"why i plan NEVER to pay off my mortgage" discussion!

gentlepurr

just been reading this, and thought it would make for interesting discussion on here!

http://www.everyinvestor.co.uk/timArticles/tim_590_94_.asp?no_pop_t=1

i do have my own thoughts, but would be interested in reading everyone elses before i taint your judgement with my own opinions!

gentlepurr xx

elona

There may be some good points made but some people might just blindly go into shares - buy high and sell low - and then have trouble holdinto onto their house.

Look at all these people who took out second mortgages and the like and are now in real trouble.

The advice of saving three months salary as a "cushion" and then starting to pay off your mortgage and still save some money long term in the stock market seems the best solutio to me.

Creditcardkid

In a nutshell it is all down to risk aversion as far as I can see it. I would not risk this myself - goes wrong and you can easily lose your house.

[Deleted User]

3 months income saved? Sounds like an engagement ring to me

mrcow

I'm reading the article and am scoffing at most of what he's written (didn't know I felt that strongly about it lol).

His idea that people who choose to pay off their mortgages early are making emotional and not financial decisions is a pretty sweeping statement.

Quote: "But long-term debt used to build wealth is totally different" Most people can't afford the luxury of being able to take these sort of long term risks. Personally I'll stick to paying my mortgage off 11 years early and saving myself £60k in interest payments thanks.

So far it's served me better than any "investment" I've ever made.

Katinkka

I couldn't read the whole thing but did they take into account the interest you pay over 25 years on the avg mortgage? You don't just make back what extra the house is worth because you have paid thousands of pounds in interest over the years!

mrcow

His argument is that he can earn much more than the 5% interest that he'd pay on a mortgage by investing his money rather than using it to repay his mortgage.

The problem that I have with this is that it involves risk and management (and discipline!).

Personally I think that overpaying a mortgage is a much more practical and hands on approach to making your money work. It's also the only guaranteed way of saving yourself money on your house in the long term.

I've lost money in endowments and PEPs and my parents have lost thousands on shares and pensions over the past ten years. The idea that it would be worth gambling equity in your house on such things seems more than a little rash to me.

But I suppose I'm much more a bird in the hand kind of girl..............

deepseadiver

Ive also had it with shares. Mine are just breaking even after 6 years so Im going to sell them and offset against my mortgage. Mortgage is just a big overdraft - get it paid off then start investing!!!!

Thefunkygibbons

Every investor thinks they can beat the market, it is a fallacy

Surely the endowment problems that affect people prove the point

I keep an investment that is still worth only 70% of the initial investment after 10 years

A permanent reminder that shares can go down as well as up

alanobrien

It's gambling nothing more with no certainty of winning.

Paying off your mortgage early is a certainty, you will save money long term.

That's good enough for me.

roswell

i will stick to paying off my morgage please