I paid off my mortgage today
Discussion
Tim Cognito said:
Yep, we're split pretty evenly between overpayments, pension and s&s isa.
I can feel the psychological draw of smashing down the mortgage but financially it rarely makes sense.
Indeed but you can’t really put a price on the peace of mind being mortgage free can bring - and is different for everyone in any case. I can feel the psychological draw of smashing down the mortgage but financially it rarely makes sense.
I would have been financially better off if I’d invested rather than paid down the mortgage but I’m old enough to remember the fun and games in the late 80s/early 90s and just wanted shot of the thing…
The theory being that you could clear the mortgage with your investments if push came to shove. Of course unless you’re young and you are putting most of it into a pension.
Right now I have approaching 75% of my mortgage debt in ISA and general investment accounts/cash - it’s not locked away. But appreciate most people don’t have that luxury as their pensions will suck any spare they’d have.
Right now I have approaching 75% of my mortgage debt in ISA and general investment accounts/cash - it’s not locked away. But appreciate most people don’t have that luxury as their pensions will suck any spare they’d have.
funinhounslow said:
Indeed but you can’t really put a price on the peace of mind being mortgage free can bring - and is different for everyone in any case.
I would have been financially better off if I’d invested rather than paid down the mortgage but I’m old enough to remember the fun and games in the late 80s/early 90s and just wanted shot of the thing…
That was my thought. Get the thing paid off and then invest/save/pension pot going forward. Maybe I would be financially better off but psychologically worse off. I have many more financial options available to me than this time last week to maybe catch up on the few thousand I may have missed out on by going the route I did.I would have been financially better off if I’d invested rather than paid down the mortgage but I’m old enough to remember the fun and games in the late 80s/early 90s and just wanted shot of the thing…
If all else fails I still have the value of the house to fall back on should I wish.
RSTurboPaul said:
What happens if there's a massive global financial crash and both houses and investments (that you were planning to use to pay off a mortgage) plummet?
I struggle to muster confidence in our esteemed leaders and their handing of the financial situation over the longer term... lol
It’s a valid point. But does highlight the need to take a long term view I guess so you’re not forced into something during such an event (Covid?) - things can recover fairly quickly (or very slowly!). I struggle to muster confidence in our esteemed leaders and their handing of the financial situation over the longer term... lol
I suspect my wife will demand that we pay some of the mortgage debt down as well as piling into investments.
Edited by okgo on Saturday 4th May 17:42
RSTurboPaul said:
What happens if there's a massive global financial crash and both houses and investments (that you were planning to use to pay off a mortgage) plummet?
I struggle to muster confidence in our esteemed leaders and their handing of the financial situation over the longer term... lol
It’s similar to the Endowment mortgages back in the day. I’m sure it’s worked for a lot of people since the crash, but it’s not something I’d risk.I struggle to muster confidence in our esteemed leaders and their handing of the financial situation over the longer term... lol
I’m happy getting 5% + risk free on savings for now while I save up to pay it off.
My mortgage could be paid off in 3yrs time when I retire, which I look forward to, however keeping a small amount going might mean I could remortgage in the future for 'house improvements' and thereby get access to a chunk of cash should I need it for helping my son with house deposit etc.
I chop and change my mind all the time about overpaying.
I have £160,000 left (I’m 39) and I paid in £15,000 last summer as my S&S isa wasn’t performing. Immediately regretted it as the money is ‘gone’.
I can’t decide whether to move and take on more debt, or really increase the payments and pay it off.
I read a lot about folk paying it off and then invest. However not overpaying and investing earlier to benefit from compound interest over a longer period also appeals.
In the short term I over pay by £100 a month and put £1,000 in a S&S isa it’s a topic that I think about quite a lot. Wife thinks I’m nuts and just live and let live.
I have £160,000 left (I’m 39) and I paid in £15,000 last summer as my S&S isa wasn’t performing. Immediately regretted it as the money is ‘gone’.
I can’t decide whether to move and take on more debt, or really increase the payments and pay it off.
I read a lot about folk paying it off and then invest. However not overpaying and investing earlier to benefit from compound interest over a longer period also appeals.
In the short term I over pay by £100 a month and put £1,000 in a S&S isa it’s a topic that I think about quite a lot. Wife thinks I’m nuts and just live and let live.
okgo said:
More than my mortgage 
7-8% I’m thinking which seems reasonable on a 100% equities portfolio.
I’m not sure it’s even about the investment returns when the tax saving on the way in is so big. I.e. because of that, my pension could drop by 50% tomorrow and it’d still be a “better investment” than paying off the mortgage today. 7-8% I’m thinking which seems reasonable on a 100% equities portfolio.
You’ll end up in the same place (house paid off and a pension pot to live off), but in the case of prioritising the pension instead of the overpayments, you will end up with way more cash to retire on overall. At least that’s what my spreadsheet shows me.
funinhounslow said:
Zj2002 said:
I have £160,000 left (I’m 39) and I paid in £15,000 last summer as my S&S isa wasn’t performing. Immediately regretted it as the money is ‘gone’.
Could you get an offset mortgage? Or are they no longer “a thing”? I don’t seem to hear much about them anymore…fat80b said:
I’m not sure it’s even about the investment returns when the tax saving on the way in is so big. I.e. because of that, my pension could drop by 50% tomorrow and it’d still be a “better investment” than paying off the mortgage today.
You’ll end up in the same place (house paid off and a pension pot to live off), but in the case of prioritising the pension instead of the overpayments, you will end up with way more cash to retire on overall. At least that’s what my spreadsheet shows me.
But there is a tax later. But in our case we don’t get too much pension allowance so the investments go into ISA and then taxable accounts after that. You’ll end up in the same place (house paid off and a pension pot to live off), but in the case of prioritising the pension instead of the overpayments, you will end up with way more cash to retire on overall. At least that’s what my spreadsheet shows me.
bmwmike said:
Congrats OP. Really pleased for you.
Due to a bereavement I'm in the position to pay off when our fixed rate ends later this year. I'm in two minds. It seems a bit like cheating as we had made huge inroads into paying it off early by overpaying I sort of want to clear it myself, also for emotional reasons it's not really my money, and the circumstances which led to this money being in my account seems wrong etc. Few months to think about it anyway.
What would the person you inherited from think prudent? Due to a bereavement I'm in the position to pay off when our fixed rate ends later this year. I'm in two minds. It seems a bit like cheating as we had made huge inroads into paying it off early by overpaying I sort of want to clear it myself, also for emotional reasons it's not really my money, and the circumstances which led to this money being in my account seems wrong etc. Few months to think about it anyway.
RSTurboPaul said:
What happens if there's a massive global financial crash and both houses and investments (that you were planning to use to pay off a mortgage) plummet?
I struggle to muster confidence in our esteemed leaders and their handing of the financial situation over the longer term... lol
Then you still have a worthless mortgage free house to live in. You always need a roof over your head. I struggle to muster confidence in our esteemed leaders and their handing of the financial situation over the longer term... lol
Zj2002 said:
I chop and change my mind all the time about overpaying.
I have £160,000 left (I’m 39) and I paid in £15,000 last summer as my S&S isa wasn’t performing. Immediately regretted it as the money is ‘gone’.
I can’t decide whether to move and take on more debt, or really increase the payments and pay it off.
I read a lot about folk paying it off and then invest. However not overpaying and investing earlier to benefit from compound interest over a longer period also appeals.
In the short term I over pay by £100 a month and put £1,000 in a S&S isa it’s a topic that I think about quite a lot. Wife thinks I’m nuts and just live and let live.
Similar boat. We pay into a S&S ISA and also overpay (albeit different proportions). I also overpaid a chunk as we were coming to the end of a mortgage fix and didnt fancy paying more on my mgg than I already do. For us it's about spreading things out. I dont think there is any 'wrong' way to do it - just different methods work for different people at different times and in different ways.I have £160,000 left (I’m 39) and I paid in £15,000 last summer as my S&S isa wasn’t performing. Immediately regretted it as the money is ‘gone’.
I can’t decide whether to move and take on more debt, or really increase the payments and pay it off.
I read a lot about folk paying it off and then invest. However not overpaying and investing earlier to benefit from compound interest over a longer period also appeals.
In the short term I over pay by £100 a month and put £1,000 in a S&S isa it’s a topic that I think about quite a lot. Wife thinks I’m nuts and just live and let live.
I do appreciate the value in overpaying and seeing the monthly amounts tick down - but by god watching that money wink out of my account when I do has to be about the most least 'fun' way of spending my money.
BoRED S2upid said:
RSTurboPaul said:
What happens if there's a massive global financial crash and both houses and investments (that you were planning to use to pay off a mortgage) plummet?
I struggle to muster confidence in our esteemed leaders and their handing of the financial situation over the longer term... lol
Then you still have a worthless mortgage free house to live in. You always need a roof over your head. I struggle to muster confidence in our esteemed leaders and their handing of the financial situation over the longer term... lol
AceRockatansky said:
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.
Just remember time waits for no one, and no one dies thinking what an amazing life they lived because they managed to clear their mortgage early.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.
Life is about experiencing new things, don't always assume you will have the good health needed to experience those things, money isn't even 'real' these days. Life is for living not for watching numbers in your bankaccount.
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