Chance to get rid of the mortgage

[Wacky Racer]

This kind of thread is a regular on PH every few months.

Pay off the mortgage.

It's a great feeling having that letter drop through the door.....Balance £0.00

[Yipper]

superlightr said:

Yipper said:

The road to wealth is paying off the mortgage.

the road to real wealth is having someone else pay the mortgage!! ie a rental property.

depends on the area you could use the £25 as a deposit and get the rest as a BTL mortgage with the term matching the rental income so its close to a £0 input from you........

If the "road to real wealth" were rental property, Britain would be the richest country on Earth... Instead, Britain is the poorest country in Northern Europe...In reality, most residential rentals today lose money or breakeven (due to high costs) and most are just vanity purchases to give the owner-landlord a power kick.

[drainbrain]

Yipper said:

If the "road to real wealth" were rental property, Britain would be the richest country on Earth... Instead, Britain is the poorest country in Northern Europe...In reality, most residential rentals today lose money or breakeven (due to high costs) and most are just vanity purchases to give the owner-landlord a power kick.

Mate I've been trying to convince HMRC of exactly this for more than 4 decades! They just won't listen! Is there any chance you could give me a tip on how to persuade them it's true?

Edited by drainbrain on Thursday 6th July 18:28

[FredClogs]

Can't believe no one's suggested buying a decent Porshe 996.... Put whatever is left in an risky portfolio s&s ISA and hope it grows enough to cover the insurance and road tax. Over the next 3 years more than likely to appreciate more than the SVR mortgage, if you ask me, which you sort of did.

[Robertj21a]

Pay off the mortgage - DEFINITELY

It's an enormous worry off your mind to know that, whatever else may happen, you have your own roof over your head.

[anonymous-user]

drainbrain said:

Yipper said:

If the "road to real wealth" were rental property, Britain would be the richest country on Earth... Instead, Britain is the poorest country in Northern Europe...In reality, most residential rentals today lose money or breakeven (due to high costs) and most are just vanity purchases to give the owner-landlord a power kick.

Mate I've been trying to convince HMRC of exactly this for more than 4 decades! They just won't listen! Is there any chance you could give me a tip on how to persuade them it's true?

[DonkeyApple]

If you have no kids then you need far less cash buffer. If you have no plans for kids then likewise.

If you and you're wife are maxing pension contributions then there is no upside to using the money to boost that and claim all your income tax back.

If you have disposable income each month after currently making £800 mortgage contributions then you almost certainly have nice enough holidays when you want them.

If you've both got to this stage of a small mortgage at a young age then you aren't the sort of people who get any real pleasure from spending money.

Given your situation then on the assumption that you have some cash savings just to cover you both for any weird events that can sometimes come out of the blue (remember owning 100% of your home isn't good if you suddenly need some cash as lenders tend to take time and offer poor deals etc) then it seems pretty logical to simply pay off the mortgage.

With your excess £800/month going forward then save the bulk but instead of buying a car why not use part of the income to rent a few different cars and have a bit of fun experiencing a range of cars?

[superlightr]

Yipper said:

superlightr said:

Yipper said:

The road to wealth is paying off the mortgage.

the road to real wealth is having someone else pay the mortgage!! ie a rental property.

depends on the area you could use the £25 as a deposit and get the rest as a BTL mortgage with the term matching the rental income so its close to a £0 input from you........

If the "road to real wealth" were rental property, Britain would be the richest country on Earth... Instead, Britain is the poorest country in Northern Europe...In reality, most residential rentals today lose money or breakeven (due to high costs) and most are just vanity purchases to give the owner-landlord a power kick.

Most lose money or break even????!! really ive ben doing this for 20 years and that isn't true. I also run a business where all we do is let houses - 300 odd a year. I have a few myself and all have been the best investment I have ever made. From my own experience I would disagree strongly with your view. If you buy in a good area the income and letability is safe and high.

[egor110]

superlightr said:

Yipper said:

superlightr said:

Yipper said:

The road to wealth is paying off the mortgage.

the road to real wealth is having someone else pay the mortgage!! ie a rental property.

depends on the area you could use the £25 as a deposit and get the rest as a BTL mortgage with the term matching the rental income so its close to a £0 input from you........

If the "road to real wealth" were rental property, Britain would be the richest country on Earth... Instead, Britain is the poorest country in Northern Europe...In reality, most residential rentals today lose money or breakeven (due to high costs) and most are just vanity purchases to give the owner-landlord a power kick.

Most lose money or break even????!! really ive ben doing this for 20 years and that isn't true. I also run a business where all we do is let houses - 300 odd a year. I have a few myself and all have been the best investment I have ever made. From my own experience I would disagree strongly with your view. If you buy in a good area the income and letability is safe and high.

The thing is i bet a small term potential landlord isn't going to have the buying influence you'd have .

The estate agents i know are very chummy with a lot of the big landlords so offers get made on value btl's before they've even got on the market for the likes of me to have a punt on.

[Douglas Quaid]

My mortgage is also 800 a month. I'd love to pay my mortgage off and have that extra money, I'm overpaying to get there one day.
I'd pay it off OP.

[egor110]

One last question -

so when i have the money in my bank do i then just wander to nationwide say i want to pay 27k into my mortgage then just hand over my bank card ?

when i've paid it off do they send me the deeds or some sort of proof the house is now mine and not the building society's ?

[red_slr]

I would probably ring the mortgage centre. You will need a settlement figure etc.

In terms of deeds, depending when the transaction was done there may not be any.

[terrydacktal]

Yipper said:

If the "road to real wealth" were rental property, Britain would be the richest country on Earth... Instead, Britain is the poorest country in Northern Europe...In reality, most residential rentals today lose money or breakeven (due to high costs) and most are just vanity purchases to give the owner-landlord a power kick.

You're still banging that drum huh? You might be right that some properties are like that but there are a lot of excellent returns to be had if you're sensible.

[TooMany2cvs]

egor110 said:

when i've paid it off do they send me the deeds or some sort of proof the house is now mine and not the building society's ?

Deeds are no more than of historical interest, unless you took the mortgage out in the early 90s or before...

It's registered at the Land Registry - that's the primary record of ownership (actual legal ownership, not like DVLA - it's one of the very few things we have where actual legal ownership is recorded centrally). The LR record also has a charge lodged against it by the lender, which basically says "Can't change the ownership without our permission". They remove that once you pay the mortgage off.

[rgv250ads]

egor110 said:

One last question -

1) so when i have the money in my bank do i then just wander to nationwide say i want to pay 27k into my mortgage then just hand over my bank card ?

2) when i've paid it off do they send me the deeds or some sort of proof the house is now mine and not the building society's ?

We paid ours off this year feels sooooo good. Dedicated 4 years to it (had about 11 years left before we got serious about finishing it), made overpayments within limits, then lump sums when the product moved out of a fixed fee with no overpayment penalties. The sense of freedom and security is very good. We have a baby so even more so. I've found even when work stuff gets stressy now i'm very "puh, meh, eves!!" (obviously not outwardly to employer!) because I know we don't need the employment and wage to survive. you can't put a price on that sort of comfort.
In response:
Point 1. Surprisingly easy. We just did a internet banking transfer for the balance when we asked for a redemption figure. you then wire this via internet banking like you would a person. astonishgly easy. I sort of would have liked to hand them over a massive comic relief style cheque in the local branch but no. really is fan-fare free.
point2. Per above posts. again surprisingly hassle free/easy. Land registry send a simple letter to you with a reference number on it. should you ever sell up then give this to your conveyancer. Really is simple. in the old days you got a load of documents you had to store properly via a solicitor or what not. not the case now.

Good luck in whatever you decide. For reference we are 38 & 37 and also fortunate to be in the forever home. Bliss doesn't cover it!

And before someone says oh you saddo should have got a V8 and keep a mortgage "too young to be frugal blah blah". Said V8 is tucked up in the garage on a C-TEK and its not on finance. Yeah, life's fking good.
Get rid of your mortgage ASAP but it is wholly personal and needs to be realistic. I wouldn't recommend a beans on toast existence to get there. Your position of a lump sum is great. you never had 25k so you wont miss what you didn't have. The cars and goodies will come on the uplifted disposable income.

Edited by rgv250ads on Friday 7th July 11:28

Edited by rgv250ads on Friday 7th July 11:31

[KTF]

What is the SVR rate you are currently paying and what tax band do you come under?

[egor110]

KTF said:

What is the SVR rate you are currently paying and what tax band do you come under?

2.25% nationwide's svr

what difference does the tax band make ? surely say band c here in this area of Somerset is going to vary compared to band c elsewhere .

[TooMany2cvs]

egor110 said:

what difference does the tax band make ?

ITHM income tax band - because if you invest the money, you pay tax on the interest from it.

So if you pay 20%, you'd need to get 2.8% to "break even" by investing rather than paying the mortgage off, but if you're into 40%, you'd need to get 3.75%. If you're way up in 45%, then 4.1%

[Phil.]

egor110 said:

One last question -

so when i have the money in my bank do i then just wander to nationwide say i want to pay 27k into my mortgage then just hand over my bank card ?

Call them and pay it off over the phone quoting your bank card. That's what I did with the NW. They even congratulated me for paying it off which was a nice gesture.

[KTF]

egor110 said:

KTF said:

What is the SVR rate you are currently paying and what tax band do you come under?

2.25% nationwide's svr

what difference does the tax band make ? surely say band c here in this area of Somerset is going to vary compared to band c elsewhere .

As TooMany2cvs said, the tax band was to see what you would have to return from an investment rather than paying it off. I wasn't referring to your council tax band

For me I would stash it in the various high interest current accounts at 3%+ (if you want no risk) first then see what was left over.

£25k is a lot to pay and get nothing visible in return (if you see what I mean). If the mortgage was less then it would make more sense but I would investigate what you could do with the £25k first.

My brothers wife had a similar windfall but decided to pay off her student loan rather than take it off their mortgage (which would have made a big difference with their young family) even through she wasn't working at the time so was making no repayments towards it anyway. Madness...

I was on a tracker that allowed unlimited overpayments so I doubled the payment each month and stashed the rest to offset the interest until it was paid off. That way I was reducing the mortgage but still had something to fall back on as a backup.

Its amazing how little you need to cover the bills once the mortgage has gone. After that you then have to worry what you do with all the cash thats increasing each month.

Edited by KTF on Friday 7th July 16:08