Mortgage-Free Wannabe Welcome and Explanation

A question about : Mortgage-Free Wannabe Welcome and Explanation

Welcome to the new Mortgage Free Wannabe board. After watching the popularity of the Debt-Free Wannabe board which focuses on mutual support for people who want to get rid of their debts, I thought it would be fun to try the same with mortgages. It isn't about mortgages themselves, for that go to the mortgage board.

Why?

Paying off your mortgage is the best risk-free way to use your cash. Think of it like this:

If your mortgage is at 5% interest, by paying it off you get the effective return of 5% after tax. This means a basic rate tax payer would need to earn 6.25% and a higher rate taxpayer 8.33% before they were better off and there's no real way of doing that with a lot of money without taking a risk.

How far to go

I'm not a believer in forcing your finances. Start by doing a budget. Then go through your finances and see what spare cash you've got. This isn't about cutting back on everything, it's about running a niced balanced life with no waste to clear your mortgage.

In fact I'm very against forcing your finances - to see why read my past blog on it: Pay Off Your Mortgage In Two Years.

What to do to get started

I'm going to follow the pattern of debt-free wannabee as it works there. So why not start of by posting a statement of affairs (SOA) with all you financial details - though being careful to give no traceable info as this is a public forum. So detail your mortgage, incoming and outgoings, what you spend on. Then people can start talking about ways to improve your finances.

Also why not have a signature that shows people your progress. For example

Mortgage when started: Ј92,000
Current mortgage (date): Ј82,000
Mortgage free day: May 2013

So people can watch your progress and you can motivate yourself.

Good luck. I'm sure this board will develop its own way of working, can't wait to see it

Martin

Best answers:

• thanks martin!
  i was going to go it alone in attempt to do this with my brand new mortgage, have already done some spreadsheets, and WOW! this is just the incentive and support i need! (why didn't i think to suggest it?!)
  xx
• So glad you've started this forum, as we're just about to start to pay off more on our mortgage monthly and as my mortgage deal runs out next Jan I've started to research all the mortgages available to help along the way..
  I must say pay off your mortgage in 2yrs is quite extreme but to do it in 6 is quite achievable for us so your site gives me all the incentives I need.
  Cheers
• Ive got a mortgage that will allow me to overpay as much as i like, and also withdraw any overpayment i make, if i need to, so now, instead of savings, any extra i have, is going to go straight into my mortgage, it is def the debt i would love to pay off. The mortgage i have is very good, a good rate and very flexible, but anyone else wanting to pay more in must check that their mortgage company allows it, apparently, some dont!!!!!
• Here is another thread that covered a lot of this ground, perhaps it can be moved over to this board
  https://forums.moneysavingexpert.com/...d.html?t=87149
• I highly recommend paying off your mortgage at the first possible opportunity. My OH inherited some money when his father died last year and the first thing we did was pay off ours. I can't describe how amazing it is to not have to pay off the mortage any more - we save more, spend more and i have been able to reduce my hours at work to give myself time to try and get a music career that i've always wanted off the ground. It really changes your life. I know most people don't get the opportunity we did and it will require work and sacrifices from you guys, but keep at it - it's got to be worth it!!!
• Well our brand new mortgage starts in April - it's interest only for the 1st 3 years then switches to repayment. We've already decided to overpay slightly and more when the other debts vanish in 2008. We're only overpaying by Ј13.41 per month by upping the DD to a nice round figure, but it's a start
• Martin,
  Many thanks. Currently a Debt Free Wannabe... however, had already decided that once debts are paid, full attention would be given to our mortgage, and I've already got a spreadsheet that shows me when we are totally free. Fab idea, and look forward to joining in more nearer my Debt Free Day when I can then focus on this more.
  FF
• I'm thrilled to have had this new forum launched. Until I joined the MSE family I never really looked at my mortgage as a debt, more like something that everyone had. I always assumed we'd have it for at least 25 years possibly longer. I did try to watch the tv programme "Pay off your mortgage in 2 years" but found it too OTT and the whole format came across as unachivable.
  Having a forum like this is a far more realistic approach to the whole concept of aiming to be mortgage free. Lets face it, even saving a year off the typical 25 year mortgage is a saving of thousands, and every overpayment, regardless how big or small, is one more step to getting there.
  We are moving in a few weeks and our mortgage is taking a leap of gargantuan proportions. Currently it is Ј96K and change over 21 years but will be going up to Ј118K over 30 years!!! At this rate I'll be 56 by the time its paid off. I will be following this board with both interest and hope, aiming to get as much info and support as possible from like minded people. I have already managed to make time for an evening job and will be trying to put the money to one side for overpayments.
  Good luck to all of us trying to achive this, it really WILL be a life changer.
  Allison.
• I'm giving this a lot of thought at the moment. Basically we are thinking about moving (because our 3rd bedroom is small and we can't have a dormer loft conversion or extend on the side of our house). We have about 13 years to go on our mortgage and could comfortably overpay by at least a couple of hundred a month. It's a real dilemma. Accept that our youngest (rising 8) will just have to make do, overpay each month and be mortgage free in 6-8 years but only ever have a 3bed semi. But lots of cash to pay kids through college, make great investments/savings and have nice holidays. Or go back into the full 25 years at loadsamoney repayments every month for a bigger and better house and say aurevoir to the comfortable breathing space we now have money-wise. We're both hitting 40 so it's certainly feasible to go for a big 25 year mortgage. Heart sinks a bit at the thought though, especially when the end could be in sight. If anyone has any opinions on this, I'd be very happy to have them.
• Hi MAYBIRD,
  We are in a similar situation, or will be in a couple of years time. We are moving to a 3 bed semi and have 3 kids so 2 will share and 1 will take the box room. As they are still small I dont for see any problems but when they are older I can see problems arising about lack of space etc.
  Personally, I would stay put. Kids are adaptable, I shared a small room with my sister and we've both come through it unscathed. I would rather my kids shared and maybe had a bit less space if it means I can afford to save to put them through uni. The cost of education is constantly rising and yet it SO important to be able to provide this foundation for our children.
  Whatever you decide, good luck in it.
  Al.
• I know it is not entirely risk free, but personally I prefer to invest my spare cash in a FTSE tracker ISA. Over the long term, returns average out at 11% per annum, so unless you are wanting to pay off your mortgage very quickly you would surely be better off paying the minimum amount on your mortgage and investing the rest. :confused:
• excellent,
  i'm thrilled this board has come along, right up my street, thought when i saw the debt free board that this would be natural progression. and after all, one of, if not the, best money saving ventures, is getting that mortgage down.
  after saving like mad and the odd one off lump sums for approx 2 years, and just recently starting a flexible offset mortgage, along with a nicely rising stooze pot in the offset savings a/c, i reckon i'm on for the big zero within another 2 years, all things being equall.
  i will be reading avidly, good luck all.
• Please give me some helpful advice; I have Ј4000 left to pay on my mortgage, tracker til December 06. Should I pay off in full using a maturing regular saver (with the same company, Halifax), should I just pay off the mortgage (plus dilapidation??? fees of Ј150) or leave a little debt til completion of term (nine years from original date taking out the mortgage in May 2003). A previous mortgage company suggested keeping a small amount of money in debt thus ‘no need for involving a solicitor if I need to remortgage’ or something along that line. Someone must have come accross this dilemma b4?
• keithrafferty: my parents did that - left Ј1 on their mortgage, I think so that the mortgage company would have to hold on to the deeds and whatnot (in their safe not in our attic being chewed by squirrels!).
• I think we need confirmation, but I am certain that deeds are not an issue any more because the details are all held centrally by the Land Registry
• I just discovered this forum becauase of the weekly email - thank you Martin it's just what we're looking for!
  Without going into too much detail (I'll do that on another thread) we've been watching the 2 year programme with interest, and although we think it is a poor programme information-wise (do these people pay tax/insurance on their new business ventures etc), it has given us an incentive to pay off as much as we reasonably can.
  Our fixed rate finishes next year, plus we have a separate further advance which we were going to amalgamate with a new deal. Instead, our first goal is to pay off this extra loan by January - Ј12,000 we don't have to include when re-mortgaging This is achievable without forcing ourselves. OK, we need to cut back a little but we're prepared to do that. (I have 4 months credit card payments left first - then I'm CC free. The re-mortgage will coincide with our 0% car loan finishing too, so we'll have extra disposable cash each month)
  The next year or two will be spent making overpayments so we can reduce the mortgage as much as possible. We then plan to re-locate to a (currently) much cheaper area, to a bigger house (!) and hopefully have a mortgage of Ј30k ish. This is all so we can start a family and live the good life!!!! (well, we won't have to work quite so hard as we do now)
  Will it work? Watch this space!
  Thanks Martin
• After reading this thread I have decided to have a word with hubby. I am thinking of starting small by rounding up the mortgage. It is Ј275 pm but now I am thinking of finding how much difference an extra Ј25 pm would make. I will get back and let you know later.
• We've been putting around Ј1k into a savings account each month with this in mind, hoping to use it at the end of this year when we can re-mortgage. We lived overseas for 3 years before coming back to the UK and buying a house, so it was hard to find a mortgage at all let alone pick the best deal. This time round we should be in a far better position and I'm hoping to get one that lets you make monthly repayments, rather than waiting for the opportunity to drop a lump sum on the total.
  Admittedly we don't have kids yet, but that's half the point - we do plan to have a family, but want to get ahead financially while it's still just us. What happens afterwards should be simpler to adjust to if our habits are good already.. That's the theory anyway..
• Thank you for starting this board.
  I have been overpaying 10% for the last 2 years and after less than 3 years since our 1st mortgage, we've knocked down 10 years (15 years remaining).
  My aim is be mortgage-free by 2013 and it's great to have a place where to track progress and discussed with others who have the same aim