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  • FIRST POST
    • Tantalus86
    • By Tantalus86 6th Oct 16, 12:40 PM
    • 37Posts
    • 71Thanks
    Tantalus86
    Why do you people bother?
    • #1
    • 6th Oct 16, 12:40 PM
    Why do you people bother? 6th Oct 16 at 12:40 PM
    I've been pondering this for a little while now - why do people want to pay off their mortgage asap?





    Obviously this is a very open question, and I'm just interesting in gathering people's opinions. First of all, yes of course there are massive benefits to being debt free – who wouldn’t want to get rid of it all. It would be lovely to not have to hand over a large chunk of your income every month to the bank and spend it on far more enjoyable things, all whilst enjoying having the peace of mind that knowing no matter what happens you know you’ll have somewhere to live for the rest of your lives.





    But from a purely financial point of view though, why bother? With mortgage interest rates so low nowadays, you’d gain more interest from putting any extra cash in a high interest account then you’d save by overpaying the mortgage. Obviously this depends on everyone’s circumstances, but if your LTV is below 70-80% then available mortgage rates will be low. Again, people’s circumstances and available mortgage products differ so for some it makes financial sense but I’d imagine for a lot of people there’s money to be made. I suppose considerations that mortgages are long term products whereas the current financial situation is short term might play a part?





    So what are people’s motivation? Is being debt free a bit sooner and having that peace of mind more important than gaining financially?

    MoneySavingExpert Insert

    Great discussion Tantalus86! Anyone joining in might also like to see these..

    Mortgage Free Wannabe board

    Should I Overpay my Mortgage?

    Mortgage Overpayment Calculator

    Last edited by MSE Andrea; 07-10-2016 at 12:58 PM.
Page 3
    • HornetSaver
    • By HornetSaver 8th Oct 16, 3:52 PM
    • 817 Posts
    • 1,164 Thanks
    HornetSaver
    Don't worry about investment crashes, they always come back, and if you held shares from 1929 you'd be doing extremely well now, just don't rely on the present value or need to withdraw them at will, like you wouldn't rely on the continuous ability to sell a house
    Originally posted by MatthewAinsworth
    You wouldn't?

    I'm not saying they're liquid transactions, but if you buy at anything other than the absolute peak it's normally a safe bet that you can recoup your capital and then some.
    I'm standing by my pre-referendum prediction: "Brexit will lead to a recession"

    forums.moneysavingexpert.com/showthread.php?p=70662330
    • amateur house
    • By amateur house 8th Oct 16, 4:03 PM
    • 76 Posts
    • 66 Thanks
    amateur house
    I am moving house and taking on a mortgage that will finish when I am 67. I chose this term to give me the lowest payments possible, but plan to overpay so that it will be paid off by the time I am 65 (sooner if I get a pay rise).

    My reasons are that it's impossible to predict what our health will be like as we get older, and I would like to be financially secure enough to reduce my working hours before I am 67. If I could find a high paying savings account then I would consider saving the money instead, but other than a few accounts that let you save a limited amount there don't seem to be many of those around.
    • sunnyflower
    • By sunnyflower 8th Oct 16, 7:01 PM
    • 271 Posts
    • 125 Thanks
    sunnyflower
    I took early retirement last year, and used some of my lump sum to pay off the mortgage and credit card. I'm still working but the pressure is off, we don't owe anything to anyone and have been able to save whilst having more money for things such as holidays, and things for the house.
    After years of being skint ( as many people are when raising a family!) it's a nice feeling.
    • MatthewAinsworth
    • By MatthewAinsworth 8th Oct 16, 7:53 PM
    • 2,243 Posts
    • 908 Thanks
    MatthewAinsworth
    .You wouldn't?

    I'm not saying they're liquid transactions, but if you buy at anything other than the absolute peak it's normally a safe bet that you can recoup your capital and then some.
    Within the scope of what you said I would and the same is true of shares, but people sometimes treat shares in too much of a short term way because of their liquidity, and are therefore much more exposed to volatility and commission than they otherwise would be
    • adam81
    • By adam81 8th Oct 16, 8:34 PM
    • 174 Posts
    • 46 Thanks
    adam81
    I don't get it really.. I'm simply aiming for mortgage neutrality. I got pretty much as much as I can earning averge 3.7% the rest goes to s&s. My mortgage isn't super low at 1.74%

    Seems from reading some posts people don't understand the term and amounts are irrelevant as opposed to rates
    Last edited by adam81; 08-10-2016 at 8:40 PM.
    • TighterThanTwoCoatsOfPain
    • By TighterThanTwoCoatsOfPain 9th Oct 16, 8:58 AM
    • 840 Posts
    • 439 Thanks
    TighterThanTwoCoatsOfPain
    This just demonstrates how relatively you joined th mortgage world (I'm guessing).

    I've been mortgage free on a 350k home for 2 years now and if your name is anything to go by I'm just 1 year older than you. I've only achieved it through overpaying and exploiting 0% credit cards. Having 60k on cards between the wife and I seems nuts looking back but with rates at what they were it was worth it as were both disciplined.

    The early struggles when houses were 'cheap' with a 5 year fix st 7.5% being the norm were very real to me.

    We've considered buying more property whilst rates are crazy low (i.e. Anything under 4%) but we've decided to just enjoy ourselves instead and pensions.

    I wonder if the rates we see now are the new norm but it's not a gamble I'm prepared to take.
    • Choppit
    • By Choppit 9th Oct 16, 10:41 AM
    • 9 Posts
    • 3 Thanks
    Choppit
    Paid off my mortgage 12 years early at 41 due to a combination of health concerns, higher than expected disposable income and RSU vestings. With the benefit of hindsight I should have kept the mortgage because the stock value has rocketed since, but could have gone the other way.
    • adam81
    • By adam81 9th Oct 16, 12:15 PM
    • 174 Posts
    • 46 Thanks
    adam81
    This just demonstrates how relatively you joined th mortgage world (I'm guessing).

    I've been mortgage free on a 350k home for 2 years now and if your name is anything to go by I'm just 1 year older than you. I've only achieved it through overpaying and exploiting 0% credit cards. Having 60k on cards between the wife and I seems nuts looking back but with rates at what they were it was worth it as were both ....
    Originally posted by TighterThanTwoCoatsOfPain

    Didn't get our current home until 5 years but did have others prior to that. Do have a BTL thou for the same reasons you are considering. With that equity we could be mortgage free easily, but don't count that against my neutrality figure.

    The 0% credit card game is a risk I'm not prepared to take with 3 kids, although I do see this as free money. But yeah today's rates are not as apealing for low risk exploiting like that.
    Last edited by adam81; 09-10-2016 at 12:19 PM.
    • theoretica
    • By theoretica 9th Oct 16, 5:31 PM
    • 4,483 Posts
    • 5,645 Thanks
    theoretica
    I agree with the OP that paying off the mortgage might not be the financially most sensible move. For me, my aim was to be mortgage neutral which I have now achieved - I could use savings and investments to pay off my mortgage immediately if I wanted. I also have a fully flexible mortgage so could take out the overpayments I have made so far. Now it is down at 1.24% interest charged I am considering doing just that.

    I really like having all the flexibility and options in my hands.
    But a banker, engaged at enormous expense,
    Had the whole of their cash in his care.
    Lewis Carroll
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