I paid off my mortgage today
Discussion
I suspect not, even though it makes sense to get the money back to lend at a more expensive rate.
Likely the bank will have hedged that interest rate and factored in the return (at time of signing the mortgage) so they would 'lose' out on some return unless the unlikely situation where they are strapped for cash and have a mortgage they want to fund...
Likely the bank will have hedged that interest rate and factored in the return (at time of signing the mortgage) so they would 'lose' out on some return unless the unlikely situation where they are strapped for cash and have a mortgage they want to fund...
Boo-urns said:
rossub said:
Dixy said:
If you are paying 2% on a fixed rate mortgage and offer to settle early will they wave the early settlement figure as they can lend it elsewhere for more.
Useful to know, thanksxerawh said:
I suspect not, even though it makes sense to get the money back to lend at a more expensive rate.
Likely the bank will have hedged that interest rate and factored in the return (at time of signing the mortgage) so they would 'lose' out on some return unless the unlikely situation where they are strapped for cash and have a mortgage they want to fund...
Is there even money to get back? I don't think they need my £ back in order to lend out to someone else.Likely the bank will have hedged that interest rate and factored in the return (at time of signing the mortgage) so they would 'lose' out on some return unless the unlikely situation where they are strapped for cash and have a mortgage they want to fund...
bmwmike said:
I've got a 1.14% mortgage (>100k) due for renewal next month and when I asked about paying it off they certainly didn't offer to let me off the hook early. YMMV, this was HSBC.
Some lenders will let you pay off the mortgage in full within the last month (always check) Barclays and Nationwide will - it doesn't really have anything to do with allowing them to lend it out for more.In 25 yrs of arranging mortgages I would say that, on the whole, lenders will not allow you out of a product even 1 day early without the penalty.
Whatdoidonext said:
FWIW it has been a couple of months now since paying ours off and it has been transformative.
Our mortgage was relatively small (1/8th my take-home) and I'd never had a sleepless night over it, but just knowing the house is ours and our biggest outgoing is the council tax ... it's a wonderful feeling.
Four years since settling mine, now I find myself more irritated by the council tax I have to pay. Our mortgage was relatively small (1/8th my take-home) and I'd never had a sleepless night over it, but just knowing the house is ours and our biggest outgoing is the council tax ... it's a wonderful feeling.
Joking apart, it's a great feeling knowing I don't owe a penny to anyone.
The council tax is out biggest monthly bill now (apart from food and drink) as we've trimmed the others and now have no mortgage to pay and have installed solar. However, even if we downsized back to a similar place to the last one I bought the CT saving isn't much and oddly much of the money that would be released would go on the various moving costs, stamp duty, then getting the new place done up and solar fitted all over again, so in short I just grin and bare it.
It’s a good feeling.
I took out my first mortgage at age 28 back in year 2000 for £50k on a £66k house. With overpayments I’d paid it off 7 yrs later. Had to decide whether to stay there and live mortgage free. I ended up selling it for £150k and moved to a nicer/bigger £280k house which meant starting another mortgage for £140k which I’m 3yrs away from paying off.
I sometimes wonder if I’d have been better off staying at my other house and having more disposable income instead of starting a new mortgage and having less money each month. But I’m pleased that I’m now in a position to one day downsize if needed and release maybe £100k to help my son buy his first house. Staying at my previous house wouldn’t have allowed me to do that.
I took out my first mortgage at age 28 back in year 2000 for £50k on a £66k house. With overpayments I’d paid it off 7 yrs later. Had to decide whether to stay there and live mortgage free. I ended up selling it for £150k and moved to a nicer/bigger £280k house which meant starting another mortgage for £140k which I’m 3yrs away from paying off.
I sometimes wonder if I’d have been better off staying at my other house and having more disposable income instead of starting a new mortgage and having less money each month. But I’m pleased that I’m now in a position to one day downsize if needed and release maybe £100k to help my son buy his first house. Staying at my previous house wouldn’t have allowed me to do that.
Edited by The Gauge on Wednesday 9th August 04:32
I paid mine off on Wednesday just under 12 years early.
I don't feel any different and the money I was (over)paying on the mortgage is now going into savings and pensions instead.
So probably no better off day to day but it feels good to look around the house knowing I own all of it and I will see that money down the line at some point rather than it going in to the back pocket of Nationwide.
Fortunate to be in this position despite the hard work and sacrifices made and others will tell me I should have not done it but I am happy with where I am at the moment.
I don't feel any different and the money I was (over)paying on the mortgage is now going into savings and pensions instead.
So probably no better off day to day but it feels good to look around the house knowing I own all of it and I will see that money down the line at some point rather than it going in to the back pocket of Nationwide.
Fortunate to be in this position despite the hard work and sacrifices made and others will tell me I should have not done it but I am happy with where I am at the moment.
Malcolm E Boo said:
I paid mine off on Wednesday just under 12 years early.
I don't feel any different and the money I was (over)paying on the mortgage is now going into savings and pensions instead.
So probably no better off day to day but it feels good to look around the house knowing I own all of it and I will see that money down the line at some point rather than it going in to the back pocket of Nationwide.
Fortunate to be in this position despite the hard work and sacrifices made and others will tell me I should have not done it but I am happy with where I am at the moment.
Congrats. It puts you in a great financial position to focus on what you need to do to retire early, if that’s something you want as an option in the future. I don't feel any different and the money I was (over)paying on the mortgage is now going into savings and pensions instead.
So probably no better off day to day but it feels good to look around the house knowing I own all of it and I will see that money down the line at some point rather than it going in to the back pocket of Nationwide.
Fortunate to be in this position despite the hard work and sacrifices made and others will tell me I should have not done it but I am happy with where I am at the moment.
Paid off ten years ago after saving / overpaying for twenty years.
Savings then diverted to short and medium term goals plus more pension contributions.
For me it's led to the nicer things in life being achievable and early retirement beckons in the next few weeks.
Ultimately looking at maintaining my standard of living into retirement with far more time available to enjoy it.
Savings then diverted to short and medium term goals plus more pension contributions.
For me it's led to the nicer things in life being achievable and early retirement beckons in the next few weeks.
Ultimately looking at maintaining my standard of living into retirement with far more time available to enjoy it.
I effectively paid mine off just before COVID, but kept it bumping along with a peppercorn rate I think they call it, just so I can get a loan easier.
When the interest rates increased, I just paid it off.
Was a massive anti climax and didn't celebrate or feel any different. I'm putting more into my pension and savings these days as one would expect.
I want to build an extension so saved for that, but now things are expensive I don't want to spend my savings or get another mortgage.
When the interest rates increased, I just paid it off.
Was a massive anti climax and didn't celebrate or feel any different. I'm putting more into my pension and savings these days as one would expect.
I want to build an extension so saved for that, but now things are expensive I don't want to spend my savings or get another mortgage.
Malcolm E Boo said:
Phil. said:
Congrats. It puts you in a great financial position to focus on what you need to do to retire early, if that’s something you want as an option in the future.
While not front and centre of my mind retiring earlier or reducing working hours is a big consideration.I've elected for the opposite plan and am loading up the pension to the max while my overpayments are at the min £50pm.
Mostly because I can't see past the maths choice of paying £1 off the mortgage or getting £2.845 in my pension pot (60% tax plus employer NI saving) plus compound growth.
I've elected for the pension payment which means I am not really overpaying the mortgage any more....... Hopefully this turns out to be the right long term play....
Yes, we’ve prioritised investments and what we can (tapering) into pensions. Barely touched our current mortgage, which I regret having as repayment as on our rate it would be about £1k a month on interest only! Can’t see the sense in lumping into something that’s costing relatively little when a balanced investment portfolio should be beating it fairly easily.
Going to probably continue that plan with a large loan for a larger house and possibly just have it on interest only while investing everything instead.
Going to probably continue that plan with a large loan for a larger house and possibly just have it on interest only while investing everything instead.
We bought in December 1999 and by overpaying like crazy and a couple of strokes of blind luck I made the final payment on the 16th December 2005 at age 48. I still have the cork from the bottle of vintage Pol Roger with the date written on it.
It seemed the right thing to do even though frankly I prefer a good dry Cava generally.
Financially it would probably have been sensible to have kept a small mortgage going but I couldn't resist the idea of being 100% debt free.
To answer the OPs original question, yeah; it felt great. And you know what? It still does.
The house is now worth around four times what we paid and now we're retired I'm starting to investigate whether equity release is a viable option, but consensus so far is that most schemes are in ripoff territory.
The other option is selling up and downsizing to a bungalow for cash, which is looking more attractive now that Mrs 404 is increasingly mobility-challenged.
It seemed the right thing to do even though frankly I prefer a good dry Cava generally.
Financially it would probably have been sensible to have kept a small mortgage going but I couldn't resist the idea of being 100% debt free.
To answer the OPs original question, yeah; it felt great. And you know what? It still does.
The house is now worth around four times what we paid and now we're retired I'm starting to investigate whether equity release is a viable option, but consensus so far is that most schemes are in ripoff territory.
The other option is selling up and downsizing to a bungalow for cash, which is looking more attractive now that Mrs 404 is increasingly mobility-challenged.
From someone who paid off his mortgage nearly 30 years ago and never regretted it, don't just save the money you are not paying each month and don't put it all in pensions. I did and now have more than I can possibly spend but wish I had enjoyed spending a bit more of it over the last 30 years.
Dixy said:
From someone who paid off his mortgage nearly 30 years ago and never regretted it, don't just save the money you are not paying each month and don't put it all in pensions. I did and now have more than I can possibly spend but wish I had enjoyed spending a bit more of it over the last 30 years.
Well that comes down to the person in question. I’m sure I could decimate the average UK pension pot with a couple of purchases 
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