Should we or shouldn't we?

edited 2 August 2009 at 12:21PM in Mortgage-Free Wannabe
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jennyjellyjennyjelly Forumite
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edited 2 August 2009 at 12:21PM in Mortgage-Free Wannabe
Please can I have any comments on whether we are doing the right thing?

I've just gone through all the finances and at last we have reached the point where our savings outweigh our outstanding mortgage and I'm so excited I can hardly contain myself :j - shout it out - WE CAN PAY OUR MORTGAGE OFF!!!! :T

It's been a long hard journey involving old cars, no holidays, Asda Smart Price and a very hungry mortgage pig, and I'm so glad the time has come to reap the rewards.:beer:

Deep inside me though there is a little cautious worm that I need to silence before doing the deed so I wondered whether anyone can point out any downside of being MF. We only have £6000 left to pay (at 1.39%), and our savings come to £7300. Once we don't have to make mortgage payments any more we are intending to set up a standing order to an isa or regular savings account for just a bit less than our mortgage payments so that things are less tight but we don't just fritter the extra spare money. With one son in uni and another in college planning for uni :eek: we need to save all we can.

More than the financial thing though (it is after all quite a small amount that we owe) we just want to be free of the bank - it's the emotional satisfaction of owning every brick ourselves.

So there's the question - should we or shouldn't we?

(please say yes please say yes please say yes please say yes please say yes please say yes )
Oh dear, here we go again.
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Replies

  • ViolaLassViolaLass Forumite
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    I'd say that you could get a better interest rate on your savings at the moment than you are paying on the mortgage. Also, would there be an early repayment fee?

    On the other hand, if it would make you happy and you feel that your jobs are secure (at least for the next few months while you re-build your savings) then peace of mind is worth a lot too...
  • jennyjellyjennyjelly Forumite
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    ViolaLass you have just said exactly what I'm thinking - sometimes peace of mind is worth more than money and I just feel that with interest rates so low the benefit of leaving it in savings would amount to a few pounds on such a small amount. (I was shocked to see that my Tesco Instant Access account is something like 0.25% now - I wonder why we haven't left anything in it?!)

    So I think your comment has made my mind up for me.

    Thank you for not bursting my balloon!
    Oh dear, here we go again.
  • dreamyddreamyd Forumite
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    I guess it all boils down as to how secure your jobs are. I work in the public sector, but DH doesn't, and his company have been making noises about downsizing. We could live off my money OK, but we're ramping up the savings just in case, so that we have the option of knocking another chunk off the mortgage at the end of the year. We always aim to have about 6 months of rainy day money, although it 's all in the offset savings, with a view to opening ISAs if we see a rate that works out to be worth more than what we're saving in mortagage interset. So far, we haven't.
    Surviving the ups and downs of life with DH and the Garden Tiger
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  • jennyjellyjennyjelly Forumite
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    Dreamyd I think you are right about the job security. I work in the public sector and DH has been a mechanic with the same car dealership for over 20 years, so I guess you could say that if there really is such a thing as security these days we do have it.

    I've made my decision now based on the things you and ViolaLass said (basically what I wanted to hear!) and this afternoon I've moved the necessary money into our current account ready to pay over the phone. By the end of this week we will be mortgage free.

    Dreamyd, you are doing the right thing with offset but looking for a better deal all the time. We did pretty much the same but always kept enough available to see us through 3 months of adversity (your 6 months if probably far more sensible though). Keep plugging away.

    I know it sounds like a drop in the ocean, but we found our mortgage pig a huge psychological help as he was always there reminding us to be careful of how much we spent on unnecessary luxuries. We got to the point where we would RATHERR feed the pig than buy a takeaway!

    Thaks for the comments and good luck with the MF quest!
    Oh dear, here we go again.
  • ClootiesMumClootiesMum Forumite
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    :T:TWell done you :T:T

    And tomorrow's phone call will be wonderful - I can only dream of this at the moment, but we will get there.

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  • I wonder if you will get the same response a friend got when the other person on the phone asked them "Why would you want to pay it off early if you still have so many years left?" *sigh*.
    "Click the pennies. Collect the pounds."
  • edited 2 August 2009 at 6:46PM
    Mortgage_Reduction_NoviceMortgage_Reduction_Novice Forumite
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    edited 2 August 2009 at 6:46PM
    As above, job security is an important factor. Recommendations for safety savings (in case of emergency not just unemployment but say injury/poor health so you can't work or something expensive breaks in your house, law suit etc.) vary between 3 and 6 months income/wages. If it were me, I'd leave about 4 month emergency money in savings and use the rest to make a considerable overpayment, then save again for the final part. Remember you can't get back what you pay off mortgage but you can use it if you need to when it's in savings.
    MFW: Nov 2008 £156k, Jun 2015 £129k, Jun 2017 £114k.
  • How exciting!!!! Go, Go, Go! x
    MFW: July '08 - 190000
    June '09 - 181957.03
    1000 in 100 days - 679.13
  • jennyjellyjennyjelly Forumite
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    Yep, definitely doing it. Can't wait to make the call - it's on a par with planning the announcement that you are pregnant or getting married or something.

    We have about 3 months emergency money left (we wouldn't be rash enough to go below that) and the savings will soon build up again.

    It finally feels like all the struggling and doing without have been worth it. I'm so happy I'm sitting at my desk at work grinning; everyone thinks I've gone a bit barmy.

    Keep going everyone, don't give in, it's the most wonderful feeling in the world to be only a couple of days away from owing your house outright.

    I've just read this post back and I do sound a bit smug and crowing - sorry, I really don't mean to, I'm just so HAPPY!!!!
    Oh dear, here we go again.
  • jennyjelly wrote: »
    Yep, definitely doing it. Can't wait to make the call - it's on a par with planning the announcement that you are pregnant or getting married or something.

    We have about 3 months emergency money left (we wouldn't be rash enough to go below that) and the savings will soon build up again.

    It finally feels like all the struggling and doing without have been worth it. I'm so happy I'm sitting at my desk at work grinning; everyone thinks I've gone a bit barmy.

    Keep going everyone, don't give in, it's the most wonderful feeling in the world to be only a couple of days away from owing your house outright.

    I've just read this post back and I do sound a bit smug and crowing - sorry, I really don't mean to, I'm just so HAPPY!!!!

    Good job :)
    Mortgage started May 08 @ £144,499 for 35 yrs:eek: Must get mortgage sub £100k by xmas 2011

    Current balance/total OPs/total interest saved/months saved
    £111,000.00/£27,336.40/£96,025.57/156
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