Mortgage balance - $348,000
Years Left - 29
Interest Rate - 4% at the moment, variable.
Offset, unlimited free redraws.
Monthly Payment - $1735
Spare Cash now when we scrimp and save - $2300 a month
Spare Cash from June 2018 with car paid off - $3100 a month
Lump sum of $8000 will be added in April from caravan sale.
Superannuation balance at retirement, at current rate with no additional contributions - $444,000
DH will be 60 in 2031.
Aim is to FIRE in 2031 if possible.
The scenarios I have run are -
Pay off mortgage at fastest rate, end date will be 28/8/2024.
After mortgage paid off -
Put $1100 a month towards renovations for remaining 6 years (50's home, only one new bathroom, rest is over 30 years old)
And invest $4000 a month. At for example 5.6% by his 60th we will have over $400,000 and a paid off renovated house.
Super + Investment = $844,000
Pay off mortgage at such a rate that end date is DH 60th birthday, 11/2031. ($800 extra payments a month from June 2018)
Put $1100 a month towards renovations (using mortgage offset to save up in the meantime)
And invest $1200 a month till renovations are done (6.5 years at maximum, less for DIY), then up to $2300 a month for 7.5 years.
At 5.6% we will have $500,000 and a paid off renovated house.
Super + Investment = $944,000
Other scenario not run is to up super contributions, with both of the above scenarios. I don't think the renovations will cost what I've put in here, which is about $90,000. We have to do an ensuite and WIR or built ins, all internal except new bathroom and hallway is asbestos so remove all that and gypock and paint. Small extension under main roof to extend living, this will be new kitchen. Plus sand and polish the original hardwood floors throughout which are in a shocking condition. I'm happy to do the renovation bit by bit, rather than paying a building to come in.
While it seems cut and dried that scenario 2 nets us $100,000 more, there is a security to having the house paid off. Not that I want to wait 7 years to not have my kitchen bench start smoking when I use the stove top....
I'd love to know opinions of other Aussies on here as to what you'd recommend we do, and also what you yourselves have done.