Paying off your mortgage

[matc]

A couple of colleagues of mine (about 10 years older than me) have both recently paid off their mortgages, so are now enjoying having the things in life that a bigger disposable income gives.

This got me thinking how I could possibly pay my mortgage off within the next 10 years. I'm like a lot of people I guess, I live in a nice reasonable sized house, both my partner and I drive nice cars and we live a lifestyle that lets us eat out when we like, and generally buy whatever we need, but we don't have an enormous savings fund.

So would I be better off downsizing the car, cancelling my Sky contract, not eating out as much, and generally cutting back in order to focus on being debt free, or carry on as I am now and keep paying the mortgage for next 20 years?

What position are others in and is being 'debt free' a big goal for most?

[sday12]

Life can be very painful and very short.

Enjoy it whilst you can.

On another note, everyone under fifty that I know that have paid off their mortgagaes are dull as ditchwater.

[LordHaveMurci]

matc said:

A couple of colleagues of mine (about 10 years older than me) have both recently paid off their mortgages, so are now enjoying having the things in life that a bigger disposable income gives.

This got me thinking how I could possibly pay my mortgage off within the next 10 years. I'm like a lot of people I guess, I live in a nice reasonable sized house, both my partner and I drive nice cars and we live a lifestyle that lets us eat out when we like, and generally buy whatever we need, but we don't have an enormous savings fund.

So would I be better off downsizing the car, cancelling my Sky contract, not eating out as much, and generally cutting back in order to focus on being debt free, or carry on as I am now and keep paying the mortgage for next 20 years?

What position are others in and is being 'debt free' a big goal for most?

Depends on what's important to you I guess, I know people my age who have cleared their mortgages & have six figure savings, I have a six figure mortgage & fewer savings. But, I reckon I've had a lot more fun over the last 15 years than any of them.

I guess being mortgage free must bring a feeling of security but what would you rather have done when you're lying on your death bed?

[matc]

I agree with both, but when I found out that both colleagues of mine had paid theirs off at a relatively young age I wondered if I was doing the wrong thing by not saving a big part of my salary each month to pay it off early.

TBH in their shoes I would be looking to move to a bigger/nicer house, and continue paying a mortgage.

[Corpulent Tosser]

I increased payments on my mortgage when I could afford to, put lump sums into the account when I could afford to and cleared my mortgage early, however I did this without cancelling Sky subscription or stopping going out for meals etc.
I guess like most things in life it is about balance, weigh up what you will gain and what you lose to achieve that gain.

[LordHaveMurci]

matc said:

I agree with both, but when I found out that both colleagues of mine had paid theirs off at a relatively young age I wondered if I was doing the wrong thing by not saving a big part of my salary each month to pay it off early.

TBH in their shoes I would be looking to move to a bigger/nicer house, and continue paying a mortgage.

On saying what I said, part of me thinks I should have overpaid my mortgage while I was single/no kids, could have reduced it greatly without missing the money, or as you say, could be living in a bigger house now with the same size mortgage. Oh well, never mind!

[matc]

Corpulent Tosser said:

I increased payments on my mortgage when I could afford to, put lump sums into the account when I could afford to and cleared my mortgage early, however I did this without cancelling Sky subscription or stopping going out for meals etc.
I guess like most things in life it is about balance, weigh up what you will gain and what you lose to achieve that gain.

It's certainly made me think about what we're spending money on at the moment. I've never really sat down and worked out what I'm spending every month, I know roughly what my outgoings are, but I don't set myself a spending limit each month....maybe I need to start.

[Gazzas86]

I wish i could say i'll be mortgage free early, (started a 30 yr term November last year), i would love to overpay and have it done by the time im mid 40's, (currently 25), however..... this house im in at the moment 'isnt the one', i.e. i plan on moving 3 times etc upsizing every time, and thus increasing my mortgage each time now doubt. This will no doubt have an effect on when i finish the mortgage so i think its hard to say when you'll have it payed off, unless you plan on staying in that house forever .

Gaz

[zcacogp]

All depends upon what's important to you and what your goals are.

As a general rule, paying money on interest seems like poor economics to me, but it's necessary. Mind you, I'm not Mr Interesting by any stretch of the imagination.

As the ol' saying goes, you pays your money and you makes your choice.


Oli.

[jimslops]

OP - My advice when wondering how much I should or should not squander when I found myself with reasonable disposable income. Find a happy medium, a middle ground. You will be happy you are not sacraficing luxuries and you will be happy to see savings grow. Make it fun and split it up. Lots of info on stocks and shares ISA's on money supermarket as a good tax free start.

[Pickled Piper]

Entirely down to the individual, their outlook on debt equity ratio and risk/ reward, long term vs short term, asperations etc.etc

Nothing special about being mortgage free if your house is only worth £80,000, obviously more of an achievement to have a £2million house with a £200,000 mortgage.

Net worth is probably a better indicator of financial success.

pp

[mattdaniels]

If your mortgage allows it, and it doesn't compromise your lifestyle too much, how about overpaying your mortgage every month? You get a nice warm feeling of watching the mortage repayment date start to come in from the term date and you don't resent it by having to give up a lot of "quality of life" things. A happy compromise.

[Alfa numeric]

I spent a lunchbreak playing with this and found it very illuminating:

https://mortgages.hsbc.co.uk/overpayment-calculato...

I'm currently overpaying by about 10% and according to the calculator it's going to knock three years off my mortgage.

[sa v8 mate]

Think I'm a bit older than you lot (47), I started my first 25 yr endowment mortgage in '89, then increased it twice when I moved house, the last time being in '99.So it will drop down in stages as each endowment finishes i.e 2014 then 2016 and finally 2024. Don't think many people have endowments now, and for a good reason, non of my policies are gonna pay out the full amount. Luckily I've got a good share scheme at work which should pay off the difference. On the plus side, being an old git means I paid normal house prices, and the house is worth about 3 times the mortgage.

[RizzoTheRat]

I'm lucky enough to be paying less on the mortgage than I'm getting on savings. I reckon I could pay it off in 7 years at a push (18 years left otherwise), but I'm better off putting money in the bank rather than paying it off as I will want to move again in the next few years and I won't get a mortgage at that low a rate again. Paying it off that early would save me about 7.5k which is less than I'd have thought, but having the money in the bank means I can spend it if I want.

[mattdaniels]

sa v8 mate said:

I started my first 25 yr endowment mortgage in '89,

Started my first (and only) endowment mortgage in 97 and within a few years switched to a repayment mortgage and unlinked the endowment from the mortgage. The interest rate has dropped nicely so I'm overpaying that mortgage and paying in to an endowment which will mature in a couple of years with a little lump sum which should make a decent dent in the current mortgage.

[s3fella]

doogz said:

Only another 22 years to go on mine. Still, should be cleared by the time i'm 49, although ideally a fair bit sooner.

The day i get rid of that fker, i'm having a party.

What time and should we bring anything?

[Burnham]

matc said:

I agree with both, but when I found out that both colleagues of mine had paid theirs off at a relatively young age I wondered if I was doing the wrong thing by not saving a big part of my salary each month to pay it off early.

TBH in their shoes I would be looking to move to a bigger/nicer house, and continue paying a mortgage.

Pickled Piper said:

Entirely down to the individual, their outlook on debt equity ratio and risk/ reward, long term vs short term, asperations etc.etc

Nothing special about being mortgage free if your house is only worth £80,000, obviously more of an achievement to have a £2million house with a £200,000 mortgage.

Net worth is probably a better indicator of financial success.

pp

This exactly, I'm mortgage free in a property I dont necessary want to be in...doesnt really mean anything. I'll be up to my neck in another mortgage soon enough when the right house appears. The fact I dont have a repayment to make each month doesnt mean I'm less careful with my disposable/saveable income. In fact, as I'm squirrilling as much as possible away for the next place (to reduce the amount I need to borrow) I'm probabbly more careful now than ever.

jimslops said:

OP - My advice when wondering how much I should or should not squander when I found myself with reasonable disposable income. Find a happy medium, a middle ground. You will be happy you are not sacraficing luxuries and you will be happy to see savings grow. Make it fun and split it up. Lots of info on stocks and shares ISA's on money supermarket as a good tax free start.

Wise words, theres no point in risking everything or saving to the point that it becomes your sole purpose...its all about balance.

[jeff m2]

Before you pay off a mortgage you should look at your total assets (and liabilities)

While being mortgage free is obviously nice, a more balanced approach may be worth considering.

Give some thought to having a mortgage with a zero balance and nada in bank/shares/bonds.

Or a 50K mortgage with 50K in bank/shares/bonds. (Insert your own mort bal)

The second choice gives you options, you can still pay off your mortgage (or reduce it) at any time should interest rates move up.

[Lunablack]

Paid mine off in 2008 at the age of 46... Best thing I ever did.... Paid it off with a combination of overpaying and then when it got low enough I used some money left by my grandad, to Finnish it off....

I now spend the mortgage money on toys