DON'T Pay Your Mortgage Off Early!!!

Sloppy_Saver · 14 February 2007 at 8:17PM

Deleted_User wrote:

I have little knowledge of pensions and find them incredibly boring to talk about. My eyes glaze over if someone tries to explain the intricacies to me - I can't help it!

Exactly like my wife when I'm pillowtalking about pensionsand ISAs. ....erm, That's not you is it Catherine?

Sounds like you've got both mortgage and pensions covered and so you're safe from my ranting. I agree that if you have paid off your mortgage then you can start putting away for your retirement, but only if you stay put in your wholly-owned house and don't get back on that treadmill for another 10 years to pay off the 6 bed mansion you can now afford with such a large deposit....

lynne1307 · 14 February 2007 at 8:45PM

i want to pay off my mortgage then fun a henious lifestyle of drunken debauchery, champagne for breakfast !! yeee haaa

Sloppy_Saver · 14 February 2007 at 8:51PM

lynne1307 wrote:

i want to pay off my mortgage then fun a henious lifestyle of drunken debauchery, champagne for breakfast !! yeee haaa

You can have that now, not when you're too worn out and old from overpaying your mortgage so that drunken debauchery consists of a "glass of sherry and lie down".

Spend, Save and Overpay in equal amounts. You could scrimp for years, stay in every night eating porridge and then when you finally pay off your mortgage, drop dead and have missed your life.

Come on, lets all get pensions. Come to the "Pensions & Annuities" stream, that's where the cool people hang out!

alanobrien · 14 February 2007 at 8:58PM

Sloppy_Saver wrote:

If everyone thinks the mortgage is a milestone, then why not rent and get rid of it completely?

If you're paying £1500 quid a month for your first home, look at rightmove.com and see what sort of palace you can live in (at least Oop Norff where ah live) for that much. Also, if you're paying £1500 a month, most of it will be interest and you're only investing probably 200 quid actually on the mortgage balance.

House prices are going to crash. Lets all rent and ride out the storm!

Depends on personal expectations i guess. Personally i would not rent especially when it costs more than a mortgage - at least it does where i live.

Your right though, sooner or later prices will crash, then rise again then crash again and eventually the world will end. If i could predict when i would be rich

in the mean time best to keep on living.

pantsmachine · 14 February 2007 at 9:00PM

alanobrien wrote:

Well personally i want security for the wife and kids,

I agree with this one and no price can be put on the feeling when the mortgage is a memory.

Sloppy_Saver · 14 February 2007 at 9:07PM

pantsmachine wrote:

alanobrien wrote:

Well personally i want security for the wife and kids,

I agree with this one and no price can be put on the feeling when the mortgage is a memory.

You know, there is such a thing as life insurance. I know, cos I have it on my (beloved) mortgage. If I die, the house is paid, but also (and this is the good bit) my wife gets a widows pension for life as well to pay for the upkeep of the house (this is from my pension. did i mention I had one?). AND before I die, we'll have had holidays and plazma tvs and all the other enjoyable stuff you can afford when not scrimping along to pay off the mortgage. If I die tomorrow my family will be well provided for and the kids won't be saying "Our fondest memory of our dad was when he scrimped that time to over pay the mortgage"....

burnoutbabe · 14 February 2007 at 10:14PM

i have sort of had this dilemna. i COULD pay off the mortgage in 3-5 years IF i didn't go out and i did't throw 1k into my pension each month. But not paying the pension would lose me both the growth AND the employers contribution so it would be daft.

think i'll stick to 8 year plan, 10k a year. (and probably same saved elsewhere) so in fact i'll be debt free but not mortgage free in 5 years or so.

benood · 14 February 2007 at 10:31PM

I agree with SS it's a valid approach for many. The reason to pay into a pension or investment ISAs instead of overpaying on the mortgage is because you believe the effective growth rate of your pension/ISA will be greater than the rate of interest you will pay on your mortgage. Over the last 10 years that has been very true for my portfolio, but it is more risky.

The great thing about overpaying and looking at a mortgage free date approaching is that it must be a great incentive to save. Not so easy to see your pension saving having the same effect.

Each to their own but consider all the options.

Sloppy_Saver · 14 February 2007 at 10:54PM

Holy Cow! I knew I would be vindicated and lauded as one of the great financial advisers of our time, but who knew it would come so soon...

http://money.guardian.co.uk/news_/story/0,,2007748,00.html

I don't like to say "I told you so..."

But I DID!!!

silvercar · 14 February 2007 at 11:06PM

I think of a mortgage like a diet.

Idealy you keep out of debt and your finances stable = your weight low, and eat sensibly.

There are those that are overweight = finaces out of control and in debt.

There are those that are anorexic, size zero and obsessed by everything they eat = these are the people who aim to pay off their mortgage in 2 years, never spend money on themselves, think a coffee at Starbucks is a criminal offence and generally live a miserable life because they are so obsessed.

DON'T Pay Your Mortgage Off Early!!!

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