The eagle eyed among you may have noticed that I've changed my progress bars a little and added one for our mortgage payoff.
A bit of background;
2007
Our long term goal has always been to pay off our mortgage early and in 2007 I even started a blog for it. We had grand illusions of working flat out for five years, making over payments and then moving abroad. But I couldn't do it; hubby was fine, but not me. Perhaps if I'd been 15 years younger and not working 60+ hours a week I would have been able to stick it out, but as it was, I couldn't keep going.
2009
In 2009 we had to halt over payments to boost our emergency fund as we lost our job security once the recession really kicked in. It was during this time that we really simplified our lives, de-cluttered and sold a lot of stuff, cleared my consumer debt and learned how to live on one income. It was this year that really prepared us for the future.
2011
We're still moving abroad in 2012, we just won't be {anywhere near!} mortgage free by then. There are so many variations on what can happen in the next couple of years that it's hard to make plans, and for now we're concentrating on boosting our cash savings, but our target date for mortgage, and total debt, freedom remains the 31st December 2020.
Mortgage stats:
£138,485 - Original mortgage April 2006 - March 2031
25 years/300 months - Original term of mortgage
£114,838 - balance 1st January 2011
234 - actual payments left
£23,647 - paid off to date
8 months - term of mortgage reduced by
119 months - time to goal date 31/12/20
We're 17% of the way to reaching goal.
If you have a mortgage are you considering paying it off early?
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I would love to pay off my mortgage 10 years early. That has always been my dream. I have not been able to make as much progress towards this as I would like, though - mainly due to some medical bills I encountered this year, cost of living going up, etc. Plus, this recession has scared me enough that right now I sort of want to focus on beefing up my long-term emergency fund for awhile.
ReplyDeleteI wish you the best of luck in your goals. I think you will do great!
We've got a really bad mortgage at the moment - partly as a result of getting it during the credit crunch (mid-2009), partly since we're both self-employed but mostly because we went with the worst mortgage broker in the world (who has since, rightfully, gone out of business).
ReplyDeleteAnyway, we're stuck with that for another eight months then we'll hopefully be able to find something better - and we're going to pay a hefty amount off it then. We're going to divide our savings into three chunks: some instant access, some better paying fixed-term things, and the rest to paying off the mortgage.
As well as that lump sum, the monthly payments on a mortgage with a better interest rate should be cheaper - but we're going to keep paying about what we're paying now to gradually overpay without really noticing the difference to our monthly outgoings. I've worked out that we should be able to pay off our mortgage in 15 rather than 25 years, saving about £40,000 in interest!
Louisa: It's unbelievable how much interest it saves paying off your mortgages early!!
ReplyDeleteWhat a nightmare you seem to have had with your broker..we used {MSE recommended} London {and} Country brokers and they were great for us; worth trying as they don't charge!
15 years instead of 25 is still great, it's about the same as us :)
I have a small mortgage on my house in PEI, around $45,000Cdn. The payment is $118 bi-monthly. I recently upped the amount to $125 bi-monthly and just by paying $14 extra per month I've knocked THREE years off the amortization. Crazy eh?
ReplyDeleteAs a house is probably the biggest debt you will ever have, makes sense to pay it off early, good luck with your goals.
ReplyDeleteas soon as I can get rid of my consumer debt & my second mortgage on the house, you bet I will be working to get rid of the Mortgage! If I can get it paid off before DD goes to college (a dream of mine that I would love to have come true) that would be $1k that I could pay for tuition per month!!!
ReplyDeleteWe are further down the road than you and could pay off the mortgage remainder, but with a low SVR choose not to at the moment. Despite inflation, there is a lot to be said for cash reserves: they are safe, predictable and readily available.
ReplyDeleteYour only remaining debt is secured on property which, while it might fall in value monetarily over the next couple of years, will always be of substantial worth (one house) and is, presumably, integral to the Portugal plan.
Consequently, I think the dual track approach of building up savings and reducing the mortgage at an accelerated, but moderate, rate is the best. Having cash protects your longer term plans against unexpected events.
Salis: agree with all your points.
ReplyDeleteTo a certain extent our wanting to be mortgage free is more emotional than financial, however rental income from our house is, as you say, integral to our move abroad.
Hubby hopes/wants to be working for another 20 years, he's only 31 ;), so we still have a few options.