What to do with the money after Mortgage paid?

sedso

Hi there

I have been reading many stories on this forum about over payments on your mortgage, I have been doing this for a while now and am about 6 months away from being mortgage free.

Maybe this has been asked before but I would be interested to find out what people would do with the extra money from mortgage payments and over payments when they become mortgage free? if you had a DD setup for £250 and paid £500 over payment each month that would leave an extra £750 per month once the mortgage was paid off that you have become used to not needing? Savings, holidays, all the things you have done without when you got into mortgage paying off mode?

S

Dr.Lou

I think our plan is to:

1. Once the mortgage is paid off, treat ourselves for a little while with the extra cash and maybe take a nice holiday. Hopefully this may coincide with my 30th birthday this year so multiple celebrations (fingers crossed)!

2. As we have been saving hard for so long, we have been putting off a few (cosmetic) jobs around the house and garden so plan to do these soon after.

3. We have got into the habit of being frugal for about 5-6 years now, and it's a habit I will probably find hard to break (and I enjoy it secretly), so will probably keep saving, maybe to buy another house outright in the future.

4. Have kids (hopefully) as our finances will be more secure to do this.

It will be wierd when/if we eventually get there. In some ways I am so looking forward to it, in others I will be losing (yet another) sense of purpose.

Good Luck Sedso on the next six months!

in_my_wellies

I have three payments to make, June, July and August, I will thus save £3000 a year. DD starts uni in September.

So I wont see much difference.

shelly

Hubby and I were talking about this today. We could have been mortgage free in November but decided as we could still comfortably afford the basic payment and over payment we bought a nice sports car instead. Now we are going to be mortgage free in May/June next year. When we are mortgage free we have decided to take a nice holiday so we are going back to Mexico and staying in the same hotel as we did for honeymoon then we are seriously thinking about letting out our present house and buying a bit bigger detached property with a bit of land. The rent from our present house and the money we aren't paying on present mortgage will cover a new mortgage on a bigger property. (if that makes sense)

Gray0103

When I get there I will look for a job, where I can go earn enough money and have no responsibility and reduce my stress levels, no point having spare money if I have died of a stress induced heart attack.

Scully's_Girl

Once we paid off our mortgage, we immediately earmarked the money going into that into investments for ourselves. We max out our pensions (we both get good matches from our companies) & put £583.33 each per month into ISA's.
I think the best thing we did was to learn to live on one income. My husband & I both work (as we do not yet have children its the ideal time), & we have bought all our expenses down to one income. Once your mortgage is paid off this is so much easier. We use my income for holidays and our eventual retirement. I would hate for my husband to commute into London in his 40's if we can help it; he's worked too long here. Hence, although we are young we have traveled quite frequently (Austria, Paris, & US last year; Belgium, US & China/Australia this year).
If you've gotten used to being frugal, then enjoy it. Even though we have the money now, I still make us save for everything. We saved for our new car & bought it cash. When we do buy a new house eventually, I'd like to go into it mortgage free, hence I have to save hard for that too, therefore, more cutting back. Once you start seeing your bottom line increasing every month (& it will skyrocket now) you become addicted.

Mrs_Optimist

Hi everyone!

Once our mortgage is paid off - hopefully in 3 years time, we want to remortgage our current home, rent it out and then use the mortgage monies to buy a bigger property for us to move into. We will claim tax relief on the interest of the first mortgage and have a smaller mortgage on a bigger property. then we will concentrate on paying that mortgage off. We want to pay this mortgage off first though since we hope that house prices might stabilize in that time - we live in Devon and house prices are ridiculously high at the moment - you can't even find an ex-council flat for less than 115k, glad we bought when we did 10 years ago. If prices still remain high we will rethink our situation and maybe stay put and save the monies not spent on mortgage payments to fund an extension to make the house bigger.

Only 3 years to go.........

Thefunkygibbons

I have been wondering the same

There is just over 2 years left on the mortgage and then the payments plus bonuses, share save etc will add up to about £40k a year spare

I guess the obvious choice is to buy a house and start again so as to have something for the kids, but with 5 children there is no way that I will be able to get one each

Then there is the fact that on a house, one pays letting fees, and stamp duty when you buy it etc. It is also harder to relaise the value when the time comes

So maybe an index tracker would be a better idea

But then again, when you buy a house you can get better returns because of the leverage effect



So in short, I will be spending the next couple of years deciding what to do with the spare cash

Joscar

After we paid off our mortgage we carried on putting the same amount of money away each month and overtime have used it to by 2 additional houses which we rent out. Long term plan is to have enough income from rented property for OH and I to only need to work part time and still enjoy life without scrimping.

Mrs_Optimist

Joscar that sounds good to me! - only 3 years to go.....

nearlyrich

We paid off the mortgage about 6 years ago, I started to put the same monthly amount into savings accounts and isas etc, the isas are intact and growing now the stock market is recovering but the savings have been rifled to help the kids at uni. Once they finish I am saving to retire early, 50 looks good for me too so just over 5 years to go...:beer: