mortgage company today confirming the June overpayment shows that the loan has 22 years remaining, so end date adjusted forward to July 2040! Saved ourselves 17 months so far!


    Short term aims are:
    1) to get remaining term down below 20 years ASAP
    2) to reduce daily interest from approx. 14.20 to below 13.50 by the end of the year
    3) get below 65% LTV - should automatically happen with July and August DDs (60% LTV would mean reducing balance to 224k - a mid term aim to achieve by next Easter)
    Last edited by VDOT47; 05-07-2018 at 9:16 AM.
    Original Mortgage (Feb '17) 269,995
    Current Mortgage (03/09/18) 242,217
    End Date June 2040 Original End Date February 2042
    • edinburgher
    • By edinburgher 5th Jul 18, 10:24 AM
    • 11,201 Posts
    • 60,133 Thanks
    edinburgher
    I would have said that the choice between debt and more equity vs. no debt and less equity will be inherently tied to a) your salary and b) any affordability calculations carried out by prospective lenders. That said, from my own experience of plootering about with "how much can I borrow?" calculators, debt does seem to have a disproportionate impact on how much financial institutions will lend you, no matter how "affordable" the minimum payments might seem. I do not think that their lending/risk models think along the lines of "I can bounce this from BT card to BT card for X years", I think they're based on "potential borrower has a debt - assume this must be paid off over X years". Their X is much shorter than yours, IYSWIM?
    • VDOT47
    • By VDOT47 5th Jul 18, 10:37 AM
    • 155 Posts
    • 498 Thanks
    VDOT47
    Yes, indeed! I think I have decided to pay one of the cards off before we move, and the other will be down to about 7k by then - if this seems to be affecting the amounts we can borrow from lenders at that stage I will think about paying the other card off rather than BT it.


    As such, overpayments will reduce slightly over the next 18/24 months, while we prioritise having enough in savings to pay off one of the cards.
    Original Mortgage (Feb '17) 269,995
    Current Mortgage (03/09/18) 242,217
    End Date June 2040 Original End Date February 2042
    • VDOT47
    • By VDOT47 10th Jul 18, 10:12 AM
    • 155 Posts
    • 498 Thanks
    VDOT47
    So, the monthly DD went out today. We pay 1200 each month, and the interest added is approx. 440 pcm at the moment, so today's payment should reduce the balance by 760 and bring it to approx. 244,140.


    This month is looking very tight on funds, but I would love to make the 140 overpayment to get it down to 244k. Will have to look at my budgets to see if any can be spared, and also try to be super good at not spending too much over the next couple of weeks!
    Original Mortgage (Feb '17) 269,995
    Current Mortgage (03/09/18) 242,217
    End Date June 2040 Original End Date February 2042
    • VDOT47
    • By VDOT47 30th Jul 18, 10:46 AM
    • 155 Posts
    • 498 Thanks
    VDOT47
    So the end of another month rolls around!


    I had 2 weeks parental leave this month (unpaid) so the exact amount of salary I would receive this month was a bit of an unknown, but it actually came in a little higher than I had budgeted for, and we made some savings elsewhere during the month, so I managed to make an overpayment of 413.34 today.


    Should see us below the 244k mark now, and will be close to 243k once the DD goes out (and interest gets added .....boo!) mid-month. If that is correct then, based on the purchase price of 374k, we would have edged just below 65% LTV! (243/374 - 64.9%)
    Original Mortgage (Feb '17) 269,995
    Current Mortgage (03/09/18) 242,217
    End Date June 2040 Original End Date February 2042
    • VDOT47
    • By VDOT47 13th Aug 18, 4:02 PM
    • 155 Posts
    • 498 Thanks
    VDOT47
    DD went out on Friday, so we should now be below 244k balance, although annoyingly I seem to have forgotten my online log in details so can't check the exact balance at the moment. We do get a letter every month confirming the overpayment so when the next one comes through I'll at least know what the balance is at that point!


    We seem to have had a very spendy couple of months, which is not good. I am hoping to find a few spare pounds in our account at the end of this month, together with a regular saver maturing and a bonus being paid - should make for a very good overpayment this month!
    Original Mortgage (Feb '17) 269,995
    Current Mortgage (03/09/18) 242,217
    End Date June 2040 Original End Date February 2042
    • chelseablue
    • By chelseablue 13th Aug 18, 4:08 PM
    • 2,561 Posts
    • 2,994 Thanks
    chelseablue
    Know what you mean about a spendy few months, just ordered my son a new car seat...140 (was reduced from 180 though)

    Plus I need a new tyre for my car, oh and wiper blades! Tyre should be about 35 so not too bad.

    Also had the car tax renewal letter in the post this week for husbands car, 66 for 6 months or 120 for the year.

    Its never ending!
    Mortgage starting balance 231,000
    Mortgage after Year 1 225,000
    Mortgage after Year 2 218,000
    • VDOT47
    • By VDOT47 17th Aug 18, 11:07 AM
    • 155 Posts
    • 498 Thanks
    VDOT47
    I've been pondering some of the jobs that need doing about the house over the autumn. As we do not intend to be here forever (2 years max) these will be smaller, cheaper jobs which will certainly improve the look of the house (and therefore hopefully not only improve our enjoyment of it, but also make it more saleable in due course) rather than major renovations.


    We have agreed that the downstairs needs redecorating. As our living room leads directly to the stairs, it would make the staircase look even more tatty if we were to just redecorate the living room but not the stairs. And once the stairs are done, it makes sense to also do the landing, upstairs doors etc. So we are getting a decorator who has been recommended by a friend to come round in the next couple of weeks to give us a quote.


    The second area that needs attention is the garden, and I will be asking a friend who runs a gardening company to come round to quote. He is usually very busy, so I may need to get him booked in a few weeks in advance.


    I am hoping that the total cost of these two areas will be less than 1000. Fingers crossed.


    I also need to dedicate a couple of Sundays to clear out the garage and do some trips to the tip.


    I would like to get this all done before Christmas. Wish me luck.


    Another week until payday, but a regular saver matured yesterday so I now have 3697.50 ready to be used as an overpayment at the end of this month. It only earned 97.50 over the year, but it seems sensible to do it this way, rather than paying 300 extra a month directly off the mortgage (5% reg saver, compared to 2.19% mortgage).
    Original Mortgage (Feb '17) 269,995
    Current Mortgage (03/09/18) 242,217
    End Date June 2040 Original End Date February 2042
    • VDOT47
    • By VDOT47 22nd Aug 18, 4:05 PM
    • 155 Posts
    • 498 Thanks
    VDOT47
    New regular saver opened and funded with 300 for this month.

    Eagerly awaiting payday this month to allow for a nice overpayment! Will be nice to get into the 230ks, might bring daily interest below 14 too!


    Away from moneysaving, I am really pleased that we seem to be past the worst of the summer. Don't get me wrong, I like it when its sunny, but this year was far too hot for far too long and made work, sleeping and just generally doing anything pretty unpleasant. The nights drawing in are also a pleasant sight, as it means that the annoying neighbourhood brats have to go back inside their houses earlier to annoy their own families, rather than the whole neighbourhood!
    Original Mortgage (Feb '17) 269,995
    Current Mortgage (03/09/18) 242,217
    End Date June 2040 Original End Date February 2042
    • VDOT47
    • By VDOT47 24th Aug 18, 9:06 AM
    • 155 Posts
    • 498 Thanks
    VDOT47
    Slight change of plan - given the desire to move (and therefore apply for another mortgage) within a couple of years, and the inherent need to pay off the credit card balances at the time of that application (if necessary), I've decided to use my regular saver money and bonus to start to build up a savings pot of accessible money (rather than having it tied up in the mortgage).

    I've still found enough slack in the budgets to overpay 559.27 this month though. When I get the letter through confirming the overpayment I will update the signature.


    A quick review of my records suggests that since I started this journey in November, I have averaged overpayments of 415 pcm plus about 30 each month from the DD being rounded up, so 445 pcm on average in total. In addition, there was the one off payment of 11,000 from the money transfer credit card.


    Even with no more big lump sum payments, if I averaged 445 pcm for the next 21 months (up to intended moving date of spring 2020) together with regular capital reduction from standard overpayments each month it should bring the balance down to about 218k. My aim is to whittle this down a little further to 215k, as well as building up savings sufficient to pay off a good chunk of the credit cards to allow for a better mortgage offer, and also to save up funds to pay for moving costs and SDLT. It's a big ask!!


    Have just discovered the Early Retirement Wannabee thread on the savings board - some interesting views on there which I need to take on board and have a good think about.


    I also have started to reconsider if the title of this thread is correct - do I want to be mortgage free by 55, or simply mortgage neutral? I also really want to bring it forward to age 50, but that might just be being greedy! Hmmm, plenty to ponder.


    Have a good weekend!
    Last edited by VDOT47; 24-08-2018 at 9:25 AM.
    Original Mortgage (Feb '17) 269,995
    Current Mortgage (03/09/18) 242,217
    End Date June 2040 Original End Date February 2042
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