DON'T Pay Your Mortgage Off Early!!!

mountainofdebt

but that is only thanks to a payout we received from FIL pension company as he died before he received any benefit from it, so its a bitter sweet thing really.

Hubby and I have decided to put what would have been our mortgage payments into a savings account each month BUT if we fancy a holiday or a slurge one month we have the money to do so.

Personally I think being having no mortgage means having one less pressure on you and in this day and age that can't be a bad thing.

Sloppy_Saver

WISHIWASRICH wrote:

Sloopy Saver I'm sure you're quite abit younger than the average poster on this board so that probably explains the difference as much as anything....don't think I'd have wanted to pay of my mortgage in my 30's either....it's an age thing:rolleyes:

So, what you're saying is that the Pay Of Your Mortgage ASAP strategy is only appropriate for older people, who have already made provision for old age?

The trouble is that this nugget of information isn't placed anywhere on this forum. Instead everyone, regardless of age or circumstance, is encouraged to rush headlong into a strategy that could leave them in retirement poverty.

I had a quick peek at the profiles of some of the contributors on this very message stream:

catowen (AKA) "Missy" is 36
kaz2904 is 29
cupid_stunt is 24
savingforoz is 46, admittedly pretty old but still 19 years to retirement.

Better tell them it's an age thing, before it's too late.

To paraphrase what I have already said on a different message thread:

"To my knowledge most contributors have no financial experience yet spout off half-baked schemes as though they're IFAs. Then a load of other people jump on the bandwagon and they all jolly themselves along into financial disaster."

POYM in 2yrs/8yrs/10yrs is the financial equivalent of crash dieting. Hands up anyone who thinks a crash diet is good for you?

Kaz2904

Sloppy Saver you naughty naughty boy I am not 29. Not yet- it is well over a year until I am 30!!! I won't be 29 until 29/04. Wow lucky me that means that this year is my lucky birthday and I do hope you all remember it!!!
I don't think it's just an age thing. It's a have you got kids and are able to chuck money at mortgage thing. Me and cupid_stunt are able to because she doesn't have kids and mine aren't old enough to harrass me enough to part with more than 30p for sweets!
And (and I know it's not gramatically correct) I have savings and a pension and even my kids have pensions. DH doesn't but oif you would like to come round and explain why he should have then feel free because I have given up now and am just trying to make sure that any money which would be put into a pension for him is not wasted.

Sloppy_Saver

Kaz2904 wrote:

Sloppy Saver you naughty naughty boy I am not 29. Not yet- it is well over a year until I am 30!!! I won't be 29 until 29/04. Wow lucky me that means that this year is my lucky birthday and I do hope you all remember it!!!
I don't think it's just an age thing. It's a have you got kids and are able to chuck money at mortgage thing. Me and cupid_stunt are able to because she doesn't have kids and mine aren't old enough to harrass me enough to part with more than 30p for sweets!
And (and I know it's not gramatically correct) I have savings and a pension and even my kids have pensions. DH doesn't but oif you would like to come round and explain why he should have then feel free because I have given up now and am just trying to make sure that any money which would be put into a pension for him is not wasted.

Oh Kaz, you'll have to stop following me around these message boards, people will say we are in love. (and Missy will be getting jealous)

Sounds to me that you have yourself so pensioned up that you don't need hubby onboard. Not sure about the kiddy pensions though. Thought about it myself, but decided to save for their Uni fees (or first home fees) instead. That way, my gift will help them sort out their own pensions and will also have a longer impact on their lives.

Kaz2904

Ah see by having their pensions in place now and the miracle of compounding -which you love! They can have ok pensions if they never pay more than £25 per month and I will be mortgage free before either of them goes to university (or borstal the way DD is going!!!) and therefore able able to pay fees and accommodation (sp?) so stick that in your pipe and smoke it! BTW don't you mean buy low sell high? If not you'll be on DFW pretty darn quick let me tell you!

Sloppy_Saver

Kaz2904 wrote:

Ah see by having their pensions in place now and the miracle of compounding -which you love! They can have ok pensions if they never pay more than £25 per month and I will be mortgage free before either of them goes to university (or borstal the way DD is going!!!) and therefore able able to pay fees and accommodation (sp?) so stick that in your pipe and smoke it! BTW don't you mean buy low sell high? If not you'll be on DFW pretty darn quick let me tell you!

Good god, with all that compounding, they'll be millionaires by the time they retire. Of course they'll be living on the moon and flying around by jet packs so will need all the extra cash.

Ahhh compounding. As good as sex, but without having to cuddle after. bliss.

Redbedhead

WISHIWASRICH wrote:

Sloopy Saver I'm sure you're quite abit younger than the average poster on this board so that probably explains the difference as much as anything....don't think I'd have wanted to pay of my mortgage in my 30's either....it's an age thing:rolleyes:

I have been trying to pay off my mortgage since I was in my 20's and am now 31.

I think as long as the action you take to pay off your mortgage doesn't substantially reduce your standard of living, then lots of people would take the option.

In the same way as there is compound interest involved in saving for a pension, there are compond savings of mortgage interest if you make additional repayments early in the mortgage.

comping_cat

I had a quick peek at the profiles of some of the contributors on this very message stream:

catowen (AKA) "Missy" is 36
kaz2904 is 29
cupid_stunt is 24
savingforoz is 46, admittedly pretty old but still 19 years to retirement.

Oy, cheeky - im 35!!!! (and only just too) so im def old enough to know i dont need an extra year added to me!!!!

My reasons for wanting to be mortgage free arnt because of my age, but because i want to be able to help my children when they are older - i have a pension and some savings (not enough savings, but im sure there are very few who have ALL they want) and as i have put on other threads, i can 'borrow back' any of my overpayments so i have a safety net there too. However, my biggest expenditure each month is my mortgage, and if i didnt have that to pay out (or rent, which in my area is a lot more than my mortgage payments) i would have that money free each month to be able to do other things. That could be more into a pension, more into savings, blow the lot on holidays and 'stuff', get my children through university (if they go) or just help them with whatever they want to do - while i have the mortgage, my ability to do that is greatly reduced.

Sloppy_Saver

catowen wrote:

Oy, cheeky - im 35!!!! (and only just too) so im def old enough to know i dont need an extra year added to me!!!!

Gee, my age guessing is getting more controversial than my "Don't pay off your mortgage early" rant

catowen wrote:

My reasons for wanting to be mortgage free arnt because of my age, but because i want to be able to help my children when they are older - i have a pension and some savings (not enough savings, but im sure there are very few who have ALL they want) and as i have put on other threads, i can 'borrow back' any of my overpayments so i have a safety net there too. However, my biggest expenditure each month is my mortgage, and if i didnt have that to pay out (or rent, which in my area is a lot more than my mortgage payments) i would have that money free each month to be able to do other things. That could be more into a pension, more into savings, blow the lot on holidays and 'stuff', get my children through university (if they go) or just help them with whatever they want to do - while i have the mortgage, my ability to do that is greatly reduced.

You could put a little away each month for your kids. I set up a child bond for each of mine when they were born, 25 quid each per month. Not a huge amount, but it's tax free and has 18 years of compound interest (ohh, does anyone shiver with pleasure at that word? no? just me then eh?).

I guess I just believe that a little bit of money here and there, over a long period of time makes a better return on the same amount of money than if I concentrated on one problem at a time.

You're right about only a few having all they want, you can only do so much with your money and you just have to hope that you do the right thing.

The good thing is that I know I'M doing the right thing cos I'm an expert in financial matters. "Buy High, sell low!"

nrsql

Haven't read anything apart from the original post but.

If someone wants to pay off their mortgage then that's their choice. It may turn out to be a bad choice or it may be good - no one can tell.
If it causes someone to use money that would otherwise be lost on the gee gee's or spent on drink/ holidays is that bad?

Sure it might be sensible to have other investments but whatever motivates you is the best option.

>> the earlier you start paying towards a pension the better off you'll be.
Try telling that to the 125,000 people who've lost theirs after starting early.

>> have invested all of their money in a single investment
Is that a bad thing? Choose what will make you the most money and go for it. Diversification reduces risk but also guarantees mediocre returns. As long as you realise it's what yo are doing then it's your choice. Similar to people putting all their savings into geared buy-to-lets or borrowing to play the stock market. It's high risk but may pay off and who can say it's not a reasonable choice - compared to that paying off a mortgage is low risk and low reward so why not. I'm guessing it's part of a longer term plan - pay off the mortgage while still young then use the money for something else.

p.s. I've paid off all of my residential mortgage apart from a smidgeon but only after building up a fair investment in other areas. I considered it a risk free place to hold money i.e low volaltility was important for these funds. It's a flexible mortgage so I can always get a fair wedge back if I find a better use for it (where's that housing crash please).