Ramjet's Mortgage Free Mission

A question about : Ramjet's Mortgage Free Mission

So it starts...

Current mortgage is Ј76400.96 - with monthly repayments currently at Ј798. The mortgage is 2 years into a 5-year fix at a rate of 2.65%. Included in the repayment is approx. Ј40 worth of overpayments. I would be allowed under the terms of the mortgage to pay an additional Ј120 per month whilst the fix is in place.

Based upon the above, the mortgage will be paid off in Jan 2024. However, I have a loan with a small outstanding balance of Ј1300ish which I should clear in the next month or so - leaving me at least Ј300 extra available. This will allow the extra Ј120 to be paid off, bringing forward the repayment date to Jan 2023.

However, I would like to bring this date forward to around mid- 2019, just over 5 years. Whilst my overpayments are currently limited, I can build up a pot and make a substantial payment when the fixed period ends, and then up the monthly repayments to the required level.

5 years = 60 repayments = Ј1273 per month. With the Ј120 increase, would take my repayments to Ј920 - meaning I need to save Ј353 per month over and above to make this plan work.

Does that seem right?

My income is approx. Ј55k of which net income is approx. Ј3700 per month and the monthly bills excluding food, fuel etc is approx. Ј1500. Add in the monthly spend, leaves about Ј1500 to play with - but I have had a few big spends in the last couple of months, and have paid off Ј7k from the loan since Oct 14.

Best answers:

• Whoops - still living in 2014! So only 50 payments left. I thought my maths was suspect!!
• Great job i have a similar amount mortgage 68k i recently got im at the start of my journey and am paying much higher interest due to my situation currently.
  With your wage your on you could OP and save extra on the side and pay it off in a few years time if you can save most of that 1500 extra you have
  Good luck ill look forward to following your journey :]
• Ј1528 per month then, so need to put aside Ј600 per month.
• Day 2.
  Another Ј200 paid off the loan - taking the balance down to Ј1161.36. It will be a nice little psychological boost to get it below the Ј1000 mark. And with the regular payments of Ј300 per month - it should be gone in 4 months even if I make no further repayments. However, I want it gone by April, then I can turn my attention to the mortgage.
  However, I do have 3 mortgages in total. Two in connection with my family residence - with a total Ј76400 outstanding (in post 1). I have a further mortgage on a rental property I own. Outstanding balance of Ј77600 against a current value of approx Ј145k. This is currently generating a net income of Ј546 against a repayment mortgage of Ј378. Since this is an investment, I am parking this until the mortgage on my family home is paid for.
• Calculations would suggest if I can save Ј1000 per month, then I should build enough savings to pay off the mortgage by Mar 2019. This, does not take into account any interest generated on the savings or interest saved on the mortgage through overpayments. Rather than recalculate based upon these changes, I'll think I'll keep it simple. Up the overpayments to the max allowed during the fixed rate period, and still try and save Ј1000 per month, once the loan is paid off. The loan should given me Ј400 towards that, need to budget to sort out the rest.
• Another Ј12.34 paid off the loan. Small amount but all helps. I feel I obsessing about paying off this loan at the moment, I like adjusting the numbers on my spreadsheet!
  However, I want to get to the stage where the monthly loan repayment disappears altogether, since this will boost significantly my disposable income.
• I think taking into account the saving without any interest is a good idea any extra for nothing is a bonus :]
  Defiantly doing the right thing paying off the loan first then you can do the mortgage :]
• The loan, now being relatively small means it is a quick win, and a good psychological boost. Likewise, having 2 mortgages on my family house is useful, since one is about Ј16k the other is Ј60k. The smaller seems achieveable to pay off. If I can some muster the effort to save Ј1k per month, it's covered in just over a year, and keeps me on target. So that is what I am going to do. I would also like to target getting my mortgage balance equal to my annual salary. Current multiple is around 1.5. You should see my spreadsheet - it's like a brain dump!
• Good news!
  Just phoned in for a resettlement figure on my loan was surprised it was approx Ј880, reducing to Ј446 with an interest rebate. So the upshot is that the loan is repaid. Gone. Done!
  It's like christmas.
  Onto the mortgage!
• Total overpayments in place Ј150 per month or Ј1800 per annum.