Hi, I’m Sarah (a Financielle OG) and I’m writing this for everyone who has a mortgage, is about to have a mortgage, who is thinking about getting a mortgage…

I have had mortgages since the age of 25, on various properties, from my first flat to the house I now own with my husband.  It never occurred to me to overpay on my mortgage until the age of 46, when my husband and I moved from England to Scotland and started all over again! 🙄

We took on a mortgage over 20 years…it was then that I realised I did not want to still be paying a mortgage at the age of 66, after all want to retire at 60 (and still do)!

Now, I am the money geek in our relationship 🤓 and my husband loves that I get so excited about overpaying our mortgage.  I regularly do calculations around what if we paid £x more each month…how much time would it cut off our mortgage term? and can we stretch ourselves to pay more without stopping ourselves from enjoying life now?

We moved from England to Scotland in July 2021 and after being in rented military accommodation for only 6 weeks we had found a home we wanted to buy and moved in by September 2021.  We did the usual thing and went for a 2 year fixed rate mortgage as it’s pretty standard and you never know what might happen in the future.  We started to make overpayments each month of a couple of hundred pounds as we wouldn’t miss the money if we paid it from the beginning, right?

Then came the war in Ukraine and everything it brought with it and mortgage interest rates started to creep up and up.  I emailed our mortgage broker on 17 April 2022 asking what it would cost to come out of our 2 year fix early and what rates we could get right now as I had seen a 10 year fix for 2.35% with our current lender (we were currently paying 1.49%).  Our mortgage advisor assured us that rates probably wouldn’t increase much more and maybe see what things are doing in a few months time.  21 June came round and I was now getting really anxious about the future of mortgage interest rates, so I emailed our mortgage broker again asking for her advice.  The response I got was ‘you will be ok until the rates get to around 5.50% as you are overpaying now and it would only cost the same amount for an increased rate of 5.50%.  Now I had to think for a moment but then the penny dropped…WE WOULD NOT BE OK paying 5.50% as this would mean everything we overpay right now would be going to a normal monthly payment!!! This was not ok with me (nor my husband when I told him).  Thinking about it now I can’t believe our mortgage broker said this to me.

After crunching the numbers and factoring in our early redemption charge my husband and I decided to opt for a 10 year fix with our current provider at an interest rate of 2.42%.  As we were staying with our current provider all we had to do was pay the early redemption charge and they would do the rest (no credit checks needed).

Yes it cost over £2,000 for the early redemption fee but the peace of mind it gave us (me) was priceless!

So after all of that…normal service would resume and we could continue to overpay our mortgage as we were before (and we have been doing this still each month).  Yes we had to pay a little extra to account for the increase from 1.49% to 2.42% but I saw it as a small price to pay knowing we would be fine for the next 10 years…that is until Sarah got another bee in her bonnet! 🐝👒

The 10 year fix ends in August 2032…this got me thinking 🤔

Could we have the whole mortgage paid off in this time???  So out came the mortgage calculator again and I played with different scenarios and monthly overpayments and came to the conclusion that we could!

Skip forward to January 2023 when I decided to save every extra penny that came my way for a year to see how much I could save from bank interest, cashback, bank switching rewards, surveys on Prolific, any spare cash from my monthly budget categories and walking apps that pay you to walk your dog…you name it and I saved it!  I even made myself a spreadsheet to document where all of the extra pennies came from and how it all added up.

I was flabbergasted to find that on 31 December 2023 I had managed to save a grand total of…wait for it…drumroll please 🥁

£7,079.09

I only wish I could say I immediately paid this off our mortgage on 1 January 2024, but I didn’t!

You see, we are also in the middle of renovating our home, which was built in 1901.  After we finished renovating an old downstairs bedroom that wasn’t being used, into a new living room with log burner in August 2023 we decided that we would change the ‘old’ open plan living room/dining room into a new kitchen dining room and would save for maybe another year to be able to afford this.  Skip to December 2023 when we decided to bring that date forward to 2024 (and we had no money saved for it)! 😱

Stay with me…my thinking then was to put the money I had saved for the mortgage overpayments towards the new kitchen/dining room (along with continuing to save some more money) as this would be a good headstart for us.  I would then make higher monthly overpayments towards our mortgage from January 2024 (really to stop us from spending the money elsewhere again).  So this is exactly where we are at now…

We are making double payments each month (we are allowed to pay up to 3 times our monthly payment without it affecting our normal monthly payments).  I am also still saving other money that comes my way but not to the extent of 2023 as we are also saving towards a holiday to Rome in 2025 for my husband’s 50th Birthday, my step daughters 21st Birthday and my 50th Birthday! 🥳

But it doesn’t stop there 🙄

My husband is in the Military and retires after 20 years at the age of 55 (so by my reckoning this will be September 2030)…he then springs on me that he would like our mortgage paid off by the time HE retires from the military which means that I just lost 2 whole years from the calculations I had been working towards!

So once again, out came the mortgage calculator and lots of different calculations were done.  Bearing in mind that we cannot physically pay off our mortgage before the 10 year fix is up due to an early redemption charge, I am now thinking about paying what we are paying right now (double payments) and saving any extra we have to allow us to drip feed what is left from when my husband retires in 2030 to the end of the fixed rate in 2032.

This would make us ‘technically’ mortgage free from September 2030 🥳

The extra I am currently saving is going in a high interest savings account to then ‘drip feed’ from 2030.

It is so exciting and exhausting at the same time to think we could be mortgage free in 6 years…but that’s why it’s called a journey, right?!

Appendix:

I am using the monthly interest from my Barclays Rainy Day Savings Account to pay off our Barclays mortgage! 🤭 So I can basically say that Barclays are paying us to live in our house and pay their own mortgage! 😂

Vouchers received from dog walking apps – taking Daniel the Spaniel for walks while earning money, then exchanging for Tesco vouchers and then moving that amount of money from my supermarket budget to my mortgage savings.

Airtime Rewards – I figure I’m paying my phone bill each month anyway so when I hit £10 I take this from my ‘bills’ budget and save this towards the mortgage as well.

Amazon Shopper Panel – saving £7/£7.50 each month and transferring that money to my mortgage savings account as we are always buying something from Amazon…who isn’t?! 🤷

You name it I’m doing it!

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