Mortgage Free - Why?

WGG1848

When I first took out a mortgage I was told
'Borrow as much as you can for as long as you can'.
Common sense must apply as in all things, but I started off in 1966, age 22, with my first mortgage of £2,250 and a wage of £16 a week, house worth £2,850.
It seems to me that people can't wait to get on the mortgage ladder and then bust a gut to pay it off as soon as possible.
Why?
As long as you keep within the rules of 'as much as you can' then where's the problem?
Too much is made of paying off the mortgage, always and always keep some money aside.
Just remember 'you can't spend a brick'.
Your house will fluctuate in value whether you owe £1 or £100.
Where's the benefit of living in a mortgage free house and not have a penny to turn too?
At 67 I still have a mortgage.
:j

pjcox2005

Not sure if the question is genuine or not. I haven't yet had a mortgage but I can see the point of overpaying and clearing down fast...the simple main reason being that you'll spend less in your lifetime on interest payable to the bank, so arguably with the same wages you'll have a better standard of living.

Yep, you can't spend a brick but likewise for many that security is quite comforting in old age. I personally wouldn't want to rely on the state to provide for me if i don't need to.

Finally, you still have a mortgage at 67, but there may come a point when a mortgage company won't lend to you when you come to remortgage as you'll only have a pension (potentially) in old age so nothing to service the interest on the debt.

Plans_all_plans

Well I'm a total novice to the notion of overpaying, but I'd like to overpay so as not to give the bank a whole heap of interest! I'd rather we saved the money we'd pay in interest by overpaying the mortgage. By becoming mortgage free earlier on, we could afford to buy a bigger house in a better area with better schools for our child. This wouldn't be possible if we stuck to paying off the minimum amount each month. For me, it's about the lifestyle I aspire to have in future.

It depends whether you're willing to make sacrifices or not though. I'm happy not to go on holiday every year if it means my daughter will get to go to a better school. I'm happy not to go out as often if it means my dream house is possible eventually.

Marksy

My provider won't lend to anyone aged 70 or above, I just asked them today if I wanted to could I increase the term - and was told that, and that I could increase it until I was 70 if I so wanted to.

I agree with you in some terms.. we keep some emergency money (ISAs) back, but over pay what we can, if we can pay it off within x amount of years, then that's x years off my retirement age (so what.. probably 35 years?) of money, if we stay put that would have been going out on a mortgage sitting in the bank.

I don't think you should 'bust a gut' to pay it off if you're going to leave yourself short... as you say - common sense.

Tesco_points_addict

Ermmm.. because I don't want to pay the banks HUGe amounts of interest!

I would say 'Why would you not want to'?

SteveScooby

The sooner you pay it off the sooner you are £500+ a month better off!!

diable

I overpay by about 15% per month so I can shorten the length of the mortgage saving me money that I would have paid in interest. If I then carry on paying the same amount in to a savings account it will mount up to a tidy little sum. The over payment is not missed and once it is out of my bank account its gone and forgotten about but if I put the money away I would be frivolous and waste it.

If you have had mortgages from 1966 then you have been through the periods of high interest rates and think how much money you could have saved if you had over paid your mortgage.

de1amo

with credit terms tightening there is logic in not paying down my mortgage-i can get 4pc before tax on my savings and i pay 2 pc interest on my mortgage-it gives me flexibility for rainy days or purchasing some other asset that turns a profit but my aim in the long term is to clear my mortgage-much as it pains me-i would love to die owing the bank the full amount os!

id like to see a calculator that forcasts the value of my outstanding in 20 odd years time--inflation effected

lincoln-potter

Got to be a joke post......

had you not kept borrowing from the bank, the home would have been yours and you would have had extra spare cash in your pocket each month rather than the banks.....

de1amo

i borrowed the money to buy a second home abroad which has doubled in value--no joking!-i also have bought a lot of gold that has gone up 250pc--mortgage is still smouldering at the same amount with a small repayment

SkintGypsy

If I pay off my mortage before my kids reach 18 then I can afford to help pay for my kids to go to university. At this rate, they'll cost me twice my mortgage. Wish I could put the rolling on the floor with laughter icon, but it's not really very funny.