Any down side to paying a mortgage off?
Discussion
fido said:
HenryJM said:
Guvernator said:
You might own every brick but technically the queen still owns the land it's sitting on! 
Not in the UK she doesn't.jdw1234 said:
And council tax and utility bills.
In theory the Gov could implement a new property tax. Didn't that happen in "Gone With The Wind?"
That's why your property is a "freehold estate" - it is not absolute ownership of the land but a right to act as if you absolutely own it.In theory the Gov could implement a new property tax. Didn't that happen in "Gone With The Wind?"
Ownership of the land is complex particularly if you want to know about airspace, oil etc. it also may vary depending on where you are and what you have, even back to the basic of whether you have freehold or leasehold.
But the Queen doesn't own the land in any normal interpretation. Sure, there is some she does own, there is also the Crown Estate but that, whilst sizeable, doesn't own the country and isn't really owned by her anyway - long story.
But the Queen doesn't own the land in any normal interpretation. Sure, there is some she does own, there is also the Crown Estate but that, whilst sizeable, doesn't own the country and isn't really owned by her anyway - long story.
HenryJM said:
Ownership of the land is complex particularly if you want to know about airspace, oil etc. it also may vary depending on where you are and what you have, even back to the basic of whether you have freehold or leasehold.
But the Queen doesn't own the land in any normal interpretation. Sure, there is some she does own, there is also the Crown Estate but that, whilst sizeable, doesn't own the country and isn't really owned by her anyway - long story.
Ok not necessarily owned by the Queen but owned by the state, the crown whatever term you want to put on it, it all all boils down to the fact that despite paying off what might be a substantial mortgage, the land isn't actually yours. If it was you wouldn't be subject to someone forcing you to sell it with a compulsory purchase order (because it's yours) nor would you in theory be subject to tax or need to gain planning permission for anything (again because it's yours). Unfortunately it is almost impossible to gain allodial title in the UK as they don't want you to have it for obvious reasons but it is doable with a lot of effort in Scotland and in some states in the US.But the Queen doesn't own the land in any normal interpretation. Sure, there is some she does own, there is also the Crown Estate but that, whilst sizeable, doesn't own the country and isn't really owned by her anyway - long story.
Guvernator said:
Ok not necessarily owned by the Queen but owned by the state, the crown whatever term you want to put on it, it all all boils down to the fact that despite paying off what might be a substantial mortgage, the land isn't actually yours. If it was you wouldn't be subject to someone forcing you to sell it with a compulsory purchase order (because it's yours) nor would you in theory be subject to tax or need to gain planning permission for anything (again because it's yours). Unfortunately it is almost impossible to gain allodial title in the UK as they don't want you to have it for obvious reasons but it is doable with a lot of effort in Scotland and in some states in the US.
Well that's all rather dependent on the terms used and what they mean. You write it as though there is one entity that the land is owned by, whether it is the Queen, the state, the Crown or whatever. So, for example, you imply that the Crown owns it and the person doesn't. Yet really it's not that simple, there are actually quite a number of different rights depending on the circumstances and there is generally no one entity that has a superset of rights that cover it all.It gets complex and we are probably referring to the same thing which, however it is addressed, doesn't mean that the Queen owns all the land, which was where this started from, from my perspective.
Do you have children?
When my sister went to university my parents had a mortgage and were means tested for her loan.
My parents paid off the mortgage, and when I went to University my parents were means tested again and the lack of mortgage meant I got less student loan. Something to do with monthly outgoings.
Not sure if thats the same these days, and I reckon in those heady days of cheap credit other people just lied on the forms as they didn't require evidence.
A mortgage (with current interest rates) is a cheap loan. You might get more return long term elsewhere for the money e.g. max out ISA allowances or buy a Ferrari.
When my sister went to university my parents had a mortgage and were means tested for her loan.
My parents paid off the mortgage, and when I went to University my parents were means tested again and the lack of mortgage meant I got less student loan. Something to do with monthly outgoings.
Not sure if thats the same these days, and I reckon in those heady days of cheap credit other people just lied on the forms as they didn't require evidence.
A mortgage (with current interest rates) is a cheap loan. You might get more return long term elsewhere for the money e.g. max out ISA allowances or buy a Ferrari.
Edited by was8v on Wednesday 7th January 13:41
HenryJM said:
It gets complex and we are probably referring to the same thing which, however it is addressed, doesn't mean that the Queen owns all the land, which was where this started from, from my perspective.
Yes it is complex but I didn't mean to imply the Queen owns everything, I was more trying to make the point that despite paying off your mortgage, you technically still don't own it all either. Just a bit of a kicker for all those smug mortgage free owners out there 
was8v said:
A mortgage (with current interest rates) is a cheap loan. You might get more return long term elsewhere for the money e.g. max out ISA allowances or buy a Ferrari.
So borrowing £120k and paying back £190k is a cheap loan as far as you're concerned? Edited by was8v on Wednesday 7th January 13:41
f
k me, what so you do? You must have money coming out of your ears!?gibbon said:
Factor in inflation and come back with the numbers.
Gibbon by name...Loads of folk were 'factoring in inflation' over the past ten years.
You can't just expect your house price to rise, otherwise those folk getting the 105% mortgages would have been fine and dandy.
But instead, we had a recession and you literally couldn't give some houses away.
Anyway, I digress, my original point was that whoever posted that mortgage money is cheap money (suggested buy a Ferrari or the like) clearly has a lot more money than me to throw away.
However you do the maths, £190/200k paid back for a £120k loan is nowhere near cheap money.
I was in a position to clear our interest only mortgage some years ago, and looked for a final settlement sum which was some £1500 above the mortgage due to early penalties, admin fee and something else fee.
I have retained an interest only mortgage of £1.47 payment per month ever since. I may look to half this later this year.
I have retained an interest only mortgage of £1.47 payment per month ever since. I may look to half this later this year.
TheLordJohn said:
Gibbon by name...
Loads of folk were 'factoring in inflation' over the past ten years.
You can't just expect your house price to rise, otherwise those folk getting the 105% mortgages would have been fine and dandy.
But instead, we had a recession and you literally couldn't give some houses away.
Anyway, I digress, my original point was that whoever posted that mortgage money is cheap money (suggested buy a Ferrari or the like) clearly has a lot more money than me to throw away.
However you do the maths, £190/200k paid back for a £120k loan is nowhere near cheap money.
No need to be insulting, but at the moment, I am borrowing at below inflation, and have investments making more than my loan funding costs.Loads of folk were 'factoring in inflation' over the past ten years.
You can't just expect your house price to rise, otherwise those folk getting the 105% mortgages would have been fine and dandy.
But instead, we had a recession and you literally couldn't give some houses away.
Anyway, I digress, my original point was that whoever posted that mortgage money is cheap money (suggested buy a Ferrari or the like) clearly has a lot more money than me to throw away.
However you do the maths, £190/200k paid back for a £120k loan is nowhere near cheap money.
Come back to me in ten years and ask who did the right thing. Im happy with my position.
gibbon said:
No need to be insulting, but at the moment, I am borrowing at below inflation, and have investments making more than my loan funding costs.
Come back to me in ten years and ask who did the right thing. Im happy with my position.
Oh, once in a while it happens, I bought a 911 about 5.00pm on the last day of a quarter, it clearly made a big difference for them selling it to me. Lending it to me via a loan put them over a line that was great for them so I gained from it, but it's rare.Come back to me in ten years and ask who did the right thing. Im happy with my position.
In the main - pay off what you own first, the big majority will work cheaper that way. (I also advocate simple loans, ones with loads of fancy conditions can end up costing more in the end that just borrowing it). But of course there will be people in a special circumstance that counteract that.
TheLordJohn said:
However you do the maths, £190/200k paid back for a £120k loan is nowhere near cheap money.
So tell me where you'd get a better rate for a loan of a similar size ? Can you explain the 190/200k paid back also ? I don't think anyone is suggesting you put 120k on your mortgage for 25 years but if they are please show me where you can borrow 120k for a lower rate, which was the original point.silverous said:
please show me where you can borrow 120k for a lower rate, which was the original point.
Indeed. My mortgage is something like 3%. I hear TSB are doing current accounts that return 5% interest, there maybe places that take larger deposits, or ISA allowances that in future might return higher rates - remember you can only deposit so much in a year to ISAs. 10 grand into it this year at 3% who knows what interest ISAs will be paying in 5 years time?The OP indicated they were near to paying off their mortgage, I had in my head maybe they had 20k left (not 120k).
That money is loaned at a low rate compared to other means of getting money and interest rates are expected to rise. If they are tempted to get a car (Ferrari? who knows) in the near future, or have plans to extend their house in the next 5 years, it might be best to do that now while the loan rate is cheap.
Rather than defer for 5 years and have to finance home improvements or cars at a higher rate.
I don't have a crystal ball nor am I a financial advisor....
Old Merc said:
No down side at all as far as I`m concerned.Believe me after paying for years its a wonderful feeling being mortgage free.I know when someone is like me,no mortgage,no loans or debts,credit card paid off in full every month they have a poor credit rating!!so what I don't care.
I'm 100% in agreement with this. Who cares about the credit rating. We paid ours off about 6 months ago and the financial freedom it has given us is fantastic. However, It will be even better in June/July when our new 2 bed flat is built (fully paid for) and will be rented out and the monthly rental is free for us to save/spend. Happy days !!!! Question - What do you do with your money after paying off the mortgage? Seems daft just to sit on the extra cash. Cars are a nice thought but the sensible side of me says to buy another property and rent it out. So, back to paying another mortgage, just hopefully with someone else's money 
Does your attitude actually change once you've paid your mortgage off? This is something I'm working towards but am already wondering what I'll do when I get there.
Does your attitude actually change once you've paid your mortgage off? This is something I'm working towards but am already wondering what I'll do when I get there.
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