A question about : FinancialBliss: My mortgage free journey…
OK. Where do I start? A quick hello I guess. Hello !!!
Anyone following the mortgage free in three MFiT thread may have noticed the occasional post there by me. I'm #20. Until now, I've been more of an observer than a poster on these MFW forums.
Recently, however, feeling a bit down in the dumps, I decided to play around with some numbers and see if I could arrive at a realistic mortgage free date. Previously, I'd gave myself various woolly targets that I wanted to achieve, e.g. clear current mortgage in less than my first mortgage term, in
I've decided that I want to be mortgage free by 12/12/12. This is just over 5 years (60 months) away, plus I like this date! This gives a fixed and published goal to focus on.
I'm intentionally leaving this first post quite short, but intending to follow up with further information along the way.
Mortgage spreadsheets.
1. Monthly mortgage reduction spreadsheet. See post no's 534 and 536 linked directly below:
https://forums.moneysavingexpert.com/...&postcount=534
https://forums.moneysavingexpert.com/...&postcount=536
2. Annual mortgage reduction to monthly payment. See post no. 712 linked directly below:
https://forums.moneysavingexpert.com/...&postcount=712
Aims for:
2008... (5 of 6 - 83%)
2009... (4 of 6 - 67%)
2010... (4 of 6 - 67%)
2011... (4 of 4 - 100%)
2012... (0 of 7 - 0%)
In numbers...
Mortgage free goal : 12/12/12
Months elapsed : 48/60 (80.0 %)
Months remaining : 12/60 (20.0 %)
Current monthly amount towards mortgage : Ј887.41 + Ј200 - see final push spreadsheet:
The last 100 steps: Countdown to being mortgage free...
The final push: The final push...
Nationwide estimate to be mortgage free : March 2014
My own current estimate to be mortgage free : August 2013
Graphically...
1) Mortgage balance summary - 12/12/12 schedule.
Snapshot of the mortgage balance over the course of a year, showing minimum, maximum and average mortgage balances. I've also plotted an example 12/12/12 time line and the original schedule up to 12/12/12 that I got when I signed up to the mortgage.
2) Mortgage balance summary - 25 year schedule.
Snapshot of the mortgage balance over the course of a year, showing minimum, maximum and average mortgage balances. I've also plotted an example 12/12/12 time line and the full 25 year schedule that we signed up for when we took out the mortgage.
Explanation (see post #153 - page 8 for further info):
Minimum (Blue): Minimum mortgage balance for the year.
Maximum (Red): Maximum mortgage balance for the year.
Average (Green): Average mortgage balance for the year.
Schedule (Pink): Original repayment schedule without any overpayments.
12/12/12 (Dotted Black): An example repayment schedule to clear by 12/12/12.
3) Payments, interest and net reduction.
Year by year comparison of payments made towards the mortgage, interest charged and the net reduction (payments - interest).
Explanation (see post #666 - page 34 for further info):
Green: Shows total payments I've made to the mortgage in any one year.
Orange: Net reduction of the mortgage balance for any one year.
Red: Interest charged to the mortgage for any one year.
4) Monthly mortgage interest.
This is the monthly mortgage interest, for each month since the mortgage started.
5) Daily mortgage interest.
This is the monthly mortgage interest divided by the days in that month, ie the daily mortgage interest per month for each month since the mortgage started.
6) Daily mortgage interest difference.
This is the difference between the daily interest in graph '5' for each month of the mortgage and clearly shows where the mortgage is dropping slowing (low daily interest difference) and where the mortgage is dropping quickly (higher daily interest difference).
When we dropped off the fixed rate, this had the effect of flatteing this daily interest difference graph. Added a second graph in which runs from April 2011 onwards and just shows the daily interest difference for our variable rate.
Other useful stuff...
BoE base rate analysis. https://forums.moneysavingexpert.com/...&postcount=896
I'll update the above numbers and graphs each month throughout my journey.
This diary follows my progress towards my mortgage free goal...
Thanks,
Financial Bliss.
Best answers:
- A bit more about 12/12/12.
Despite the MFiT challenge focusing my mind, attempting to be mortgage free by April 2010 is unachievable (for me). I'd have to pay out 2,637 per month on my mortgage - this is more than my take home pay!
Aiming for 11/11/11 is, I believe equally unachievable - I'd have to pay out 1,632 per month on my mortgage - over 80% of my take home pay.
Pushing back another year to 12/12/12 gives an approximate repayment of 1,318 per month. While this is a much more manageable figure, I'm going to initially be budgeting around 1,250 per month on my mortgage from January 2008. Reason to follow in a future post.
Come December 2012 - depending on how I've varied the monthly payments either side of 1,250 - this should leave me around 6k short. This isn't really a large amount to be short in the grand scheme of things - I've also a decision or two along the way to make that may reduce this deficit.
I think it's achievable / realistic. Plus, I like the date 12/12/12 written with a 2 digit year!
Mortgage should have completed in 2029 - (2004 start), so if I'm successful, that's a reduction from 25 years to 8 years and 9 months!
I've got everything to win and nothing at all to loose by trying…
-=oOo=- - Good Luck
- I too want to be MFI5. 12/12/12 That's the date for a party - Good luck
- Do you mind if I tag along wth you at your pace as you have a similar mortgage end date to me?
At present my mortgage should be cleared by 22/12/12 with a payment of Ј167.37.
I then have 8 months more that it will take me to save enough to clear what I owe my Mum and will have to make sure that our savings are up to date.
I find it quite exciting that I will only have a mortgage for another 5 years and 2 months. It doesn't quite seem real that we are that close to our goal (although I don't think it's going to feel that close for the next 5 years haha!)
TTFN, Kaz. - Wow! Thanks for the replies so far. This thread is barely 24 hours old!
Rather than give you my life history in one long post, I’ve ear marked some further short posts to give some more details about myself, why the diary, details about my current mortgage product etc, I’ll not list them all - but first I’ll answer the questions so far:
@IveSeenTheLight
Yes, we’re very happy with our current home. We only moved here in 2004 and started our current (second) mortgage at the same time, trading up from a 3 bedroom terraced to a 4 bedroom detached.
@Kaz2904
Sure you can tag along. 22/12/12 – 12/12/12 what’s a few days among friends. I see you also joined in October 2006 too, although you’ve been a tad busier than me with those there posts!
Thanks,
FB. - Mr Bliss.
I’m 37, so far my entire career has been in IT working as a software developer. I’ve been in a relationship with Mrs Bliss for, ahem, 18 (no that’s not a typo) years, university studies keeping us apart for a good few years, but getting married in 2002.
Mrs Bliss.
Mrs bliss is from New Zealand, 36 and has spent her very short career to date as a cartographer. Unfortunately, she’s been made redundant more times that I can remember. Think it’s 3 now. The month we decided to have kids she was made redundant for the third time!
Mrs Bliss currently stays at home and looks after our two blisslings and is the unsung hero in this relationship. I’ve got the easy part going to work!
Blissling #1 – dear son.
Aged 3 Ѕ. Placid, reasonably quiet, can hold a good conversation with you and is very inquisitive. Has recently started quoting back sayings we use on him, eg “… dad, I’m getting old”, when I'm telling him to hurry up.
Blissling #2 – dear daughter.
Aged 15 months. Doesn’t always sleep for full nights, noisy and eating us out of house and home! Recently starting to say the odd word, but a really effective communicator via nods and gestures.
Not planning on having any more kids!
FB - Hiya fb
Awww, this is so sweet, with the little blisslings on board too.... Your MFI date is two months after my mortgage is supposed to finish anyway, in October 2012. In October 1987 (3 weeks before the hurricane in the south east) that seemed a very long time away, I can tell you right now! So I'd *better* be mortgage-free by the time you are!
I have lots of plans before then: a lot of renovation, getting my savings up to speed, all sorts, but it will depend on a second income stream I've been working on but that hasn't come to fruition yet.
I'll be keeping up to date on your thread. Good luck! - Three reasons mainly: choices, choices and choices.
Quick rule of thumb when borrowing – borrow as little as possible any pay it off as quickly as possible.
I’ve previously been labeled as “strange” when mentioning I wanted to pay my mortgage off early – my reply to that is you’d be strange not wanting to.
In fact, providing you’ve no high credit card debts or loans (I’ve got two credit cards used for various purposes – each paid off in full each month, plus I’ve got a car loan with 4 payments left on it), I think you’d be mad to not look into paying something off your mortgage.
Had to revert to an initial 25 year term for this house for the numbers to work, as we budgeted everything on one wage. I’ve already taken 8 years off my current mortgage – my mortgage should end when I’m 59, and in my opinion that was too late.
Addressing the mortgage gives me the choices I’m looking for. Mrs bliss could end up not needing to return to work, although I suspect she will eventually return once #2 starts school – I could switch career without too much worry about salary, less financial worries etc, etc.
FB. - I was working to be mortgage free and loan free by December 2012 but I really like the 12/12/12. Hope you don't mind if I tag along too and I have changed my signature from December 2012 to 12/12/12. It has nice ring to it
- I wish I'd known about the concept of paying the mortgage off years ago - before I had debts, it would have been so easy to get it down - a few less taxis etc (which I could easily afford) would easily have meant a couple of grand a year off the debt. Ah well, at least I've found out in time. As you say, FB, less debt gives more choices.
- I’ve been wanting to start one for a good while, but never really made the push / effort. Recently I’ve been a bit down in the dumps about the apparent lack of progress I’ve made this year with the mortgage.
However, I’m finding that thinking about this diary has focussed my mind and I’m actually in a very fortunate situation.
Not many people can manage a mortgage these days without two wages. Plus I’ve bought a car this year with a 12 month loan (we really needed a bigger / family car), and we’ve had two holidays and I’ve managed to make a small dent by way of over payments in the mortgage.
A bit of reflection and I feel much better!
One of the main reasons for a diary was a publicly stated goal. I’ll not be heart broken if I don’t meet this. On the other hand, I hope I won’t have to eat beans on toast via candle light for 5 years either
Another one was support from like minded people. On that note - have already got a few MFWs that are looking to be mortgage free in same time frame: kaz2904, karmacat (possibly?) and muppet81 – do I add these to my first post or shall we just keep it informal?
Thanks for listening,
FB. - So I’ve decided I want to to tackle my mortgage. I’m looking at a three prong strategy:
* Maximise income and minimise outgoings
* Overpay mortgage
* Manage existing savings better
* Maximise income and minimise outgoings.
I try to manage bills monthly via direct debit, unless doing this incurs a penalty.
Maximise income – I’ve just finished an 8 month stint of overtime, but I’m not planning on doing any more for a while, partly because I’ve not been offered any and partly to try and do the work / life balance thing.
Minimise outgoings – I’m sure I could probably do a little better here, but we don’t do that bad. At some point, I’ll probably post a full SOA, but I need to catch up on paperwork and re-do my very out of date budget.
* Overpay mortgage.
I’ve attempted to analyse various scenarios regarding either overpaying on mortgage or diverting this into savings until the end of 5 years. Didn’t save my calculations – will try and re-do and post here.
* Manage existing savings better.
We’ve got a small amount of emergency savings, plus some shares. We’ve been diverting the cash into two Lloyds TSB regular saver accounts – I pay tax on mine , but mrs bliss is tax free, so that’s 8% We also got in while the regular saver was a 2 year product, and we’ve just started year 2. Ends October 2008.
Other savings are in an icesave account, paying off the top of my head, 6.30% I think currently.
I’ll give something a try if I think I’ll save money for not too much effort, but finding the time can sometimes be the sticking point.
FB. - Got paid yesterday and paid a token 25.00 off the mortgage - extra repayment - suspect that's all I'll be able to afford this month.
Going shopping this morning for shoes for big little 'un - will post a round up for the week later - it's been difficult to find the time this week.
FB. - Hi,
Every little helps. Good luck next month - I haven't made any overpayments recently but DH finally managed to get hold of a wii today so that is our christmas shopping done.
DD wants a nintendo ds for christmas/ birthday so I emptied out her money box and she has Ј15 my sis will give her Ј10 and my Aunt has given her Ј20. Her Grandma is giving her Ј50 so she has almost got enough to get it.
I will probably start giving her a load of jobs to do around the house to earn some money as I feel it's a good motivator for her to be able to get this from her own money pooled with other peoples! - Don't talk about consoles! At our local out of town shopping centre, Sony had no less than 12 PS3's set up today with, I'm guessing 50" Hi-def TVs and 4 or 5 reps demoing / pushing the PS3.
Apparently, I "need" the 60Gb version so I can play my PS2 games. Didn't get one, but didn't get any shoes in the end either - #1 had only gone up 1/2 a size and didn't want to pay now and then pay again in a few weeks for another 1/2 size increment.
Kids down - just about to catch up on some TV viewing from earlier in the week. I'll try and post later about events this week.
FB. - A bit of a mixed bag here.
Work: It’s 9 years this week since I started with my current employer. I work in IT as a software developer; I never really expected to have stayed this long – took the job in 1998 during the pre year 2000 big rush, and not only got a good pay rise, I got a 10% IT scarcity allowance and various bonuses at points before and after 2000. Thought it would be just a stop gap job, expecting to move on after that, except I got promoted and I’m still there.
Shares: We’ve got Bradford and Bingley and Northern Rock shares – both conversion windfall freebies. Earlier in the year I switched from receiving a cash dividend to shares for both of the above, hoping that longer term they would be worth more than the cash. We’ve now got an additional 10 BB shares – total holding: 524.
We also got a letter from Northern Rock explaining about recent events and that various parties are interested in the company but it was early days. Nothing that I wasn’t already aware of, but it was a nice gesture, since the share holders are pretty much bottom in the pecking order after savers, creditors, etc. Total holding 1,000
Credit cards: Until this week had 3. Had a nationwide card which we haven’t used in a while and got a letter this week saying they’d closed the account. My main card is a Goldfish card. Had this about 10 years and like this for the loyalty scheme. Live within walking distance of a cineworld. Just redeemed some promotional points for 4 cinema tickets.
Other CC is an Asda card. Main use for this card is the 2p reduction on petrol offer, although it’s had a hammering this month as mrs bliss needed a replacement goldfish card – her chip was damaged – over use perhaps?
Always pay cards off in full and normally I’m up to date in Microsoft Money, but I’ve got a bit behind with keying them into money. Need to get a bit organised here, plus re-discover my desk.
Monthly savers: Just completed the first of a 2 year Lloyds TSB monthly saver. Got 137 and 170 (taxed and exempt) in interest. When the 2 years are up, I’ll probably throw the interest at the mortgage and look at something else to do with the capital. This is our emergency savings.
Swimming: Well not so much swimming but water confidence. The blisslings go to to a water confidence class and found out this week that it’s going up by 25%. Ok, only from 2.00 to 2.50 each, but when you say 25% it sounds a lot. Hope I’ not sounding mean here - I really don’t mind paying this at all. - Good to hear how you're getting on....Good Luck
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