I paid off my mortgage today

[funinhounslow]

Wololo said:

It doesn't sound like it was pointless! Perhaps "mathematically sub-optimal"...

I also paid my mortgage off early

It was certainly not the financially “logical” thing to do but there are significant advantages to having that burden gone that is difficult to put a price on and will vary for each individual anyway

For those who are risk adverse and/or value peace of mind the financial trade off is worth it

Congrats OP!

[djc206]

funinhounslow said:

I also paid my mortgage off early

It was certainly not the financially “logical” thing to do but there are significant advantages to having that burden gone that is difficult to put a price on and will vary for each individual anyway

For those who are risk adverse and/or value peace of mind the financial trade off is worth it

Congrats OP!

Horses for courses isn’t it.

My wife and I are in very safe employment and do ok so our mortgage just isn’t a concern for us. We also have a savings buffer that would mean we could both be out of work for over a year and all our financial commitments would be met. I got lucky and managed to fix early last year at 2.something% for 5 years so the current rates are of little concern, about the only financially prudent decision I’ve ever made I reckon. Consequently, it doesn’t make much sense for us to throw money into our mortgage, it just merrily ticks down in the background and we’re happy with that.

If I were the sole breadwinner, self employed, in volatile employment, looking at a steep rate, approaching desired retirement age or any number of other factors I would definitely view things differently. So many variables that there isn’t a right or wrong option just personal perception. I’m happy for the OP, it’s clear that they feel a weight has been lifted and we should all be happy for someone who woken up today a little happier than yesterday.

[Gary C]

funinhounslow said:

Wololo said:

It doesn't sound like it was pointless! Perhaps "mathematically sub-optimal"...

I also paid my mortgage off early

It was certainly not the financially “logical” thing to do but there are significant advantages to having that burden gone that is difficult to put a price on and will vary for each individual anyway

For those who are risk adverse and/or value peace of mind the financial trade off is worth it

Congrats OP!

I suppose it depends upon if its a burden.

I retire in the next 12/24 months (or more accurately I wil take my pension in 2025) and we are considering moving and I would be fine continuing with a mortgage if necessary depending on what we see.

No pension pot to worry about depleting makes a difference I suppose.

[bazza white]

congrats. I look forward to that day in some ways but ill keep moving up ladder until near pension age.


Just finishing my first term of 5 years out of 25. have to say its flow by and only just finishing the renovation.

[covmutley]

I think this just shows there is no right answer, and down to life choices.

We stretched ourselves and have relatively little in savings. It does stress me out sometimes, although not so much we are now less than 50% ltv. Worst comes to worst I could sell, buy a smaller 4 bed in less nice area and be mortgage free.

We really enjoy the location we live in and I'm happy to pay the bank more for that. It also meant our kids went to good schools and are surrounded by people that are generally good influences on them.

When we moved here, I spoke to my dad and he recommended stretching ourselves. His point being that you buy the house and struggle for a bit, but the price you pay is fixed, and as wages go up it starts to get easier. 7 years in, it is starting to feel that way. Our mortgage felt high,but now it seems to compare to the rent on a decent 3 bed house.

In another 7 years when my kids will be adult my outgoings should be less, so I can overpay a bit then. But not much,I'm better off increasing my pension and avoiding the tax hit.

Edited by covmutley on Friday 9th June 07:58

[Whatdoidonext]

Thanks for all the hugely positive comments. I was a bit nervous when I posted this!

Great to see the different views and opinions. As others have said there's no right or wrong answer, only the one that works best for you.

We had the opportunity to borrow substantially more money than we ever accepted. In hindsight we've never had periods out of work, and seen decent salary increases and so bigger mortgages would have been fine, but I've no regrets for the decisions we made.

We made 2 well timed moves up the property ladder, and I think always found the sweet-spot between cost and what you got for it, without any significant compromises. The majority of our mortgages have also been during a period of incredibly low interest rates, which feels nice!

A week after making that final payment and it still feels great ??

[RDMcG]

Congrats! I am sure your OH is also happy. Mine was teary once it was cleared many years ago.

[OldSkoolRS]

Whatdoidonext said:

Thanks for all the hugely positive comments. I was a bit nervous when I posted this!

Great to see the different views and opinions. As others have said there's no right or wrong answer, only the one that works best for you.

We had the opportunity to borrow substantially more money than we ever accepted. In hindsight we've never had periods out of work, and seen decent salary increases and so bigger mortgages would have been fine, but I've no regrets for the decisions we made.

We made 2 well timed moves up the property ladder, and I think always found the sweet-spot between cost and what you got for it, without any significant compromises. The majority of our mortgages have also been during a period of incredibly low interest rates, which feels nice!

A week after making that final payment and it still feels great ??

It's a shame that you felt nervous about posting, though there have been a few snippy comments, it's mostly been positive. I post on a huge retirement thread on here and the one take away is that there is no right or wrong answer and it's the same here.

PS. Nearly a year on and it still feels great to me, especially when planning my budget and one big bill is missing from the outgoings column.

[covmutley]

Yes, that retirement thread is the same. Some people see 3 luxury holidays per year as important for a 'comfortable' retirement, I suppose especially if you've been used to that in working life, whereas heaven for others is a good walk followed by a slice of cake, or fish and chips out of a wrapper sat on a harbour wall.

[alscar]

covmutley said:

I think this just shows there is no right answer, and down to life choices.

We stretched ourselves and have relatively little in savings. It does stress me out sometimes, although not so much we are now less than 50% ltv. Worst comes to worst I could sell, buy a smaller 4 bed in less nice area and be mortgage free.

We really enjoy the location we live in and I'm happy to pay the bank more for that. It also meant our kids went to good schools and are surrounded by people that are generally good influences on them.

When we moved here, I spoke to my dad and he recommended stretching ourselves. His point being that you buy the house and struggle for a bit, but the price you pay is fixed, and as wages go up it starts to get easier. 7 years in, it is starting to feel that way. Our mortgage felt high,but now it seems to compare to the rent on a decent 3 bed house.

In another 7 years when my kids will be adult my outgoings should be less, so I can overpay a bit then. But not much,I'm better off increasing my pension and avoiding the tax hit.

Edited by covmutley on Friday 9th June 07:58

Your first sentence is so true.
I appreciate times were different but we stretched ourselves back in 2004 to buy our existing house which if we hadn't at least tried to go for I know we would have regretted.
IO Mortage which made the ( admittedly one of the then much ( much ) smaller BS's ) news sheet annual round up as being their biggest mortgage lent that year at 0.50% of the total !
I remember writing a hand written letter detailing how and when we would address the mortgage and the suggested extra capital repayments and it had to be approved by the CEO personally I was told.
It all worked out as expected but my point is I doubt computer would even say maybe today.

[soupdragon1]

covmutley said:

Yes, that retirement thread is the same. Some people see 3 luxury holidays per year as important for a 'comfortable' retirement, I suppose especially if you've been used to that in working life, whereas heaven for others is a good walk followed by a slice of cake, or fish and chips out of a wrapper sat on a harbour wall.

The thing about hols is that while I absolutely love a good holiday abroad, my general preference is for a lazy, sit by the pool, dip in the ocean type holiday. A nice way to switch off from work.

When I retire, I doubt I'll have the same desire to have a holiday that helps me 'switch off from work' as I won't be working anymore

So will I still have a desire to sit by the pool for a week to relax, when I've already been relaxing on a daily basis anyway? I don't know, but its food for thought.

[Whatdoidonext]

covmutley said:

Yes, that retirement thread is the same. Some people see 3 luxury holidays per year as important for a 'comfortable' retirement, I suppose especially if you've been used to that in working life, whereas heaven for others is a good walk followed by a slice of cake, or fish and chips out of a wrapper sat on a harbour wall.

I'd take the latter every single time!!!

[BAMoFo]

A lot of people have done well out of property and are looking back at things with the 20/20 vision of hindsight. It'll be interesting to see how this works out over the coming years for those that are relatively new to the property market and have been advised to get mortgaged up to the hilt.

[OldSkoolRS]

BAMoFo said:

A lot of people have done well out of property and are looking back at things with the 20/20 vision of hindsight. It'll be interesting to see how this works out over the coming years for those that are relatively new to the property market and have been advised to get mortgaged up to the hilt.

Ah yes...hindsight: I started a new ISA last week and by the time it had gone through and transferred to the new one (same provider) their rate had gone up by nearly 0.2% more. Not a huge amount, but over 3 years it adds up, but equally it could have stayed the same or gone down and I'd have lost. Sometimes you've just got to deal with what's in front of you and try to make an educated decision based on that.

I really don't know what I'd do if I was starting in the property market now though. We were pushed to get mortgaged to the hilt, but having had a few years post divorce paying a mortgage on my own and struggling, I didn't want to be bringing up kids living hand to mouth. That's why we went on the lower side; just enough to get the extra bedroom and detached, even if it was old and needed work. I made a bit on the post divorce house I suppose, but I guess my appetite for risk lowered once I had family and had by then suffered redundancy twice: It's all part of what steers your decisions based on the back story I suppose.

Re the holidays/being retired thing: In the past I liked more adventurous holidays and wouldn't sit around the pool much after the first day or so. Then I got to a point where I would enjoy just unwinding for a week or more doing very little apart from sitting around the pool/beach.

Our last holidays since I've retired are more back to my old ways of lots of walking about/exploring and seeing the area because I don't need to unwind now. It meant we could go away for longer as we were quite happy to self cater, so it was more like we'd done a house swap with another country to explore.

I'm sure others would abhor this as an option and only want a 5 star hotel or a big cruise, but that's the point about no right or wrong answer. I wouldn't object to such a holiday, but I don't have to go that route.

[alscar]

soupdragon1 said:

The thing about hols is that while I absolutely love a good holiday abroad, my general preference is for a lazy, sit by the pool, dip in the ocean type holiday. A nice way to switch off from work.

When I retire, I doubt I'll have the same desire to have a holiday that helps me 'switch off from work' as I won't be working anymore

So will I still have a desire to sit by the pool for a week to relax, when I've already been relaxing on a daily basis anyway? I don't know, but its food for thought.

Interesting question and probably one that only you can answer when the time comes.
If it helps at all I've now been in Chapter 2 for 17 months and it still feels like a holiday !
I think the biggest thing I've found so far is the freedom and flexibility to pretty much do what we want when we want - note I've not been abroad in that time but have managed 5 or so Hotel breaks in the UK.
I'm still not quite used to the fact that when we have been out or whatever I don't have to do work emails anymore but that in itself is a lovely feeling !

[jimmytheone]

Is there any reason i should NOT pay off the mortgage?

We've got the cash to do so and that cash is earning sod all in interest so it seems clear-cut, pay it off and be free (rate is currently 5%ish).

But, is there any benefit from maintaining even a small (20k) mortgage in terms of credit scores, possible future borrowing, etc? We've got an eye out for a holiday home/BTL which is probably dreaming a bit and may never even happen but would it be worth keeping a small outstanding mortgage balance to help any future borrowing?

Thanks all!

[rossub]

Why is your cash earning sod all - even locking away for just a year can get 6%

Best easy access are nearing 5%

[bmwmike]

jimmytheone said:

Is there any reason i should NOT pay off the mortgage?

We've got the cash to do so and that cash is earning sod all in interest so it seems clear-cut, pay it off and be free (rate is currently 5%ish).

But, is there any benefit from maintaining even a small (20k) mortgage in terms of credit scores, possible future borrowing, etc? We've got an eye out for a holiday home/BTL which is probably dreaming a bit and may never even happen but would it be worth keeping a small outstanding mortgage balance to help any future borrowing?

Thanks all!

If theoretically you could get a interest rate on the mortgage to match your return on savings, it becomes a cash flow question. The difference in rates and fees either way may answer your question of whether it's worth it. Another option is an offset mortgage equivalent to the cash amount so you earn no interest and pay no interest but maintain the facility.

Same boat as you and I'm paying it off, fwiw. In fact we are doing building work but I'm going to use the additional cash flow to fund that rather than debt.

[mikey_b]

jimmytheone said:

Is there any reason i should NOT pay off the mortgage?

We've got the cash to do so and that cash is earning sod all in interest so it seems clear-cut, pay it off and be free (rate is currently 5%ish).

But, is there any benefit from maintaining even a small (20k) mortgage in terms of credit scores, possible future borrowing, etc? We've got an eye out for a holiday home/BTL which is probably dreaming a bit and may never even happen but would it be worth keeping a small outstanding mortgage balance to help any future borrowing?

Thanks all!

Sure I read somewhere that having a mortgage company with an interest in the property helps protect you from certain types of ‘property theft’ where scammers somehow convince the land registry that they now own it, and cause untold problems. Mainly re-selling it again, from what I remember. Not 100% on the details, but that was the gist of it anyway. Seems reasonable insurance for what amounts to a few quid a year in repayments on the tiniest of mortgages.

[V1nce Fox]

Odd question, but what's the smallest anyone has remortgaged at? Planning on paying mine off when it comes to end of fixed term in just under 2 years, but what would I do if I needed say, 2-5k still? Do they even do mortgages that small?