This is a guest blog by Emma Button of Mellow Mummy who, in 2013 challenged herself to pay off the mortgage early by making small savings – find out how she got on.
Operation Pay-Off-The-Mortgage started 12 months ago during a post-Christmas ebay frenzy. Our mortgage debt is bigger than my brain can possibly comprehend and we have another 22 years of payments ahead of us. We manage to meet our mortgage obligations each month (even if maternity leave was a bit of a struggle) but the massive debt feels like a great weight hanging over us. So last year I resolved to start chipping away at the debt.
I promised myself that every time I came into any money that I had not expected or budgeted for, however small, I would pay it onto our mortgage as an overpayment. We are lucky that our mortgage allows us to make additional payments however small or large so I could transfer the money electronically whenever we had a few unexpected pounds.
In January 2013 I set to clearing out our ‘spare’ room. The room had become a junk room with boxes that hadn’t even been opened in the 2 years we had lived in the house. I sorted – dustbin, charity bag, for sale or (very rarely) keep. Everything worthy of sale was listed on eBay, Facebook selling pages, Gumtree and local supermarket advertising boards for sale. Some items brought in tens of pounds, others a measly one pound but every single penny was paid straight onto the mortgage.
When summer came I decided to find a few more pennies by clearing out our old DVDs, books and games by selling them on Amazon marketplace or trading them in for Amazon vouchers that I could save up for Christmas. Once again, every 50p here and there added up.
I took the opportunity to clear out LOADs of the old baby clothes and toddler clothes that still had plenty life left in them and I took them to a local NCT sale with a few toys that the girls had grown out of. Even after a 30% commission I came away with over £100. Mr. B. even gave me permission to sort his clothes too and our unwanted garments were sold on local facebook groups.
As we approached the end of 2013 both myself and my husband were offered small gifts from family members that we paid directly to the mortgage and an unexpected company share dividend was also a pleasant festive surprise.
Last week I totted up all of the additional payments we had made to our mortgage in 2013. It came to £1244. OK, so it isn’t a massive slice off the mortgage but at present, given the effects of compound interest we think it could be worth at least twice that in the long run and our calculations show that we are now about 15 months ahead of where we would have been without our overpayments so far.
I am planning on carrying on our good work in 2014 and I’ve already started clearing our loft in preparation for the next free listing days on eBay!
I think this is a fantastic way of dealing with the mortgage hanging over their heads – Emma and her OH have really taken steps towards getting it right down and I wish them every success in 2014!