If you came into some money do you pay off your mortgage?
Discussion
if you paid your mortgage off today, what does that change for you? Does it remove a huge burden?
Interest rates are rising, so whilst we are not quite at the point where it is definitely the best thing to overpay/payoff your mortgage due to rate rises, this may be more applicable in the future.
If i were in this situation it could mean two things:
1. Use the money that I now don't pay in to the mortgage to accelerate my building of investments and general savings.
2. I could take a lower paid job, and open my options to exploring other career options where 'keeping a roof over my head for me and my family' isn't my immediate concern.
Bonus: Pay off some of the mortgage, refinance the remaining to a shorter term, and have security that you have a closer end in sight to owning your home and you have cash in the bank for a rainy day.
Interest rates are rising, so whilst we are not quite at the point where it is definitely the best thing to overpay/payoff your mortgage due to rate rises, this may be more applicable in the future.
If i were in this situation it could mean two things:
1. Use the money that I now don't pay in to the mortgage to accelerate my building of investments and general savings.
2. I could take a lower paid job, and open my options to exploring other career options where 'keeping a roof over my head for me and my family' isn't my immediate concern.
Bonus: Pay off some of the mortgage, refinance the remaining to a shorter term, and have security that you have a closer end in sight to owning your home and you have cash in the bank for a rainy day.
Norton850 said:
Yes...
Paid mine off 10 yrs ago,best thing i ever did....
Have not worried about money since..
^^^^^^^^Paid mine off 10 yrs ago,best thing i ever did....
Have not worried about money since..
People talk about the financial aspects of life and using money to do other things.
For me, it was one of the most liberating moments of my life. If I want to spend a year out of my life not pedalling like hell - I can do…
The phone call with the Yorkshire was a classic, while I was at work….
“I’d like to pay my mortgage off please”
Woman at the other end “oh wow, I only do this about twice a year – this seems decades off for us - what an amazing day for you etc…”
The engineering office was in silence, after the phone call it was almost a communal “what a relief - cakes are on you then!”
bucksmanuk said:
Norton850 said:
Yes...
Paid mine off 10 yrs ago,best thing i ever did....
Have not worried about money since..
^^^^^^^^Paid mine off 10 yrs ago,best thing i ever did....
Have not worried about money since..
People talk about the financial aspects of life and using money to do other things.
For me, it was one of the most liberating moments of my life. If I want to spend a year out of my life not pedalling like hell - I can do…
The phone call with the Yorkshire was a classic, while I was at work….
“I’d like to pay my mortgage off please”
Woman at the other end “oh wow, I only do this about twice a year – this seems decades off for us - what an amazing day for you etc…”
The engineering office was in silence, after the phone call it was almost a communal “what a relief - cakes are on you then!”
"Deeds are to be couriered over to you"
I paid mine off when the life insurance paid out last year. I was in two minds because the mortgage didn’t have long to run , the payment was relatively low and I was happy seeing a fairly large sum in my savings. We were 18 years into a 25 year mortgage and I had some left over following the final payment.
But I now have no fear of losing my job, if anything happens to me the kids can stay in the house with no debts. It felt like a massive release and not having £400 go out every month means I get more money for other things at the end of each month. Do it if you can, it feels great to be mid 40s and mortgage free (although the way it happened will be with me for the rest of my life) . It also means I don’t have to join in with the office chat of how a 0.25 interest rise will push people into financial ruin.
My job is fairly stressful. I feel more relaxed should there ever be a reason why I’d like to slow down a bit and maybe do something completely different part time. I now have no fear should the redundancy axe come around again.
But I now have no fear of losing my job, if anything happens to me the kids can stay in the house with no debts. It felt like a massive release and not having £400 go out every month means I get more money for other things at the end of each month. Do it if you can, it feels great to be mid 40s and mortgage free (although the way it happened will be with me for the rest of my life) . It also means I don’t have to join in with the office chat of how a 0.25 interest rise will push people into financial ruin.
My job is fairly stressful. I feel more relaxed should there ever be a reason why I’d like to slow down a bit and maybe do something completely different part time. I now have no fear should the redundancy axe come around again.
Edited by oldaudi on Tuesday 5th July 10:18
A lot of personal finance forums and powerfully built directors like to talk about investing the money and paying off the mortgage slowly to bank the difference.
Whilst that can and should pay off over a long time, you would be pissed off if you started that strategy in January 2022 and lost 10-20% of the money in the markets.
I personally paid mine off and never looked back. Optimising investments can come afterwards but I don’t want to gamble with the roof over my head.
Whilst that can and should pay off over a long time, you would be pissed off if you started that strategy in January 2022 and lost 10-20% of the money in the markets.
I personally paid mine off and never looked back. Optimising investments can come afterwards but I don’t want to gamble with the roof over my head.
Cleared mine over a decade ago, and later, after being made redundant (2009 on recession) and getting a fairly crappy job just to pay the bills, it ultimately allowed me to go self employed and eventually start my own business as I had the reassurance of knowing that, no matter how badly it went, I would always have a roof over my head. Had I had a mortgage, I could never have risked it, I'd have had to make sure I had that salary in my account every month to cover the mortgage payments.
And as above, it's hugely liberating.
And as above, it's hugely liberating.
dmahon said:
A lot of personal finance forums and powerfully built directors like to talk about investing the money and paying off the mortgage slowly to bank the difference.
Whilst that can and should pay off over a long time, you would be pissed off if you started that strategy in January 2022 and lost 10-20% of the money in the markets.
I personally paid mine off and never looked back. Optimising investments can come afterwards but I don’t want to gamble with the roof over my head.
On this point, I think the question to ask yourself is, if you had no mortgage, a small income and little in the way of savings, would you remortgage your house and invest that money? If the answer is 'no', then pay your mortgage off because to not do so and invest is exactly the same. Whilst that can and should pay off over a long time, you would be pissed off if you started that strategy in January 2022 and lost 10-20% of the money in the markets.
I personally paid mine off and never looked back. Optimising investments can come afterwards but I don’t want to gamble with the roof over my head.
It depends (sorry!). Primary thought is affordability, if any risk of losing house deal with that first, whether that be full mortgage payoff or a partial with reduced payments, but in both casings ensuring savings to cover future outgoings in case the worst happened.
If the mortgage was very affordable and no issues I would look at savings as mentioned above (~6-12m outgoings), pension (include looking back over past 4 years unused allowance), ISA, and other future big costs (child education, house repairs, vehicles etc).
In my case it's partial payoff whilst in fixed term to avoid any early repayment charges, going through the savings, pension, ISA steps, then when the mortgage renewal is up I'll look again at affordability over the next 5 years.
It is likely when my child grows up and leaves home that I would downsize and/or move out. On that basis I'll benefit from capital growth regardless and there is limited benefit in fully paying off so long as interest rates/investment growth beats mortgage rates.
My primary financial goal is as large a pension as I can achieve, on the basis I can live off 4% (plus my wife's pensions) and retain the capital until death and then it pass down to my son outside of estate. If I die early they get that free of income tax too.
If the mortgage was very affordable and no issues I would look at savings as mentioned above (~6-12m outgoings), pension (include looking back over past 4 years unused allowance), ISA, and other future big costs (child education, house repairs, vehicles etc).
In my case it's partial payoff whilst in fixed term to avoid any early repayment charges, going through the savings, pension, ISA steps, then when the mortgage renewal is up I'll look again at affordability over the next 5 years.
It is likely when my child grows up and leaves home that I would downsize and/or move out. On that basis I'll benefit from capital growth regardless and there is limited benefit in fully paying off so long as interest rates/investment growth beats mortgage rates.
My primary financial goal is as large a pension as I can achieve, on the basis I can live off 4% (plus my wife's pensions) and retain the capital until death and then it pass down to my son outside of estate. If I die early they get that free of income tax too.
dmahon said:
A lot of personal finance forums and powerfully built directors like to talk about investing the money and paying off the mortgage slowly to bank the difference.
Whilst that can and should pay off over a long time, you would be pissed off if you started that strategy in January 2022 and lost 10-20% of the money in the markets.
I personally paid mine off and never looked back. Optimising investments can come afterwards but I don’t want to [/b]gamble with the roof over my head.[/b]
But it was never more of a gamble than pre-windfall, assuming you originally bought the house expecting to be able to pay it off.Whilst that can and should pay off over a long time, you would be pissed off if you started that strategy in January 2022 and lost 10-20% of the money in the markets.
I personally paid mine off and never looked back. Optimising investments can come afterwards but I don’t want to [/b]gamble with the roof over my head.[/b]
Carlton Banks said:
If you came into some money that enabled you to pay off your mortgage should you or just make a contribution towards it?
Comments welcome !
I'm 100% in the "pay off the mortgage" camp (but then I am very debt- and risk-averse.Comments welcome !
FWIW this is why Offset Mortgages are great. You get the benefit of not paying any interest and also having the cash available if you need to access it for any reason.
oldaudi said:
I paid mine off when the life insurance paid out last year.
Is that good news or bad? Everyone wants to pay off their mortgage, but everyone would rather have a mortgage than to have cleared one this way. As others have said, there's two aspects to it, the financial and the psychological. I've cleared mine off twice (cleared it, and then decided to buy a bigger house a few years later, then ended up clearing that one.) Financially, it might not have been the shrewdest move, but I didn't care.
Carlton Banks said:
If you came into some money that enabled you to pay off your mortgage should you or just make a contribution towards it?
Comments welcome !
Yes, I think I probably would.Comments welcome !
It's not particularly burdensome for me, and I'm not especially interested in what the optimal financial decision would be. Just I can see the appeal of being mortgage free, it's what I'd want to do, so that's what I'd do.
Having just this morning rearranged the rates on our two mortgages and seen in black and white how much more it is going to cost me each month 100%. It has actually been a massive kick up the bum for me and made me realise that I need to start massively overpaying and getting rid of them as soon as I possible can.
So if I came into money it would be the first thing I did. I cannot imagine how free it must feel to know you don't owe anybody in the world a single penny, and that you can pretty much work as little or much as you like now and it is all for you.
So if I came into money it would be the first thing I did. I cannot imagine how free it must feel to know you don't owe anybody in the world a single penny, and that you can pretty much work as little or much as you like now and it is all for you.
Countdown said:
I'm 100% in the "pay off the mortgage" camp (but then I am very debt- and risk-averse.
FWIW this is why Offset Mortgages are great. You get the benefit of not paying any interest and also having the cash available if you need to access it for any reason.
This ^. We had an offset and kept the savings pot and mortgage pot in balance for about 5yrs before we felt it was more stressful to keep moving money out of the savings pot each month (to elsewhere so it didn't automatically pay off the mortgage) that we decided to clear the mortgage outright. FWIW this is why Offset Mortgages are great. You get the benefit of not paying any interest and also having the cash available if you need to access it for any reason.
It felt good. I don't think Santander were too sad to see us go though...
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