No hurry to pay off the mortgage

[covmutley]

That 5% includes for inflation. So 8% is not far off.

Also, it depends on attitude risk. I'm 25 years from pension age, so take some punts. I'm 22% up this year.

In 20 years time, I will probably be in 'safe' ftse 100 companies getting almost no growth but dividends of say 5-6%.

I have old pensions that I consolidated into a SIPP. Before, I just let it go out my salary and I didn't care where it was really going, as I was 'saving'. Now I see it as investing . Single percentage point make a huge difference.

So, paying in 5k per year for a 35 year career in safer funds giving say 4% gives a pot of £382k, excl inflation.

5% return =£474k
6%= £590k
12% = £2.4m

Compound interest, the 6th wonder of the world!!

OK, the last one is pushing it, but is possible in the right funds with the right attitude for risk, at the right time in life!

Edited by covmutley on Monday 26th October 19:18

[birdcage]

My mortgage advice. Take out a colossal mortgage, as long as you can afford it. interest only, let inflation erode the debt and when its time to downsize more free money!

[GT03ROB]

Hobo said:

For those that are questionning the levels of annual growth available from investments, and saying even 8% is unrealistic, I would say you need to look harder. Below are the funds which I am currently invested in, and their returns for the past 5 years;

AXA framlington global technology, 49% / 15% / 16% / 24% / 39%

Baillie gifford amercian, 109% / 7% / 26% / 20% / 25%

Baillie gifford global discovery, 68% / 5% / 16% / 26% / 21%

Baillie gifford positive change, 78% / 9% / 14% / na / na

Blackrock world technology, 77% / 19% / 14% / 35% / 36%

Fidelity global technology, 37% / 28% / 7% / 23% / 44%

Janus henderson global technology, 41% / 13% / 10% / 28% / 37%

Legal & general global technology, 46% / 18% / 13% / 23% / 38%

Polar capital global technology, 60% / 15% / 16% / 29% / 46%

Morgan stanley us advantage, 62% / 13% / 15% / 12% / na

DMS charteris gold & precious metals, 59% / 30% / -15% / -26% / 140%

LF ruffer gold, 72% / 42% / -11% / -8% / 88%

Smith & williamson artificial intelligence, 51% / 21% / 16% / na / na


As you can see, the above return far in excess of 8% per annum. These are not the best returning funds I could find, as I tried to find funds which performed consitantly well year on year (aside from the gold/previous metals which were more recent purchases based on current financial climate). The technology funds have performed very very well in Covid times, but before that have done year on year far in excess of 8%.

The level of fund overlap in that portfolio, would lead me to ask why you do not invest directly in the companies concerned. if your portfolio is of any size you will be so heavily committed to Alphabet, Amazon, Apple, Facebook, Microsoft you should be investing in them directly. Those 5 companies will make up a huge proportion of your portfolio based on that fund mix. In short you have an all or nothing portfolio.

[okgo]

Most of them are generally about 50% longtail from what I've seen, certainly the first 50% is the names you've listed though.

[Hobo]

GT03ROB said:

The level of fund overlap in that portfolio, would lead me to ask why you do not invest directly in the companies concerned. if your portfolio is of any size you will be so heavily committed to Alphabet, Amazon, Apple, Facebook, Microsoft you should be investing in them directly. Those 5 companies will make up a huge proportion of your portfolio based on that fund mix. In short you have an all or nothing portfolio.

Appreciated.

That said, they have consistently returned over the past 5 years to the tune of 30% per annum overall, so not sure there is that much to complain about when mortgage rates (to which this thread is related to) have been probably no more than 3%.

I'll stick to not paying off the mortgage, and investing in funds

[Uhtred]

We just got our first house this year (I put in 2/3 of the deposit and pay 2/3 of the mortgage every month).

Was meant to get something in writing at the time to say i owned a certain percentage and she owned a certain percentage but never bothered.

I’m now wondering if it’s worth starting to overpay. Currently a 25 term at a 2.29% interest rate. I could easily overpay by a few hundred every month however I have the feeling my partner doesn’t or not yet anyway.

Any issues if we were to proceed with our current approach whereby I would overpay by two thirds of a certain amount and she pays a third? Not sure if it would confuse who receives what in the event of a split..

[ro250]

Uhtred said:

We just got our first house this year (I put in 2/3 of the deposit and pay 2/3 of the mortgage every month).

Was meant to get something in writing at the time to say i owned a certain percentage and she owned a certain percentage but never bothered.

I’m now wondering if it’s worth starting to overpay. Currently a 25 term at a 2.29% interest rate. I could easily overpay by a few hundred every month however I have the feeling my partner doesn’t or not yet anyway.

Any issues if we were to proceed with our current approach whereby I would overpay by two thirds of a certain amount and she pays a third? Not sure if it would confuse who receives what in the event of a split..

Is this your business partner or your wife?

Sarcasm aside, I don't think it works like that unless you really do a proper prenup. Many, in fact probably most, couples don't equally contribute to the mortgage.

[Raymond Reddington]

Uhtred said:

We just got our first house this year (I put in 2/3 of the deposit and pay 2/3 of the mortgage every month).

Was meant to get something in writing at the time to say i owned a certain percentage and she owned a certain percentage but never bothered.

I’m now wondering if it’s worth starting to overpay. Currently a 25 term at a 2.29% interest rate. I could easily overpay by a few hundred every month however I have the feeling my partner doesn’t or not yet anyway.

Any issues if we were to proceed with our current approach whereby I would overpay by two thirds of a certain amount and she pays a third? Not sure if it would confuse who receives what in the event of a split..

If you are already thinking about splitting up, was it a good idea to commit to buying a house together??

[gangzoom]

Despite all the talk of magic money trees I've just overpaid another £15k into our mortgage and will put more in around NewYears. The aim is to hit sub 40% LTV when its for renewal come early 2022, at which point I will be 40, the house was bought when I was 35 at 70% LTV.

Hopefully with any luck if we keep up overpayments at the same rate by the time I'm 45 we'll be essentially mortgage free with a LVT near single digits. I'll have a look at magic money trees than knowing we are 100% debt free including the owning the roof over our heads .

I find overpayment calculators a great way to keep focused on the end goal. Its amazingly how much interest you payout to the mortgage companies even with low interest rates.

https://www.moneysavingexpert.com/mortgages/mortga...

Edited by gangzoom on Tuesday 3rd November 04:44

[rossub]

Raymond Reddington said:

Uhtred said:

We just got our first house this year (I put in 2/3 of the deposit and pay 2/3 of the mortgage every month).

Was meant to get something in writing at the time to say i owned a certain percentage and she owned a certain percentage but never bothered.

I’m now wondering if it’s worth starting to overpay. Currently a 25 term at a 2.29% interest rate. I could easily overpay by a few hundred every month however I have the feeling my partner doesn’t or not yet anyway.

Any issues if we were to proceed with our current approach whereby I would overpay by two thirds of a certain amount and she pays a third? Not sure if it would confuse who receives what in the event of a split..

If you are already thinking about splitting up, was it a good idea to commit to buying a house together??

.... and how many people have been fked over by their other half upon a split, handing over 50% of the equity? Who knows what lies ahead.

Life is short and it can take a very long time to ensure you have a nice place to live when you retire.

[cossy400]

Uhtred said:

We just got our first house this year (I put in 2/3 of the deposit and pay 2/3 of the mortgage every month).

Was meant to get something in writing at the time to say i owned a certain percentage and she owned a certain percentage but never bothered.

I’m now wondering if it’s worth starting to overpay. Currently a 25 term at a 2.29% interest rate. I could easily overpay by a few hundred every month however I have the feeling my partner doesn’t or not yet anyway.

Any issues if we were to proceed with our current approach whereby I would overpay by two thirds of a certain amount and she pays a third? Not sure if it would confuse who receives what in the event of a split..

If your already thinking of trouble ahead then, what ever you was going to over pay i would set up another account that only you need to know about and pay it in to that.

Current climate surely money in the bank is a safe option.

[xeny]

Raymond Reddington said:

If you are already thinking about splitting up, was it a good idea to commit to buying a house together??

I think about splitting up every day. It's the only thing that has kept me in the relationship these past 20 years.

[Uhtred]

Raymond Reddington said:

If you are already thinking about splitting up, was it a good idea to commit to buying a house together??

I’m not thinking about splitting up but I’d be very naive person to think that it couldn’t ever be a possibility in the future.

My girlfriend acknowledges that I should own a larger share, I’m just not sure what happens in the event of a split or a house sale. I’ve read that you can get a cohabitation agreement (“no-nup”) but not sure if it can be put in place retrospectively...

[Nickbrapp]

Uhtred said:

I’m not thinking about splitting up but I’d be very naive person to think that it couldn’t ever be a possibility in the future.

My girlfriend acknowledges that I should own a larger share, I’m just not sure what happens in the event of a split or a house sale. I’ve read that you can get a cohabitation agreement (“no-nup”) but not sure if it can be put in place retrospectively...

Get a deed of variation or trust that explains that when the house is sold the equity is shared in a certain way. A solicitor can sort.

[pb8g09]

I was/am in similar waters. We wrote up a Declaration of Trust when we bought the place as I deposited about 96% of the deposit which covers me for that in the event of a split (which is now happening). It also gives me the right to stay in the house now for the next 6 months whilst we attempt to sell it.

The only annoyance is that all profits of sale after selling costs and deposit are split 50:50 which isn't that fair given I covered 70% of the running costs, but so be it. You don't get anywhere in life if you're only looking at the numbers.

I'd recommend drawing up one of these. If you're worried about what happens when you break up, I'd suggest putting the money into a side account/ISA and then when renewal time comes, you pay off as a lump sum, draw up another Declaration and add that overpayment into your share. I hope you don't let onto her that you're insecure about your relationship, else she'll either turn into a nervous wreck and/or jumping into bed with someone else...

[BoRED S2upid]

Uhtred said:

We just got our first house this year (I put in 2/3 of the deposit and pay 2/3 of the mortgage every month).

Was meant to get something in writing at the time to say i owned a certain percentage and she owned a certain percentage but never bothered.

I’m now wondering if it’s worth starting to overpay. Currently a 25 term at a 2.29% interest rate. I could easily overpay by a few hundred every month however I have the feeling my partner doesn’t or not yet anyway.

Any issues if we were to proceed with our current approach whereby I would overpay by two thirds of a certain amount and she pays a third? Not sure if it would confuse who receives what in the event of a split..

Oh how naive! You get diddly squat my friend it doesn’t matter what you contribute you don’t sit down with lawyers and take into account mortgage payments, who pays the bills, who buys the food...

[toon10]

pb8g09 said:

I was/am in similar waters. We wrote up a Declaration of Trust when we bought the place as I deposited about 96% of the deposit which covers me for that in the event of a split (which is now happening). It also gives me the right to stay in the house now for the next 6 months whilst we attempt to sell it.

The only annoyance is that all profits of sale after selling costs and deposit are split 50:50 which isn't that fair given I covered 70% of the running costs, but so be it. You don't get anywhere in life if you're only looking at the numbers.

I'd recommend drawing up one of these. If you're worried about what happens when you break up, I'd suggest putting the money into a side account/ISA and then when renewal time comes, you pay off as a lump sum, draw up another Declaration and add that overpayment into your share. I hope you don't let onto her that you're insecure about your relationship, else she'll either turn into a nervous wreck and/or jumping into bed with someone else...

Similar to me. We had a declaration of trust setup as I put in 80% of the deposit. It's fairly straight forward for us if anything happens as we both pay similar for the mortgage and bills (approx 55% me, 45% her) so we'd just split any profit down the middle.

[Uhtred]

Nickbrapp said:

Get a deed of variation or trust that explains that when the house is sold the equity is shared in a certain way. A solicitor can sort.

Thanks, someone who was able to actually provide succinct advice without making wild assumptions.

[vulture1]

It should be made law that a legal agreement is made before couples buy a house with different contributions.
It would remove the stigma of it not being romantic/ trusting of the guy (usually) having to bring it up in conversation.

[pb8g09]

vulture1 said:

It should be made law that a legal agreement is made before couples buy a house with different contributions.
It would remove the stigma of it not being romantic/ trusting of the guy (usually) having to bring it up in conversation.

Indeed. I had to word it as "this way you're protected and can walk away with all your money still if we break up" and it was agreed. I wonder how you'd work it though if one person provided the deposit and the other person pays 90%+ of the mortgage/running costs.... Actually, I don't want the headache picturing untangling that mess..