Becoming mortgage-free efficiently

jamesd

Five years on from starting this it's perhaps worth an update on how I'm doing myself. In December 2015 the 25% tax free lump sum value of my pensions first passed the value of my mortgage and it would now do that even after a 15% drop in value. Still a little while before I can get at pension money but that's OK, I don't intend to pay off the mortgage immediately even when that money is available. I'm well on track for having an effectively free home purchased with tax relief, saved NI and employer contributions.

On the non-pension side, for the last couple of years I've been eliminating most of my remaining income tax bill by buying VCTs that are paying about 10% tax exempt dividends as well. I've been getting more than than 10% in interest after bad debt from peer to peer investing in recent years.

jamesd

25% of my pension money is now about 24% more than my mortgage value and could handle a roughly 20% drop and still cover paying it off.

Total value of all savings and investments including all pension is now about 7.8 times the mortgage value. Smallish mortgage and savings ratio of above 60% of my income for a decade to get me to financial independence then ability and will to retire. Already done the first two of those for retiring in the UK, now mainly about broadening my retirement location options.

jamesd

Now that same 25% of my pension pots total value is 48% more than the mortgage balance. Total investments net of unsecured credit about nine times. With tax relief, NI savings and employer contributions the net cost to me of paying for the place is going to be nil even now, let alone a decade from now when paying it off is due.

jamesd

25% is now 63% more than the mortgage, net total investments 9.7 times the mortgage.