No hurry to pay off the mortgage

[gangzoom]

Mack11 said:

The comment a few posts back about borrowing money on your mortgage to invest is interesting as that is what you are often doing by renovating, most people rationalise it by saying “ My house will be worth x” ....maybe it won’t.

Am under no illusions about 'adding value' to the house through building work, we are doing it to make our home a nicer place to live, and we would have done it all through savings in a few years time but when interest rates on mortgages are so low why not do it sooner?

Compound interest works both a reducing amount of debt too. Overpay the mortgage and the total pay back on the mortgage is sustainability lower.

[Shnozz]

Mack11 said:

The comment a few posts back about borrowing money on your mortgage to invest is interesting as that is what you are often doing by renovating, most people rationalise it by saying “ My house will be worth x” ....maybe it won’t.

This seems the MO of quite a number of mates. Weekly texts with Zoopla valuations and pumping in every spare penny into property improvements. At best, paying down lengthy mortgages without overpayment, and in some cases remortgaging and gaining more debt to "invest" in what they see as an ever appreciating asset.

I hope they are right, for their sake. So far, their gamble has been paying off and have seen 20 - 30% gains in the last few years which has given them increased confidence in their position.

[roadie]

gangzoom said:

Compound interest works both a reducing amount of debt too. Overpay the mortgage and the total pay back on the mortgage is sustainability lower.

As satisfying as it is to see numbers go up (investments) it is also to see them go down (mortgage). I overpay my relatively small monthly mortgage payment by 100% per month and invest all cash left over. Proportionally that's about 1/3 mortgage overpayment and 2/3 investment.

In an era of inflating asset values I think this gives me the greatest flexibility.

[SkinnyPete]

SkinnyPete said:

SkinnyPete said:

TLDR: changed my mind, decided to overpay

The good news is my mortgage is now down to about £35k, and I feel very content with that.

Maybe I'll update this thread in another couple of years to congratulate myself on being mortgage-free, we'll see.

I thought it was worth posting an update.

The good news I now owe only £12,500, which I should be able to clear in the next few months.

It has felt like a bit of a bottomless pit at times, as no matter how much I earn and no matter how much I save, the mortgage just swallows it up.

The problem now is to clear the mortgage; the ERC is coming out a few hundred quid more than the interest over the remaining course of the loan. Technically it makes sense to wait for the term to finish and then pay off the remaining balance, but for the sake of a few hundred quid, I think I'll just get rid of it when I can. This is very much an emotional decision.

Overall though, I'm very happy, and can't wait to live life mortgage free.

I’m happy to report that I paid off the last of my mortgage this week. Mortgage-free at 33 definitely has a nice ring to it.

I am absolutely ecstatic, but I think it’ll take a couple of months to fully sink in, when I realise, I don’t have a significant direct debit going out every month.

This isn’t the type of news you can share freely, except for with strangers on the internet, so I’m quietly celebrating on my own tonight with a takeaway and some JD

Edited by SkinnyPete on Friday 24th September 18:41

[Welshbeef]

SkinnyPete said:

I’m happy to report that I paid off the last of my mortgage this week. Mortgage-free at 33 definitely has a nice ring to it.

I am absolutely ecstatic, but I think it’ll take a couple of months to fully sink in, when I realise, I don’t have a significant direct debit going out every month.

This isn’t the type of news you can freely share, except for with strangers on the internet, so I’m quietly celebrating on my own tonight with a takeaway and some JD

Edited by SkinnyPete on Friday 24th September 18:36

Fantastic - very well done.

Now it’s time to put more into pensions - and ISAs so that you can drag forward the date when you financially could retire. Financial freedom day.

[SkinnyPete]

Welshbeef said:

Fantastic - very well done.

Now it’s time to put more into pensions - and ISAs so that you can drag forward the date when you financially could retire. Financial freedom day.

You're not wrong.

I am very much aboard the 'FIRE' train. I've already increased my pension contributions slightly and my standard monthly repayments which were going to my mortgage provider are now finding their way to Vanguard

[Chris Type R]

SkinnyPete said:

I’m happy to report that I paid off the last of my mortgage this week. Mortgage-free at 33 definitely has a nice ring to it.

I am absolutely ecstatic, but I think it’ll take a couple of months to fully sink in, when I realise, I don’t have a significant direct debit going out every month.

This isn’t the type of news you can share freely, except for with strangers on the internet, so I’m quietly celebrating on my own tonight with a takeaway and some JD

Congratulations.

(I wish I was in the same position at your age, but I only took out my first mortgage at 34).

[BobToc]

Well done that man, enjoy the weekend!

[Chicken Chaser]

Wow well done. Just out of interest, will your family position change as you get older or is this the forever home?

I realised the equity in our place a couple of years ago and spent a good chunk on extensions to which we now have a very decent usable home where the family can grow. Although I'm not mortgage free, Im quite satisfied in what we have and the mortgage size relative to what we bring home. Just turned 40 and another 15 years to go but focusing on paying that off would mean us sacrificing living and giving our young kids experiences. There's a balance for everyone and o think we have found ours.

[T5SOR]

I still have 24 years and I was planning to add another £100k for an extension

[vulture1]

SkinnyPete said:

SkinnyPete said:

SkinnyPete said:

TLDR: changed my mind, decided to overpay

The good news is my mortgage is now down to about £35k, and I feel very content with that.

Maybe I'll update this thread in another couple of years to congratulate myself on being mortgage-free, we'll see.

I thought it was worth posting an update.

The good news I now owe only £12,500, which I should be able to clear in the next few months.

It has felt like a bit of a bottomless pit at times, as no matter how much I earn and no matter how much I save, the mortgage just swallows it up.

The problem now is to clear the mortgage; the ERC is coming out a few hundred quid more than the interest over the remaining course of the loan. Technically it makes sense to wait for the term to finish and then pay off the remaining balance, but for the sake of a few hundred quid, I think I'll just get rid of it when I can. This is very much an emotional decision.

Overall though, I'm very happy, and can't wait to live life mortgage free.

I’m happy to report that I paid off the last of my mortgage this week. Mortgage-free at 33 definitely has a nice ring to it.

I am absolutely ecstatic, but I think it’ll take a couple of months to fully sink in, when I realise, I don’t have a significant direct debit going out every month.

This isn’t the type of news you can share freely, except for with strangers on the internet, so I’m quietly celebrating on my own tonight with a takeaway and some JD

Edited by SkinnyPete on Friday 24th September 18:41

Well done. Don't let any females find out you have an entire house paid off and are 33

My aim is sticking to my original plan of 49 having started at 24 and using any spare money for investments or business use.

[LeadFarmer]

SkinnyPete said:

I’m happy to report that I paid off the last of my mortgage this week. Mortgage-free at 33 definitely has a nice ring to it.

I am absolutely ecstatic, but I think it’ll take a couple of months to fully sink in, when I realise, I don’t have a significant direct debit going out every month.

This isn’t the type of news you can share freely, except for with strangers on the internet, so I’m quietly celebrating on my own tonight with a takeaway and some JD

Like you, I managed to pay off my mortgage at age 33 by overpaying. I celebrated like you, then had a long hard think about the life I wanted. We had recently had a baby and the option of living mortgage free with disposable income was appealing, but I didn't like the idea of wasting my money away and wanted to do something financially sensible with it.

So a couple of years later we decided to move to a bigger house, larger garden, near a better school, walking distance to a very nice park - all in all a much nicer place to bring up our child. But this came at the cost of taking out a £140k mortgage. Again we overpaid so it should be paid off by the time I plan to retire. But what then....!

Edited by LeadFarmer on Friday 24th September 20:26

[Welshbeef]

I’d say one thing you should do to celebrate clearing it is maybe go 3-4 months and properly spend what the mortgage was on fun (holidays days out etc).

[Stu-nph26]

SkinnyPete said:

Welshbeef said:

Fantastic - very well done.

Now it’s time to put more into pensions - and ISAs so that you can drag forward the date when you financially could retire. Financial freedom day.

You're not wrong.

I am very much aboard the 'FIRE' train. I've already increased my pension contributions slightly and my standard monthly repayments which were going to my mortgage provider are now finding their way to Vanguard

Congrats I’m also aiming for fire. All being well I should be able to do it before my 40th. Any idea when you’ll be FI?

[kiethton]

SkinnyPete said:

I’m happy to report that I paid off the last of my mortgage this week. Mortgage-free at 33 definitely has a nice ring to it.

I am absolutely ecstatic, but I think it’ll take a couple of months to fully sink in, when I realise, I don’t have a significant direct debit going out every month.

This isn’t the type of news you can share freely, except for with strangers on the internet, so I’m quietly celebrating on my own tonight with a takeaway and some JD

Edited by SkinnyPete on Friday 24th September 18:41

That's very impressive, well done.

As a counter I'm a year behind you and have just levered myself to the tits and exchanged on a house today...mortgage paid off in 30 years time...

[funinhounslow]

SkinnyPete said:

I’m happy to report that I paid off the last of my mortgage this week. Mortgage-free at 33 definitely has a nice ring to it.

I am absolutely ecstatic, but I think it’ll take a couple of months to fully sink in, when I realise, I don’t have a significant direct debit going out every month.

This isn’t the type of news you can share freely, except for with strangers on the internet, so I’m quietly celebrating on my own tonight with a takeaway and some JD

Edited by SkinnyPete on Friday 24th September 18:41

Congratulations!

I can confirm that it will take months to seek in. And as you say, be careful who you tell...!

I know there is a school of thought that the "better" option is to keep the mortgage and invest but there is a contentment and peace of mind that comes with being mortgage free that you really can't put a price on...

[doogle83]

LeadFarmer said:

SkinnyPete said:

I’m happy to report that I paid off the last of my mortgage this week. Mortgage-free at 33 definitely has a nice ring to it.

I am absolutely ecstatic, but I think it’ll take a couple of months to fully sink in, when I realise, I don’t have a significant direct debit going out every month.

This isn’t the type of news you can share freely, except for with strangers on the internet, so I’m quietly celebrating on my own tonight with a takeaway and some JD

Like you, I managed to pay off my mortgage at age 33 by overpaying. I celebrated like you, then had a long hard think about the life I wanted. We had recently had a baby and the option of living mortgage free with disposable income was appealing, but I didn't like the idea of wasting my money away and wanted to do something financially sensible with it.

So a couple of years later we decided to move to a bigger house, larger garden, near a better school, walking distance to a very nice park - all in all a much nicer place to bring up our child. But this came at the cost of taking out a £140k mortgage. Again we overpaid so it should be paid off by the time I plan to retire. But what then....!

Edited by LeadFarmer on Friday 24th September 20:26

Having also paid off our mortgage by 33 we did exactly the same. Now I've got a £170k mortgage at 38 but I'm very comfortable with not overpaying it at current rates and am tucking the money away into S&S ISAs instead for the time being.

[67Dino]

SkinnyPete said:

I’m happy to report that I paid off the last of my mortgage this week. Mortgage-free at 33 definitely has a nice ring to it.

I am absolutely ecstatic, but I think it’ll take a couple of months to fully sink in, when I realise, I don’t have a significant direct debit going out every month.

This isn’t the type of news you can share freely, except for with strangers on the internet, so I’m quietly celebrating on my own tonight with a takeaway and some JD

Congratulations SkinnyPete, I am full of admiration for your determination and discipline to achieve this aim.

That said, I’ll be honest, personally I find your choice really hard to comprehend. I definitely get the idea of retiring early if what you do for a living isn’t also what you like to do for fun (I’d just end up starting another business, which rather undermines the idea of retirement…).

But what I don’t get is why pay off the mortgage so early in your life? If I were you I’d be looking across at all that cash piling up in investments and just wishing it was doing more for me both financially and in terms of my living space.

Am I right in thinking that for you the experience of debt is a burden, and that the release from it outweighs those benefits? Or is it some other reason? Genuinely curious.

Edited by 67Dino on Saturday 25th September 08:12

[SkinnyPete]

Thanks for the replies and comments all

Chicken Chaser said:

Wow well done. Just out of interest, will your family position change as you get older or is this the forever home?

I’m single, and the house is a three-bed semi, so big enough for a small family. If I ever meet someone I think is the one, I’d be open to buying a house together, but until then, its my forever home.

Stu-nph26 said:

Congrats I’m also aiming for fire. All being well I should be able to do it before my 40th. Any idea when you’ll be FI?

FI before your 40th would be fantastic, so good luck with that.

I’m probably a couple of decades away from true FI. Although my pension is on track, I can’t access it until I’m 58. Then there's the fact I won’t qualify for full NI contributions until I’m 52.

I’m not sure what my target figures are yet, but I’m investing in my S&S ISA to bridge the gap between 52 and 58.

[SkinnyPete]

67Dino said:

Congratulations SkinnyPete, I am full of admiration for your determination and discipline to achieve this aim.

That said, I’ll be honest, personally I find your choice really hard to comprehend. I definitely get the idea of retiring early if what you do for a living isn’t also what you like to do for fun (I’d just end up starting another business, which rather undermines the idea of retirement…).

But what I don’t get is why pay off the mortgage so early in your life? If I were you I’d be looking across at all that cash piling up in investments and just wishing it was doing more for me both financially and in terms of my living space.

Am I right in thinking that for you the experience of debt is a burden, and that the release from it outweighs those benefits? Or is it some other reason? Genuinely curious.

Edited by 67Dino on Saturday 25th September 08:12

Thanks for the comments.

You definitely have a valid point, and I’m not disputing that a investing in a low cost global tracker would probably have put me in a better financial position in terms of NET worth.

Like I think I said earlier on though, this is very much an emotional decision. I felt like the mortgage and the environment around it (interest rates, recessions, fear of job loss etc.) took up space in my head and distracted me from other things.

Investing a random £5k in Crypto is a gamble I can now afford to take, and if it goes to 0 then oh well. Investing £5k in Crypto, for it to go to 0, while I’m still working to pay for a roof over my head would make me like a chump.