DON'T Pay Your Mortgage Off Early!!!

comping_cat

Sloppy_Saver wrote:

Have I been impolite?

I think a lot of what you are saying has been very agressive, and a lot of put downs to the people who want to be mortgage free - like ive said, the people on this board are here because they want to be mortgage free, you dont, which is fine and your choice, but why you feel that you have to be pushing your message on to us so strongly i think is wrong. There are other boards where your message would be a lot more welcome.
In answer to your question, yes, i feel that you have been impolite.

Quote:
Originally Posted by catowen
You are also assuming that everyone will make pension age!!!!


Not this old chestnut again! Statistically we are all living longer. Fact. That's why the government can't afford to keep us all in retirement with the state pension. Hence, you should provide for yourself.

What if halfway through scrimping and saving and doing without to pay off your mortgage, you get trampled by an escaped elephant. What a miserable last few years you had on this earth (two can play at that game, missy!!)

Quote:
Originally Posted by catowen
Once i have put money into a pension, i cannot get it back, however, all my overpayments can be borrowed back if i need it (within 48 hours) so i have access to money if i needed it, also, once that debt has gone, i will have freed up all that money to do other things with, like some people have said, pay more into a pension, holidays, reducing hours at work etc.



A Retirement fund need not have to be a traditional pension that locks away your cash, it can be a combination of ISA, Stocks, yada yada yada (does no one read the previous posts??!!)

Quote:
Originally Posted by catowen
What if, you plow all your money into a pension, and then find you only live to 60? You will have scrimped for all your life for a future that doesnt happen.
Im a very big believer in living for today, but planning for tomorrow as well - thats why i spend some, save some (which is overpaying my mortgage) and thinking ahead (my pension that i have now).


Hold on, how did you turn it around so that I'm the one scrimping and you're the one with the balanced approach to investing (spending some, saving some and investing in a pension). You're doing exactly what I have advised throughout this entire rant.. erm.. discussion thread...

What you're not doing Mrs. "Live Life for Today", is living life for tomorrow by scrimping to pay off a mortgage to the exclusion of everything else. Well done, you have joined me and the other guys on the dark side. Now leave this place and go to the "Saving and Investments" or "Pensions and Annuities" threads where you belong!

Not exactly the most polite of replies, oh, and by the way, if i did get 'trampled on by an elephant missy' last year i took my children to Florida, so i havnt had a miserable time on this earth. You do not know how any of us mortgage free wannabees are living, spending our money or anything - and even if some of us/all of us are scrimping to pay off our mortgage, then that is our right, just as its your right to do whatever you are doing.

Sloppy_Saver

Bestthingsinlifearefree wrote:

...........and because I'm an all round good bloke.

I have even given you a bit of advice on your other thread Sloppy Saver;) :beer:


http://forums.moneysavingexpert.com/showthread.html?p=4350201#post4350201

what great advise! I'll act upon it immediately! NOT!

Sloppy_Saver

catowen wrote:

I think a lot of what you are saying has been very agressive, and a lot of put downs to the people who want to be mortgage free - like ive said, the people on this board are here because they want to be mortgage free, you dont, which is fine and your choice, but why you feel that you have to be pushing your message on to us so strongly i think is wrong. There are other boards where your message would be a lot more welcome.
In answer to your question, yes, i feel that you have been impolite.


Not exactly the most polite of replies, oh, and by the way, if i did get 'trampled on by an elephant missy' last year i took my children to Florida, so i havnt had a miserable time on this earth. You do not know how any of us mortgage free wannabees are living, spending our money or anything - and even if some of us/all of us are scrimping to pay off our mortgage, then that is our right, just as its your right to do whatever you are doing.

Tsk, that's not being impolite, it's just good natured banter like I'm currently having with Besty! As I said in an earlie post, finance is boring, so a few "Missy's" and "Mrs. Live for Today's" thrown in are all part of the fun.

Sorry if I offended you... Missy.

WISHIWASRICH_2

I think the difference between "US" and "You" - and it is US and You because we want to be mortgage Free and you don't - is our attitudes to risk and the belief in whether we can make more money than our mortgage is costing us. You believe that you can make more than the mortgage interest rate in your "managed funds" "pension pot" or whatever and you believe you will get your money invested back with a good return (that presumably was more than the interest rate.) Us mortgage free wannabes either don't believe we can achieve those rates of return or don't want to take those risks. We want to play safe...why does that bother you? If your risks pay off - then good for you - but we'd rather not take those risks. There are those that argue that we should borrow as much as possible and take only interest only mortgages and that way we'd make as much a possible on the value of our property......but it carries risk. There are people like yourself who believe they can spread thier risk, then there are people who want to be mortgage free and we just see things differently....and of course in the end we maybe right;)

Sloppy_Saver

I don't know anyone who doesn't want to be mortgage free. Including me. If you asked 10,000 mortgage payers if they would like to be without their mortgage, do you think any would say no? Me neither.

I think the discussion has run its course and hopefully there is enough information in here for people to make an informed decision on whether they should plough all their money into their mortgage or whether they should just plough some into their mortgage, put some into savings for the short term and some into investments for the long term. Thanks to everyone who contributed.

One last thought...

The fear of financial problems that occur when you are young and healthy (and therefore more able to do something about it) should be far less than the fear of financial problems when you are old and frail (and therefore unable to do anything about it).

In other words...

I don't fear redundancy enough to strive to pay off my mortgage in a manic fashion, because I know I'll be able to make ends meet somehow - even if it means working 14 hour shifts picking vegetables. I do fear poverty in old age, because by the time I'm old, and in poverty, there won't be a damned thing I can do about it.

Or in other, other words...

I have 44 working years to save up enough money to last me for anything upto 30 retirement years. Do I think I can afford to lose 10 of those investment years exclusively paying off a mortgage that will be paid off eventually anyway? I don't. Do you?

CVID

This discussion, when all else is stripped away, revolves around age and income.

If you have enough years and earnings growth left in you to be able to think that your mortgage repayments are going to look pretty puny in X years' time, then I can understand the contentment to continue paying.

If, on the other hand, you can see the time rapidly approaching when you're going to want to retire and take the (normally) associated income hit, then it's equally understandable to want to get rid of that encumbrance before rather than after.

nearlyrich

When we bought this house with a 95% mortgage it was just over 10 years to go till my DH retired (on a decent final salary pension I might add) we made a concious decision to be mortgage free by the time he stopped working, As it happens we discovered the joys of shopping arouund and remortgaging frequently and overpaying when the rate dropped (from15% to around 7%).We managed to shave an extra 3 years off the term without missing out on holidays and other good things, in fact we spent more then than we do now on food, clothes etc, I also contributed to a pension, we both invested in shares and Peps, Tessas and ISAs.

I suppose what I am trying to say is not everyone who is MFW is doing it to the exclusion of everything else and I have to say the one thing that gives me massive peace of mind is knowing that this place is ours and no-one can take it away.

Each to there own, be nice to all moneysavers and if anyone doesn't want to be mortgage free for whatever reason there are plenty of other boards to post on;)

Kaz2904

Sloppy_Saver wrote:

I have 44 working years to save up enough money to last me for anything upto 30 retirement years. Do I think I can afford to lose 10 of those investment years exclusively paying off a mortgage that will be paid off eventually anyway? I don't. Do you?

How old are you? You've had a pension since 2001 so must be at least 24 so you intend to work at least until you are 68 and die by the time you are 98?
Does this mean that you are going to run your mortgage for another 44 years?

Sloppy_Saver

Kaz2904 wrote:

How old are you? You've had a pension since 2001 so must be at least 24 so you intend to work at least until you are 68 and die by the time you are 98?
Does this mean that you are going to run your mortgage for another 44 years?

I had actually "signed off" as I felt the discussion wasn't going anywhere, but will answer specifics like this - though I'm not too sure why you're interested...

I actually started a pension in '93 in my first job after leaving uni. I left after less than 2 years and stupidly (grrr) took the option of cashing it in. I didn't have much cash and it was so tempting. However, I lost my employers contributions (which were 1.5 times mine), all the tax consessions and 10 years (so far) of compound interest. In other words I lost many times more than I gained and have been kicking myself ever since. I don't even remember what I spent the money on.

I then started another pension with my next company in 1995 stayed here for 2.5 years (and so couldn't cash it in, thank god) before moving onto my third company. I again started a pension with them and transfered my cash into their pension. I stayed 5 years and moved on again (in 2001) and transferred my pension again to my new company scheme. This is why I said on the "Pensions & Annuities" board that my pension started in 2001. This is the pension pot that is now worth around 60k (I haven't checked this in ages, so it may be more). When I left that company I left the pension there because my new company's pension had opted into S2P and wouldn't accept the Protected right in my pot.

I stayed at that company for less than 2 years, built up a pension pot of 12.5k and now I'm in the process of combining both pots into a SIPPS.

There! You did ask!

This was really my point in whole discussion. I only put bits of money away, and didn't miss it really. My employer put some in (which was nice of them) and the tax man made up the rest. I'm now 38, have been "pensioning" for just over 11 years, and have a pension pot of about 72.5k. I have another 22 years to go (I want to retire at 60, not 65/66 as the government would like) and I'm hoping that the pot will be about 500k (with additional contributions and compounding).

When I said 44 years in my previous post, I used the number of years you currently have to pay NI to qualify for a full state pension. To build my pension I only had/have 33 years (or 38 if I carry on to 65) - can I afford to take 10 years out to concentrate on my mortgage? Nope.

Sloppy_Saver

I'd also like to point out that during the 11 years of contributing small amounts into a pension I also had property that "tripled" in value like everyone else's. I have a repayment mortgage and so the debt reduces every month. I have also put bits of money into ISA's and into my mortgage offset account. The remainder of my money I use for fun. I don't need to blitzkrieg any part of my finances because the miracle of compounding quietly takes care of them.

I know people have said that once they have blitzed their mortgage they will then be able to blitz their pensions. But what happens if their working life is halved due to an illness? They may have paid off their mortgage, but would not have had time to start their pension provision.

If I had an illness right now (which wasn't covered by my insurance, so didn't result in mortgage being paid off), I could downsize to a smaller house, use my ISAs, savings and state benefits to keep me ticking along and meanwhile my pension (which cannot be used for benefit means testing) would quietly compound for 27 years (at a modest 6%) and reach over 144k.

This is why I don't think blitzing your mortgage (to the exclusion of other savings and investments) gives you financial security.