Pros & Cons to paying off your mortgage?
cc120
Posts: 121 Forumite
Hi Folks
Can you list the pros and cons to paying off your mortgage, please?
Can you list the pros and cons to paying off your mortgage, please?
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Comments
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Pro: You don't have a mortgage to pay
Con: You do have a mortgage to pay0 -
Anyone to contribute any info, please?0
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Hi, it's difficult to say. One needs all the facts.
The only CON I see is that you loose a relatively cheap loan. That is, if you put the overpayments in some index fund you may make a gain of say 6% per annum meanwhile you gain only say 3% if you overpay the mortgage (assuming mortgage rate is 3%)
I am not self employed, for me their is no gain tax wise keeping the mortgage. I get about 27% back on the interest paid but if I did not have any mortgage then I wouldn't have any interest to pay either.
So even if my tax increases ( thinking marginal rates due to higher net worth). Then all I can say is 100% of nothing is still less than 50% of something
Total mortgage when started £256,809 in May of 2011; 2018 MFW #5
Main mortgage was £214,309; now [STRIKE] £110,716 at Feb 2016 [/STRIKE]; [STRIKE] £63,645 at Feb 2017 [/STRIKE]; [STRIKE]£10,600 at May 2018[/STRIKE]
Original repayment date 2036; Main mortgage free date [STRIKE]July 2021[/STRIKE]; [STRIKE]Dec 2020[/STRIKE]; [STRIKE]January 2019[/STRIKE] June 2018:)0 -
There haven't been any tax differences re mortgages for about 30 years. The differences now are maybe less noticable but much more important & only seem to be noticable when the s*** hits the fan. As in, get made redundant - still have roof over your head so one less worry, get sick - still have roof over your head . This becomes more important of course when the roof over your head is actually roof over the head of your family. This is often why people pay out for life insurance
What I know from personal experience is that the threat of redundancy is a lot less threatening when you own the roof over your head than when you don't. But that is speaking as a single parent & it may well feel different as one of a couple.0 -
We paid our mortgage off a couple of weeks ago - we reduced it to a zero balance but have still left the account open, just in case we need to withdraw funds again in the future (highly unlikely as we avoid any sort of debt as much as we can). Also there's a £149 closure fee which we can avoid for the moment by leaving a zero balance, though obviously we'll have to close it eventually. A great feeling of freedom now we've paid it off, will be lovely this week to not have a large mortgage payment going out of our account which we can put towards savings instead.0
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WorldTraveller wrote: »We paid our mortgage off a couple of weeks ago - we reduced it to a zero balance but have still left the account open, just in case we need to withdraw funds again in the future (highly unlikely as we avoid any sort of debt as much as we can). Also there's a £149 closure fee which we can avoid for the moment by leaving a zero balance, though obviously we'll have to close it eventually. A great feeling of freedom now we've paid it off, will be lovely this week to not have a large mortgage payment going out of our account which we can put towards savings instead.
Well done on paying off your mortgage...you need to post on the mortgage roll of honour (if you have not already done so).0
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