Chance to get rid of the mortgage

[egor110]

Our mortgage is 27k svr so no early repayment charges.

I've just been left 25k in a will , would i be mental to anything other than use 2k of my savings and pay off my mortgage ?

We've kind of mulled over turning the conservatory into a orangery so it's useable year round but to be honest i'm not really that fussed and the thought of being 44 with no mortgage is more appealing.

Lastly if we get rid of the mortgage do we still need the same / any life insurance if we have no mortgage.

[egor110]

Thanks for the replies it's all food for thought.

Re the orangery idea , i don't really give a st about it and after talking to the mrs she's more interested in having no mortgage .

Re the 6 months savings , neither of us are in high paid or high risk jobs so i don't see our job situation changing and if it did we could live pretty easily with no mortgage , also don't forget we've been pumping £800 a month on the mortgage so this would now be going in a isa or something else every single month.

Lastly it's been a struggle not to buy a car this morning !

[egor110]

bompey said:

Pay off the mortgage, then whatever the mortgage payment was pay that into your pension as increased contributions. Make sure you do self assessment to claim the additional tax back or do it via your employer.

i'm a postie and currently maxing out the pension , any more i put in won't effect what royal mail add.

[egor110]

mcbook said:

terrydacktal said:

Really? Have you even been on holiday in the last 10 years?

£1,000 - Flights from London to Bali for two people (see skyscanner)
£2,800 - 7 nights in a one bedroom villa with private pool in 5-star Chedi Club Tanah Gajah with private butler included (http://www.ghmhotels.com/en/tanah-gajah/)
£1,200 - spending money

OK, I assumed no kids but none have been mentioned by the OP.

No kids .

Our last big holiday was Maldives 4 years ago think that came in about 5k for the 2 of us A.I for 2 weeks.

[egor110]

superlightr said:

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........

Is this actually true ?

there are loads of posts re the change of the btl tax break ending so think i've missed the boat there.

[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.

[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 ?

[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 .

[egor110]

KTF said:

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 that 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.

Ah right , i'm basic rate so 20% .

[egor110]

Thanks for everyone's advice .

Today i went in and totally paid off the mortgage

[egor110]

djc206 said:

Olivera said:

superlightr said:

Fantastic !!!! whoooooo !!! have a party or nice meal out to celebrate !!

A party to celebrate paying off a mortgage? Sounds like something Alan Partridge would throw

Make it big, you could even remortgage to pay for it

We know how to splash out , we went to our running club then had kfc , living the dream

Immediate plan is just stick the £700 month mortgage money in a regular savings account.

[egor110]

Welshbeef said:

£27,000 mortgage iassumig 7 year remaining term is only £323pcm.
If it's 15years it's £160pcm.

If that's worrying territory I cannot see how it can be unless aside from mortgage your up to your neck in unsecured loans everything on the drip.


Benefit of having zero mortgage + a years net salary in the bank is its a "fk you position". Lose your job / walk out no issue. It gives you utter comfort.
Heck you could live in the house no electric no gas no TV licence no telephone no internet simply pay council tax or if your financially struggling the council wave it.

A question OP how much do you pay currently for Mortgage? £500-600pcm? If so your adding maybe £7k a year to savings/investments from not having to pay into mortgage so 4 years you'll have hat cash again

As it's inheritance though clearing the mortgage might be something you can look back on for life.
Or actually an orangery might be something to constantly remember - though you'd then be tied to the house.

Maybe a £25k DB7
Maybe a £25k Patak or Hublot
Maybe £25k paid into your pension fund you'll instantly get either 20/40/45% added to it.... no benefit until you retire but the idea has to be on the table. Personally I'd not do this with equity at an all time high.

Do you have any other debt? If so pay off the most expensive apr% debt first.

I've paid the mortgage off now , but to answer your questions.

Was over paying by £200 month so £700

No other debt .

[egor110]

Welshbeef said:

egor110 said:

I've paid the mortgage off now , but to answer your questions.

Was over paying by £200 month so £700

No other debt .

So £8.4k per year your cash pot ISA or S&S ISA will now continue to grow.

Think of it another way it's the same value as the state pension. So every year you save (in addition to private pension) your going to have in effect 2x State pension + private pension for retirement --- OR you could retire x years earlier by using this saving to effectively start the state pension sooner.



One note - a friend of mine this sept will clear his mortgage (he is 36) it is a lovely house easily he would never need to move again.
However they have already committed to buy a vastly more expensive house more land bigger pad in a really top end area. Which mortgage wise means he is about to commence a new 25 year mortgage.
I think the idea is Coke retirement age downsize to take the cash out but live in the same area. Leveraging the borrowing for higher tax free capital gains on principle primary residence.
I bet they will never downgrade though.

Still getting my head around not having a mortgage , but the immediate plan is to just keep paying the £700 into multiple tescos savings accounts as you can save £3000 at 5% and can open 3 of the accounts.

Is there any point in cash isa's anymore now you don't get taxed on savings ?

I'm on leave again in august so think we'll go and see the ifa and see what he recommends , trouble is re stocks and shares my attitude is very cautious .