To be mortgage free: overpayments and stuff

Tomorrow marks a month since I secured a new mortgage on my home, giving me the funds I needed to complete “project £20k” thus buying Karl out and transferring the deeds to solely my name. In total: £97,617.23 — £77,617.23 to pay off the old mortgage and £20,000 for Karl.

This week the first mortgage payment came out of my account, taking the mortgage account balance to £97,467.00

You’d be forgiven for thinking my mortgage payment was £150.23, because that’s what you get if you subtract the current balance from the original lending figure. Except it wasn’t: it was a nice round £500, which is made up of £477 actual mortgage payment due and £23 overpayment which I set up as soon as my mortgage went through (because I can afford an extra £23 but if I have to manually transfer it each month I’ll find other ways of using it!) This basically means that in a month I’ve accumulated £350 worth of interest.

THREE HUNDRED AND FIFTY POUNDS.

How am I going to be mortgage free in five years if I blink and £350 is added to my mortgage balance? Well, here’s what I’ve done so far:

  • I released the premium version of my mail form and have started working on the membership area. If I can sell 1 copy of my premium mail form a week for a whole year, that’s £939.12 which would take 4 months off the term of my mortgage and could save me £1,174 in interest.
  • I transferred some money from freelancing straight to the mortgage pot. If I can work just a few hours a month for a year I could earn around £1600 which would take 7 months off my mortgage and save me £1,985 in interest.
  • I’ve done a lot of work on Soft Play Reviews, a project I started two years ago, and if I can earn just a couple of quid a week through ads I’d save myself £131 in interest.

Combined, just these 3 things could take a year off my mortgage and save me £3,240. Even if I can’t be “mortgage free in five years”, who can balk at saving over three thousand pounds?

Other things I’ve done this month:

  • I didn’t eat out because of whole30, which saved me money.
  • I was more careful about what I was eating (again, because of whole30) and this also saved my money: the idea that whole30 has to cost a bomb is hugely erroneous.
  • Sold some old things on ebay which have been sat in the back of my wardrobe for years, and made £91.11 (minus fees) … although I imagine a big chunk of that will go on postage!

Can I keep up the momentum? Can I do even better? Only one way to find out…

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4 comments so far

  1. Katy said:
    On March 5, 2015 at 1:35 pm

    ugh, the “only paying £150 off” thing is a depressing thought that I had not really considered… (especially when I’m looking at a much larger mortgage than yours!) but I guess you have to think that as time goes by, the overall total decreases and thus so does the interest added

    Reply
  2. Carly said:
    On March 5, 2015 at 2:53 pm

    You can do it Jem!

    Just make sure you avoid all the VATMOSS rubbish if you’re selling digital downloads (forms) it came into play in January. Even membership sites are affected. It’s a nightmare for people trying to earn passive income…

    You might want to offer paid one-off installations for the form too, this might win other freelancing work also.

    I love how you detail everything out like this, you’ve influenced me a lot over the years with thinking about money, being more mindful of what I’m spending and being more mindful with things like food shopping & bills. Just wanted you to know that!

    Reply
    • Jem said:
      On March 8, 2015 at 8:12 pm

      I’m currently in denial about VATMOSS, ahem.

      I’m glad you have found it useful. I know some people think it’s incredibly boring and/or that I overshare but I like to keep track and if just one person gets something out of it that’s awesome too :)

      Reply
  3. Elice Smith said:
    On March 5, 2015 at 7:07 pm

    Hello Jem,
    First thanks for sharing useful stuff and i personally like to read all your articles. Your writing pattern is awesome. More Power.

    Reply

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