Why mortgage free?

ViolaLass

FATBALLZ wrote: »

Good for you. Just because you got £50k of government subsidy that your kids won't get why should you help them out. You deserve better than the next generation. I'm also glad to see that so many of the older generation share your attitude.

My parents didn't have the minimum wage or the same level of job protection. You win some, you lose some (and I'm one of the younger generation).

patrick_bs15

It's a good question.

I just hate the fact that some bank is making money out of me by doing nothing, that's why I overpay mainly.

It's the principle, really.

Plus, I think my earnings potential relative to outgoings is at its peak, so it makes sense (to me at least!) to pay off a lot now.

hugheskevi

I agree that security is very important, but I don't think that paying down a mortgage is necessarily safer than building up assets instead.

If you build up a store of assets, then you can have a very substantial buffer against things such as redundancy and be able to meet mortgage repayments for many months even if you cannot find another job for a long time.

Put the same money into the mortgage, and whilst the outstanding balance will be smaller, your ability to service the debt if income falls is much dimished.

For me, saving is a combination of personal pension, SSISA and mortgage repayments, with money allocated to take best advantage of the various incentives associated with each of these things, whilst ensuring that redundancy, death, sickness, etc, can be catered for.

wymondham

It's all very personal. I wanted to stop having to pay a mortgage and concentrate on my pension - very few people can pay a mortgage AND fund a decent pension in these times....

Sepa74

I think it's part of a balanced investment portfolio. My pension is invested in stocks and shares and putting spare money into my little flat is effectively increasing the deposit I will have available if / when I want to buy somewhere bigger.

As a higher rate tax payer, the 3% I get through my offset is hard to beat, particularly given that it is effectively no risk. I'm the classic time poor professional, and it is literally a waste of money for me to spend hours evaluating other investment options because I could be earning during the time I'm doing the research.

I could be writing an article right now, but everyone needs some R&R, lol!!

Barros

Here's my 2 cents ...

i don't yet have a mortgage I am saving for my first proprety however how nice would it be to get your wage slip and know that you dont have rent/mortgage payment coming out of it straight away?

Utility and council tax and insurance/food etc and the rest - 80-90% is your own? That for me is like WOW - and opens up a whole world of opportunity. Travel, work less, save for early retirement ... what a thought!

Sure , there is enjoying life and its pleasures but I don't want to be a slave to the wage til the governments pensionable age!

teameffort

for me it's about having an achievable goal.. if i put x amount in now i can save x in interest later and i won't even notice the money is gone.

it's quick easy and everyone can grasp it.

it's bound to catch on! MF yes please. _party_

doctor-dee

pawlala wrote: »

Are you saying that property is not an investment?

But you've already secured a hold on the investment and a right to profit from any potential gains regardless of any overpayments you make.

However, I don't regard a primary residence as a true investment. I would not actively buy and sell my family home to make money. This I feel would lead to unhappiness.

doctor-dee

Danni-R wrote: »

For me as a FTB its about seeing the end in site. One day I'd like to have to children and want them to have a better life than I did. If I can shave off 7 to 10 years off my mortgage then I can put them through Uni etc. Its security and knowing that you'll be able to provide for your sprogs.

Also as others have said. Whats the point of amassing lots of savings when you're paying more interest on a debt.

None at all. Only when you can make more from alternative investments, and accept the risk of doing so. My original point was that there have been a lot of easy pickings in the last 2 years while mortgage rates have been so low.

doctor-dee

GEEGEE8 wrote: »

I don't have a mortgage, so my post may not be valid.. I used to be a mortgage advisor though

I really do think that for *some* people, overpaying on the mortgage is a simple way of saving their money. I have no idea how stocks works, shares etc.. I don't want to invest and wouldn't know how to.. but overpaying the mortgage is such a simple way of doing things, especially if you have a family and busy life.. and unlike shares and investments it's very transparent as you can just see your mortgage balance going down year by year.. you can also calculate how much you could save in interest over a certain amount of time which is very attractive to see.

Share, savings etc aren't as exciting and it can be hard for people to work out what they are actually going to gain in the long term. Paying off the mortgage shows an obvious gain, their own home owned outright and the security that brings with it.

Can't wait to get a mortgage one day so I can start overpaying it ! lol

That's a good point, and something which points to the fact that I feel that as a nation we are generally financially illiterate. Savings - deposit based or share based are often liquid, whereas property isn't so. And if you needed to withdraw some of your savings eg. for a family emergency, it may be difficult and costly to capital raise money through your mortgage.