A real chance to go for it.

A question about : A real chance to go for it.

After many years of lurking on this forum, I think I should start a thread to keep me motivated.

Due to a fantastic bit of kindness by my father I have been gifted a chance to become mortgage free before my 40th birthday. Which would be amazing and really change my young family's life.

I have Ј81593 principle left on my mortgage (1 year left of 5 year fix). My father has offered to loan me 40k to use in an offset mortgage FOC, with the lump some becoming mine some time in the future, as long as nothing crops up on his side (should be fine he was an accountant so know his stuff, and does not take big risks).

I have seen a 5 year fix at 2.6%. Factoring in my early repayment charge on current fix, and the fee for the new offset mortgage. I could become mortgage free (presuming I do get to keep the 40k) one month before my 40th birthday in Jan 2020.

I have set my self this target, as doing it before 40 sounds good, and I beleive I can pay the Ј592 per month it will take.

Maybe I can do it quicker, but I currently find it really hard to make the Ј518 I pay at the moment. I know the last period outside of the fix might be harder depnding on the rate at the time. But trying to finish it in 5 years (Ј742 per month) is probably out of reach.

My fiancee is out of work at the moment, and my 4 year old is just starting school. So you never know, with a bit of luck and some very hard work I hope to up our income and reduce our outgoings, to really attack the remainder of my mortgage.

I have booked an appointment with the mortgage provider i have identified for the 7th Sep. They allready told me other the phone they should be able to lend me enough on my salary, so fingers crossed i get a fair valuation in order to meet the LTV. The houses either side of my (same build) have gone for 138k and 142k in the last couple of years so I should be OK.

Will rty my best to keep this update as I go. Will try and do SOA to see if this is not pie in the sky.

Best answers:

• that's sounds brilliant, especially if its the catalyst for MF!
• Well I had the meeting. I was a bit a struggle to get them to loan me what I needed. In the end by dropping my salary sacrifice for child care couchers down to Ј50 from Ј243 per month, it allowed me to borrow the amount needed.
  I just need my next payslip with confirmation of the change before I can preceed, but the rate has now been reserved for me. I have ended up going for the offset 5 year fix at 2.99% as the 2.64% offer did not cover solicitors fees, so would have cost me more money over the 5 years.
  The amount I will need to find each month to be mortgage free by Feb 2020 is about Ј610 per month.
  My partner has a couple of job interviews lined up this week. So hopefully she can be in work before the new mortgage starts, so we can get off to a possitive start.
  If we do have emplyment issues in the future, I love the flexability of the payments on the new mortgage. It will allow us to have a few months at lower rates if needed, which will save us from the current panic when by partner is out of work.
• The greatest events all start with small steps. You are now on the road! Congratulations and may your journey be a happy one.
• So I got my appllication pack in the post this morning.
  Some bad news. They will only lend me Ј78,578. So i'm going to have to talk to my dad to see if i can use some of his pot of money, to pay off the remainder of the existing mortgage.
  I should be able to pay money into the pot to get it back to the original amount quite quickly, so hopefully he will say yes.
  The rate has also gone up since Saturday to 3.04%, which is annoying, but does not make much difference, due to how quickly I'm looking to pay off the mortgage.
  I have decided to keep track of my other debts in this thread, as I really want to get these out of the way, so I can really go after the mortgage:
  All 0% credit cards
  Partners:
  RBS Ј256
  Halifax Ј558
  Tesco Ј1027
  Santander Ј1027
• Hi, I have only recently started my own MF diary but have been a lurker like you for some time.
  We have an offset mortgage and the flexibility is absolutely brilliant. These types of mortgages make overpaying so much easier and I enjoy seeing the balance reduce each month or whenever I make an overpayment.
  We had 0% credit card debt too but paid this off late last year. Not sure if it's very MSE to pay off 0% credit but after years of juggling balance transfers I wanted all debt gone and to focus on the mortgage only.
  So good luck to you on your mortgage free journey. We should reach mortgage freedom at around the same age
• Another offset fan here. I know our deal isn't the best at 3.9% with more than 50% equity but last month I bought a car on my switch card and I am currently funding an extension while loading all purchases onto a 0% card. I have some shares from a share save scheme to sell in the next month which will go straight in. I know our endowments are way off target so being able to pay off the outstanding amount in other ways is fabulous. It is a pretty good online system too so I always know where I am financially. Of course I have a spreadsheet too which predicts my MF date.
• Thanks for the thumbs up on offset mortgages guys. It does look really good for me on the spreadsheet, but it is good to get some good reviews on here.
  Got some fantastic news yesterday. My partner has got herself a new job after being out of works for a few weeks. She starts Monday. I can just about cover all our bills with my income, so hope to use most of hers to get rid of the debt over the next few months.
  I sent the mortgage application off on Monday, so fingers crossed on that. I hate filling in paper work, and this one was about 10 pages. hopefully everything is correct, and I have included all the correct statements and payslips.
• Happier Me, I had not realy considered paying off 0% CC as non MSE. My father is\was an accountant (I don't think you can retire from being an accountant it is more a state of mind). and I was raised to pay for everything upfront, so I'm itching to pay off these 0% accounts despite it being the mortgage interest which is costing me money.
  Maybe I have things the wrong way round, but mortgage debt is more acceptable in my mind (I still want to get rid of it hence this thread).
• I would keep the 0% cards as long as you have the money to pay them off when they are about to become not 0% - preferably in the best interest paying account you can find which may well be an offset mortgage. There are also some decent regular saver accounts if you get a really low offset mortgage rate.
  The best way to milk your offset mortgage (as long as it calculates interest daily) is to pay for absolutely everything on a CC and then pay off in full at the end of the month, unless it is 0% in which case you just make the minimum payment and save the rest elsewhere. I never have any cash on me. A Ј3 trip to the supermarket will still go on a card as it costs me no more and saves me a tiny bit of mortgage interest by not taking that cash out. It's the tiny bits adding up that get you there quicker.
• Thanks MallyGirl.
  I know you are correct. I think I will just need time to get used to the mindset. I will keep the 0% card on minimum payments for the first few months and see how I go. If it does not keep me awake at night I will continie to follow your example :-)
  I'm not really a cash person, so I allready put everything on my card which I pay off in full. So that part should come a bit easier to me.
  The mortgage interest will be calculated daily, but the pot will not be my current account, so I will need to be on the ball over transfering money about.
• offset fan here too.
  We were fortunate in getting one at the lowest rate they've been for some time, but it really does give such flexibility on how and when you save. It allowed us a lot of flexibility and has resulted in freedom even though rates aren't as competitive. Keep up the good processes you have in place
• Finally my old mortgage has been completed. YIPPEE
  It was a stupid hold up caused by the ‘free’ legal team provided by the new lender (you get what you pay for). They managed to lose a document I sent to them 3 times, only to find the original when I started chasing them daily! This was very annoying as the form had to be signed each time, by myself and my partner in front of a witness
  So it really is time to crack on, as a few months have been wasted. I have some nasty bills coming this month (Christmas and masses of car tax), so I may be limited in how much I can top up my offset account with L.
  The other half has gone slightly less mad on the spending this Christmas, but appears to buy stuff every day in the last week despite telling me she had got everyone’s presents sorted.
  These ‘stocking fillers’ plus some booze for hosts etc totalled Ј336 since the 23rd! So think I need to put my foot down even more next year.
  The first payment on my new mortgage comes out on the 21st January. I now have a cash card for taking money out of my pot, but still waiting on online banking password, so I can monitor the account properly. I guess part 12 and 13 of the deluge of letters they have been sending me have been delayed!
  Main task this week is to confirm the end dates on my 0% credit cards.
  Mortgage Principle:
  Start: Ј81593 Last Update: Ј81593 Now: Ј78578 -3015
  Savings Pot:
  Start: 0 Last Update: Ј0 Now: Ј37111 +37111
  Mortgage Remaining
  Start: Ј81593 Last Update: Ј81593 Now: Ј41466 -40127
  Partners CC:
  RBS:
  Start: Ј256 Last Update: Ј256 Now: Ј156 -100
  Halifax:
  Start: Ј558 Last Update: Ј558 Now: Ј458 -100
  My CC:
  Tesco: 0% Ending July 2014
  Start: Ј1027 Last Update: Ј1027 Now: Ј909 -118
  Santander:
  Start Ј1027 Last Update: Ј1027 Now: Ј924 -103
• Well it has been a very eventfull first month on my mortgage free journey. It started off with my dad lending me 10k more than expected. He does want this back, but it is saving me interest for the time being. I'm going to include it in my mortgage free calcualtions, as it will get complicated otherwise.
  The next big event was my other half losing her job, just when it looked like going perm. Her direct and line manager wanted her to stay on, but somone else on contract got moved into the roll from another department. I presume to save on redundency.
  So that left my Mrs out of work on 1 weeks notice. They even asked if she would stay on to do the handover, to the person taking her job, who had no idea what they had to do! Don't you just love local government. The whole recruitment process took 4 months!
  My other half has already found new work 3 days a wk, near where I work, but at a much lower pay grade. She also has work lined up for the remaining 2 days, and is waiting on a police check before she can start. She will be paid monthly, so we will have a bit a time making ends meet before her first pay day.
  The good news is I did amange to pay the mortgage is planned. Ј334 on the balance and a extra Ј300 into the pot.
  Mortgage remaining Ј31,497.80
  Mortgage free Jul 2018!! (plus get the 10k back to my dad at some point).
  Credit cards in a bit of a mess. With the loss of her job, I decided to consolidate some of the outstading money onto my new 16 months 0% card. I will get it all written down when the dust settles.
• Partners CC:
  RBS:
  Start: Ј256 Last Update: Ј156 Now: Ј0 -156
  Halifax:
  Start: Ј558 Last Update: Ј458 Now: Ј118 -340
  My CC:
  Tesco: 0% Ending July 2014
  Start: Ј1027 Last Update: Ј909 Now: Ј736 -173
  Santander:
  Start Ј1027 Last Update: Ј924 Now: 0 -924
  New Halifax: Ending May 2015
  Start Ј 1994 +1994
• Another eventfull month. I was hoping this would all be easy, but life is never that simple.
  The better half has been enjoying her new jobs, but is earning over 10k pa less than before, so we have had to make some cut backs.
  I ending up putting a small amount overall on the 0% credit card (total cc amount Ј142 up).
  I also failed to overpay the mortgage in Feb :-).
  On the positive side an op my better half has been waiting a while file took place, so hopefully she is now back to full health. She has also landed a short term contract full time back at her usual pay grade.
  It's only short term cover for someone off long term sick, but hopefully it will go longer term,as it is a good job, and only a 15 minute commute.
  Typing this out has cheered me up a bit despite me noticing an error in my spreadsheet. A bad month and I still got just a bit closer to being debt free :-).
  Previous Mortgage: Ј31,243
  Mortgage remaining: Ј30,988
  Mortgage free Jul 2018!! (plus get the 10k back to my dad at some point).
  Partners CC:
  Halifax:
  Start: Ј558 Last Update: Ј118 Now: Ј0 -118
  My CC:
  Tesco: 0% Ending July 2014
  Start: Ј1027 Last Update: Ј736 Now: Ј589 -147
  Halifax: Ending May 2015
  Start Ј1994 Last Update: Ј1994 Now: Ј2401 +407
• Hello,
  Although you're obviously comparing your progress against your "ideal world scenario" situation and possibly feeling a little disheartened from it, from my outside perspective you seem to be pushing forward really well. You're definitely on track and chipping away at things. It's lovely to read.
  You've achieved a fair bit in such a short time. You should take some time to look at that and congratulate yourself and your partner.
  Lovely to hear that she's the right side of that operation now and back to good health.
  MT x
• Thanks for the reply. It is a big help getting it all written down. It did really cheer me up yesterday, that despite having what I felt was a rubbish month with finances, that I still chipped a bit away at the overall debt.
  Mortgage free still feels a long way away, but im hoping our life now calms down a bit, and I can get into a nice habit of overpaying the mortgage, while chipping away at the 0% cards.
• Calmer month this month. My dad wanted the extra money back. He asked for the money - my fees and overpayments to get the new mortgage.
  So I ended up paying him back Ј7111.62. Glad it is out the way, as I can now see my true target to be debt free.
  2 Mortgage payments since my last update, Managed Ј900 in overpayments as my quarterly overtime was paid. Will be using the remained to pay off the tesco cc this month.
  Myself and the mrs had hen and stag parties for my sister\future bil, so that set us back about Ј600 that we did not have. Still most of that went onto the 0% card over the last few months.
  Previous Mortgage: Ј30,988
  Mortgage remaining: Ј36,723 (+5725) but in real terms -1386 on total debt.
  Mortgage free Was Jul 2018 NOW Jul 2019!! (+12 months)
  My CC:
  Tesco: 0% Ending July 2014
  Start: Ј1027 Last Update: Ј589 Now: Ј576 -13
  Halifax: 0% Ending May 2015
  Start Ј1994 Last Update: Ј2401 Now: Ј2485 +84
• Another mixed month in my household, but a good month in terms of debt repayment.
  The Mrs is looking for work again. The long term sick employee she was covering for has returned to work. So she got a weeks' notice last wk. I will get her last week's money on Friday, so hopefully she can find something else quickly.
  She has decided to volunteer for a local charity re housing advice, while looking for work. I think she will enjoy doing this, and it should look good on the cv.
  I got paid my first ј overtime, so was able to pay off the Tesco cc just before the 0% term expired.
  I also got a small profit share payment from my employer this morning, which will cover the money I usually get from the Mrs for another wk
  Previous Mortgage: Ј36,723
  Mortgage remaining: Ј36,181 (-542)
  Mortgage free July 2019 (No change)
  My CC:
  Tesco: 0% Ending July 2014
  Start: Ј1027 Last Update: Ј576 Now: Ј0 (-576)
  Halifax: 0% Ending May 2015
  Start Ј1994 Last Update: Ј2485 Now: Ј2517 (+32)
  So Ј1086 closer to debt free this month :-)