Part 308: Mortgages and Personal Contracts

Hello and welcome back to Mortgage Advisor on FIRE.  This week, I discuss interest-only mortgages, personal contracts, and more…

Weekly Update

I had the first few days of the week off work as part of an extended birthday weekend.  We went for brunch on Monday morning, and I had my favourite breakfast dish of pancakes, crispy bacon, blueberries, and plenty of maple syrup.  I leave my diabetes at the door when I go for this meal.

Anyway, the brunch on Monday was arranged at short notice as our original plan was to go to Bakewell for the day and have a nice walk and some lunch.  However, the weather forecast was for heavy rain.  In the end, the rain didn’t fully materialise, and we could have gone to Bakewell.  Hindsight is great, isn’t it?

On the subject of diabetes, I’ve had to throw in the towel with my step challenge for Diabetes UK.  A couple of weeks back, I mentioned that I’d had a painful incident with my right hip.  Well, it’s been getting worse over the last few days to the point where walking just a short distance is painful.  Rather than make the injury worse, I’ve decided to call it a day.  I’m gutted as I was so close to hitting the target, but I really don’t want to risk a long-term injury.

Mortgage

Halifax have now sorted our mortgage, at last.  Just over half the mortgage is now on interest only, and we’ve exited the colleague concessionary scheme that I had to leave by December.  These changes will drop our mortgage payment by approximately £150pm, and later this year, when I get my pension statement, we will be able to put the rest of the mortgage on interest only.  Overall, this will leave us with a payment approximately £300 lower than before we switched to interest only.

Interest-only is often misunderstood, with some people believing it to be a huge risk.  This is not the case, assuming you are disciplined with your money and are able to invest long-term.  

The Case for Interest-Only

On an interest-only mortgage, you are only paying the interest each month, and the debt is not being reduced.  However, over the term of the mortgage, inflation will eat away at the value of the debt.  If you have £100k on interest only now, it will not have the same real-world worth as £100k in twenty years due to inflation. 

Inflation will not pay the debt off entirely, though.  The money still needs to be repaid at the end of the mortgage term, and this is where investing enters the story.  

The mortgage rate we now have is 4.24%.  On average, you would expect at least a 6% rate of growth from a stocks and shares ISA.  So, let’s look at how this may play out for our mortgage.  First, a couple of points to note; for these calculations, I’m going to assume the same rate of interest for the term of the mortgage.  In the real world, rates change every few years, but that would be the same whether I was on repayment or interest only.  Also, the calculations assume smooth rates of growth, rather than the ups and downs experienced in real life.  Over a long enough term, these things tend to balance out.

On Repayment

Mortgage Balance: £176,156.78

Term: 25 years

Monthly Payment: £953

Estimated Total Amount Payable: £285,901

Amount Invested Monthly: £0.00

End Value of Investments: £0.00

On Interest Only

Mortgage Balance: £176,156.78

Term: 25 years

Monthly Payment: £622

Estimated Total Amount Payable: £362,739

Amount Invested Monthly: £331

End Value of Investments: £229,381

With the examples above, you are spending £953 a month in each scenario.  Interest only results in you paying much more interest over the course of the mortgage, approximately £80k extra.  However, you also end up with almost a quarter of a million in your investments that you didn’t have in the repayment scenario.  

If you are disciplined and you put some thought into it, interest-only can be a fantastic option.  The problem is that some people will use interest only purely because the monthly payment is cheaper, and the money “saved” is then used to buy stuff, rather than being invested.  There’s no point saving £300pm if you are just going to use that on alcohol or a more expensive car.

The Emotional Consideration

One thing that the above does not consider is the emotional factor.  If you own your home with no debt secured against it, you have a home regardless of your financial position.  You have safety, shelter, and that counts for a lot, especially if you have children.  With interest only, you have debt secured against the property, and if you fail to service that debt, you could ultimately lose your home. That’s the biggest risk, and that’s the part that will put some people off this approach.

Plumbers… again…

After being let down by multiple plumbers, we got in touch with our apartment’s management company to ask if they had anyone they could recommend.  They did.  The guy came out and looked at the job.  He was going on about how he had access to the building and had done loads of work here, and that he wouldn’t let us down like previous people had done.  Well, he has.  We’ve spoken with him a couple of times on the phone after he came out, and he kept saying he would send us a quote the following day, but he hasn’t.  

In the end, we’ve found someone who has said they’ll do the job this week, as we’ve communicated via email re: measurements and whatnot.  The whole thing has been ridiculous, though.  We’re not asking for anything unusual: a new flush for the en-suite toilet, and a new sink and tap in the kitchen. Hopefully, this work will actually go ahead.

Octopus

After months of back and forth, they’ve finally installed a new smart meter, which seems to be working ok.  I don’t understand why it’s taken almost half a year to get to this point, but at least this is sorted now.

More Customer Service Issues

It sometimes feels like we must be the problem with the number of issues we have dealing with different companies, but we really don’t do or expect anything unusual.  Case in point: Asda.  

For the last few years, we have done our internet food shopping through Tesco.  However, they’ve stopped offering the 6x2L multipacks of water for delivery.  You can still get them in-store, but not for delivery.  We don’t drive, so this is a pain.  I called Tesco to ask about it.  They said they’d pass the feedback along, even though I had simply asked a question.  They said I wouldn’t hear anything back, even though I hadn’t asked for any reply except for my single question.  All I wanted to know was whether this water would be available for online delivery again.  

Not Got The Bottle

We thought we’d try Asda, as Sainsbury’s refuse to bring deliveries up to our actual apartment, and Waitrose are expensive.  So, we put an order through for 6 packs of 6x2L bottles of water.  In total, 36 2L bottles.  We got through the confirmation of what they had picked for delivery.  The water was not available.  Instead, they would send 12 packs of 12 bottles of 500ml, so 144 bottles in total.

Overall, the amount of water is the same; it’s just awkward having so many small bottles.  

I ask, dear reader, what do you think went wrong?

Asda did not send 12 packs of 12 bottles.  They sent 2 packs of 12, 500ml, bottles.  The driver checked the order, and we checked our receipt, and yes, it should have been 12 packs they sent as a substitute.

It really does feel as though no one can do anything correctly anymore.

Another example from Saturday.  Oana and I went to an open day at Cutler’s Hall in Sheffield.  The information we received stated that tours would start at 10:30am.  Nope, it was 11:00am.  The guy at the main doors said the information was sent out incorrectly.  

Later that day, we wanted to visit an art space in the city.  On the website, it said it was open on that day between 11:00 and 14:00.  We got there and it was closed, with a sign stating to check the website: the same website that said it was open.

In the grand scheme of things, it’s all pretty minor stuff, but you can’t help but feel like everything is becoming less reliable.

On Yer Bike

I’ve bought a bike, meaning Oana and I will be able to take more rides together.  I’ll need to wait for my injury to heal up, but I’m looking forward to trying it out.  The thing about Sheffield is that there are hills everywhere.  It doesn’t matter which direction you go; there’s a hill.  You get to the top of a hill, and there’s another hill.  It’s hills all the way.  

Belated Birthday Meal

One of my favourite meals that Oana makes is stuffed peppers.  It’s based on an old family recipe, and it’s been years since we made it.  With all sorts of meals already planned for my birthday, we couldn’t make the peppers until this week.  

It’s one of those meals that you can’t make look pretty on the plate, but it tastes amazing.  It’s such a simple meal, but it’s hearty and filling.  We’ll be making it again soon, as we both have a craving for them now.

Cutler’s hall

On Saturday morning, we visited Cutler’s Hall for an open day where we could have a free guided tour.  The space is incredible and full of history.  Some of the fixtures and fittings were salvaged from the Olympic, sister ship of the Titanic, and some of the first stainless steel ever produced is located here.  

Birthday gifts and cards from Oana

I realised that I forgot to post pics of the birthday card Oana made for me.  Over the years, she has made me some fantastic cards, and I’ve kept all of them. 

I love having these memories, and I love Oana for making them.

Lego

With my walking challenge, work, and general life stuff, we’ve not had much chance to build Lego.  This hasn’t stopped us from buying Lego, though.  We now have several sets to build, including; the Millennium Falcon, Italian Riviera, Beauty and the Beast castle, Arkham Asylum, and several smaller sets.  This should be enough to keep us occupied for a couple of days.

What I’m Doing

Listening: The Long Way to a Small, Angry Planet  by Becky Chambers.

Watching: Better Call Saul (Netflix).

Reading: nothing at the moment.

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Financial Update

Assets

Premium Bonds: £21,000.00.

Stocks and Shares ISA: £119,375.24.

Fuck It Fund: £0.00.

Pensions: £103,128.09.

Residential Property Value: £239,368.00. 

Total Assets: £482,871.33.

Debts

Residential Mortgage: £176,156.78. 

Total Debts: £176,156.78.

Total Wealth: £306,714.55.

Sometimes I have to remind myself that the figures I deal with aren’t typical for most people. It’s not about showing off; it’s just that we all get used to our own situations, and it can be easy to forget that our reality isn’t the same as everyone else’s.

The average person in the UK has roughly £15k in savings, depending on which sources you refer to.  In my FI journey, I’ve done most of the heavy lifting already, and it’s a case of letting compound growth do its thing.

Even if I don’t invest another penny, in 25 years (assuming 6% growth) the total value of my pensions, ISA, and Premium Bonds would exceed £1,000,000.  Investing £1,000pm brings that million-pound value forward by eight years.  The future is looking good.

The Personal Contract

I’ve been thinking a lot recently about discipline. Not the sort of rigid, joyless discipline that makes you miserable, but the kind that helps you steer your life in the direction you actually want it to go. It’s very easy, almost frighteningly easy, to let days slip away in a haze of scrolling, streaming, or doing “just one more thing” before bed. We’ve all been there, when an hour on social media turns into three, or you put on a TV series and suddenly it’s 1am and Netflix is asking if you’re still alive.  There are also times when you can’t sleep and you ask google, “What is a pineapple?” Maybe that last one was just me. 

We all need downtime, and I’ll never begrudge anyone a good box set binge or an aimless YouTube rabbit hole. The problem comes when it’s not the exception but the rule; when the default setting for evenings or weekends becomes passive consumption. At that point, you’re not really choosing your downtime; you’re just drifting into it.  Some shows and films will enrich your life, but then there’s the pointless stuff that is just there as background noise whilst you go through another Bored Panda list.

All this has led me to the idea of a personal contract.

What’s a Personal Contract?

A personal contract is exactly what it sounds like: a written set of commitments you make to yourself. Nothing legally binding, no dramatic penalties if you fall short; just a way of putting down in black and white what you’re aiming for, so you can hold yourself accountable.

The goal isn’t perfection. It’s not about swearing off Netflix forever, giving up all “bad” food, or turning yourself into some robotic productivity machine. It’s about nudging the balance in your favour. Small behaviours, done consistently, compound into something bigger.  

That word “compound” is deliberate. Just like money compounds when you invest it wisely, your habits compound too. That’s why the personal contract links so well with FIRE, as the same patience, consistency, and long-term mindset that grows your ISA or pension can also build better health, stronger routines, and a richer life overall.

Why Now?

Partly it’s because of my hip injury. I’ve had to stop my step challenge for Diabetes UK, which was gutting because I was so close to the target.  I didn’t prepare for this challenge.  Instead, I jumped straight into it.

The main driver for this is how I’ve noticed how much time can vanish without me even noticing. I can tell you the exact value of my ISA to the penny, but I sometimes struggle to account for where my evenings went. I don’t want to look back in 10 or 20 years and think, “Well, at least I watched everything Netflix had to offer” or “I really hammered Candy Crush.”

It’s not just me who feels like time is speeding up, or that the amount of free time we have is reducing.  I’ve had similar conversations with a few people about how life just feels rushed, with not enough time to commit to anything.

Drafting the Contract

So what goes into a personal contract? Here’s a working version of mine. It’s not exhaustive, and it’ll evolve, but it’s a start.

1. Movement

Daily Minimum: 20 minutes of walking, stretching, cycling, or resistance training.

Weekly Goal: Two longer sessions of activity, whether that’s a proper walk, a bike ride with Oana, or a longer gym visit.  

Why? Because the body doesn’t care if you’re too busy or tired. It adapts to what you do consistently. I don’t need to be an athlete, but I do need to avoid becoming immobile in my 50s or 60s.

2. Diet

Whole Food Focus: At least one meal per day should be home-cooked and based around whole foods.  Breakfast is always going to be something a bit more processed, like bread, teacakes, cereal, and so on.  Lunch is generally a bit healthier and made from scratch.  Dinner is the meal where things can often go off the rails.  You have good intentions, but then follow dinner with one, or three, bags of crisps.  

Treats with Intention: Pancakes with bacon and maple syrup? Absolutely. But make it a conscious indulgence, not a daily default.  Treats should be treats, and not a daily thing.

I mean, food is a tricky one. I’m not about to turn into a saint, and I don’t believe in labelling things “good” or “bad” because even treats have their place in a balanced diet. But left unchecked, my sweet tooth and love of heavy comfort food can undo a lot of other progress.

3. Digital Use

Screen Boundaries: I’m not really sure how to quantify this because so much of daily life revolves around screens.  In my job, I have a minimum of two screens open at any one time.  Then, for communication with friends and family, there’s my iPhone screen.  For mindless relaxation, there’s the TV.  

Default to Creation: If I’ve got spare time, the first option should be reading, writing, Lego, or spending time with Oana and Poppy.  I can still use screens for creative endeavours, but just doomscrolling is not productive in any way.  I can read a few articles and come away having instantly forgotten what I was reading.  It’s just disposable distraction.  

I’ve noticed how different I feel after an evening of creating versus consuming. One leaves me energised; the other leaves me flat.

4. Mindset & Reflection

Weekly Check-In: Once a week, review how I’ve done against the contract. No guilt trips, just a look at what worked and what didn’t.  There’s no point lying to myself.

Gratitude Practice: Write down three good things each week, big or small. It’s too easy to get bogged down in plumbers who don’t turn up or supermarkets that can’t deliver the right water bottles.  If you focus only on the negative, that’s the reality you will create.

Linking Back to FIRE

On the surface, FIRE is about money. But scratch beneath that, and it’s really about intentional living. It’s about asking, “What do I want my life to look like?” and then making consistent choices to get there.

The personal contract is just another version of that. Instead of money, the currency is time, energy, and health. You’re still making trade-offs, still balancing short-term comfort against long-term benefit.

For example:

Mortgage Choice: Interest-only mortgages give you more flexibility, but only if you’re disciplined about investing the difference. The risk is frittering it away.

Lifestyle Choice: Binge-watching and doomscrolling give you easy short-term comfort, but only if you’re disciplined about limiting them. The risk is frittering away your most precious asset: time.

Both situations demand the same thing: awareness, discipline, and a long-term view.

Emotional Safety Nets

Another connection between the personal contract and FIRE is the idea of emotional safety nets.

With a repayment mortgage, you know the debt is shrinking each month, and eventually you’ll own your home outright. That provides peace of mind. With interest-only, you need to build your own safety net in the form of investments.

With habits, it’s the same. If I stick to my personal contract most of the time, I’m building a safety net against future health problems, wasted time, or regret. It doesn’t guarantee anything, just like investments don’t guarantee returns, but it massively improves the odds.

What If You Break the Contract?

This isn’t about perfection. Life gets in the way. There will be weeks when my hip hurts too much to walk, or when Oana and I decide that watching Better Call Saul back-to-back is the only sensible option.

The point isn’t to beat myself up. The point is to notice when the exceptions start becoming the rule. That’s when the personal contract serves as a gentle reminder of what I said mattered most.

An Invitation

I’m sharing this not because I think everyone should copy my contract word for word, but because I think everyone can benefit from having their own version.

What commitments would you put in yours? Maybe it’s cutting back on takeaways, finally starting that hobby you keep talking about, or setting a bedtime that means you don’t stumble through the next day half-asleep.  

Think of it like your own repayment plan for life. The small instalments add up. The compound growth kicks in. And before you know it, you’re further ahead than you thought possible.

Sometimes it’s easy to forget that discipline isn’t about restriction. It’s about freedom. By putting some boundaries in place, you stop drifting and start steering. You stop spending your life by accident and start living it on purpose.

That’s true for money. That’s true for health. And it’s definitely true for time.

So maybe it’s time we all drew up a little personal contract. Not to make life harder, but to make it richer.

DISCLAIMER

The views and opinions in this blog are my own, and do not represent the views or opinions of my former, current, or future employers, nor should they be considered advice.

If you want personalised financial advice, seek an appropriate professional.  If you are in financial difficulty, seek advice via the resources below:

StepChange

MoneyHelper

Biolink 

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