Mortgage free is it worth it?

LillythePink

Hey all

Is it really worth scrimping and saving to be mortgage free?

I have read threads and am in awe of the aspirations of you all wanting to be free of it.

I know that the quicker you pay it off the less interest you pay, but that aside, I like holidays (work bonus pays for that), I like living (not that we spend lots socially or lots of clothes etc) but the thought of living almost hand to mouth in order to pay it off just seems like a waste when you could be dead tomorrow!

I know that sounds dramatic and stupid and I am not on a downer but I am still young (ish) and want to live for now.

I suppose it also depends on your mortgage size etc (ours is £335k) so not small but i am in two minds about going all out to pay it off by not having hols and the odd treat just to pay it off a few years earlier.

I don't really know what I am rambling on about or trying to say but what drives you all to do it and do you really sacrifice living to pay it off?

lexington013

Hi, well to answer your question, for me it's security, knowing that if I did lose my job then I could get by and wouldn't have to lose the house I love. I'm pretty driven not to be a wage slave and the thought of leaving my career and having options to go and do something else also appeals. Good luck if you decide to stay with it, a lot can change in a few years. In my case I can move from 20 year term to 8 years by changing how I think about money. I see it as a personal challenge and 8 years isn't as bad as 20 if i set up the spreadsheets, direct debit and check in to the great support on here!

Four_leaf_clover_2

Being mortgage free is completely worth the years of hard graft to achieve it. I have been mortgage free for 10 years now. As with anything in life being mortgage free is an opportunity that it is up to the individual to make the most of.

For me it has been life changing and given me freedom and choices. It has enabled me to retrain into a career I love. I now work part time and the quality of my life has improved dramatically.

Through my twenties I did work hard. Life wasn't all about clearing the mortgage though. There has to be balance or you burn yourself out and give up. I was fortunate in that the industry I worked in was flourishing and paid high salaries. I invested in properties that I let so effectively other people were paying the mortgages on those for me. Their values soared and I sold them at the right time. Then came that short period when there were some really good interest rates on savings.

Its not all about working crazy hours and having no life. You need to stand back from it and work out a plan to raise as much cash as possible, from as many means as you can. All this is far harder at the moment without a doubt, considering wage freezes, property prices not rising as steeply as they once did and next to nothing earnt on savings. I was very fortunate and lots of things played there part in helping me become mf. Some of it luck and some of it judgement. I would recommend anyone to go for it.

Joe_Bloggs

In order to work out what is the best path it is necessary to consider all alternative paths and evaluate the differences between them.
This does require some skill/ judgement and then luck. This can be acquired through study or/and trial and error/discussion on fora etc.

Realistic budgeting is the key to everything. Budgets can go wrong so build in savings buffers.
J_B.

What interest rate is the 335K at ? This is the key statistic as I see it.

Hurdler

LillythePink wrote: »

Hey all

Is it really worth scrimping and saving to be mortgage free?

I have read threads and am in awe of the aspirations of you all wanting to be free of it.

I know that the quicker you pay it off the less interest you pay, but that aside, I like holidays (work bonus pays for that), I like living (not that we spend lots socially or lots of clothes etc) but the thought of living almost hand to mouth in order to pay it off just seems like a waste when you could be dead tomorrow!

I know that sounds dramatic and stupid and I am not on a downer but I am still young (ish) and want to live for now.

I suppose it also depends on your mortgage size etc (ours is £335k) so not small but i am in two minds about going all out to pay it off by not having hols and the odd treat just to pay it off a few years earlier.

I don't really know what I am rambling on about or trying to say but what drives you all to do it and do you really sacrifice living to pay it off?

Not everyone goes without to achieve overpayments on their mortgage... Plenty of people here do still enjoy their lives.

It's a balance that only the MFWer can determine for themselves.

I am in utter awe of those who are that disciplined to be honest having just splurged on a load of techy new toys this month. I could have let my PC die and just rely on a laptop/netbook. I didn't really need the new iPad. But I wanted them, at the moment I can afford them and so I got them.
That doesn't stop me for wanting to be mortgage free in the slightest. It just means this month I won't have as much spare.

newgirly

Hi, it does not have to be all or or nothing, why not do both? Go on holidays and treat yourself but get the best prices/go during the cheaper months etc. Don't mean to be cheeky but that is a massive mortgage , so even relatively small payments would knock years off with probably no change to lifestyle , just more savvy shopping etc. Have you had a look on martins mortgage calculator to see how much difference even small op's can make?

You must be at least considereing overpaying as you are looking on here, I say go for it, best of luck

torbrex

For me to start with it was all about paying as much as possible into the mortgage but I realised that I had no other life so I learned to strike a balance.

Now that the mortgage is paid off, I am reaping the benefit of not having to work as many hours in a month to pay my bills and have far more disposable income than I ever thought possible.

Jock_Tight

For us its a balance between the desire to be mortgage free while still enjoying little treats and holidays. We could have scrimped more to pay off quicker but that would mean missing out on other things.

Its not been as hard as I thought, you get used to the lower amount available at the end of each month when fixed overpayments come off. Salary increases go into the mortgage along with any bonuses, again as we managed without them before we do not miss them.

When the mortgage is paid off it'll be like a 38% pay rise for myself !! .....

Go for it.

originalmiscellany

Excellent thought Jock Tight! I'd not thought of it like that We cleared our mortgage a month ago, and I haven't worked out what the pay rise is; certainly a decent amount. I will never get such a good pay rise in my life will I? That said when we do move on to a "forever house" it will be a shock to suddenly lose that pay rise, but that's life

greent

We still go on holidays - sure, not things like Florida (although that's our plan for 2016) but we manage Portugal, Disneyland Paris, Centerparcs, other breaks in the UK (off to Cornwall next week) The eldest two are off on school trips to France this year (not cheap!) and the smaller ones go on all preschool/ school trips. We do tumble tots, beavers, scouts, drama classes, musical theatre... My car is 2.5 years old, DH's just under 2 years old. The children aren't swamped with stuff, but eldest has ipod, mobile, tv with dvd in room, 2nd has mobile, tv with dvd in room, ds3 etc etc. Playroom has PS, wii etc

OPing the mortgage doesn't mean life has to be put in hold. I admire those who can do that seriously for a few years to pay their mortgage off - but it's not for us. We want to pay it off early but also enjoy life whilst doing so. Strike a balance - it's perfectly achievable

As to saving money, our mtge is relatively low and OPs don't save masses and masses - but tehy do save. With a mortgage of 300k+ the potential savings I would have thought are huge.

Possibly try playing with a calculator and see the affect that OPing £100/ £250/ £more? a month can have on the term - and the interest saved by doing so... Quite eye opening...

vacheron

I don't agree with the thinking that paying off a mortgage always equals more security.
If you have 100K of liquid savings and you lose your job, you can use your savings to pay your mortgage and living costs for the next ten or so years. If however you had used that 100K to pay down your mortgage just one day before you could find your house reposessed 6 months down the line when you are unable to meet the relatively tiny montly repayments!

For this reason holding liquid cash offers far more security, however it will cost more money to do this unless your savings interest rate after tax meets or exceeds your mortgage rate.

For this reason I chose an offset mortgage which is now 100% offset which means that I could now settle the account and be mortgage free. However I prefer the security of having the liquid cash available for to draw down for the next 23 years should I need it.

According to my Febuary mortgage statement being "mortgage free" saves me £493.00 per month in interest. Since I took out the mortgage in May 2010 this has added up to over £10,000!

The main reason I wanted to pay down the mortgage as quickly as possible is the thought of the huge amount of interest I would have paid over the years and what I could have done with it instead.
My second target was to have the mortgage fully offset before starting a family as I'd much rather spend £490PM on my children rather than handing it to Barclays to spend on their foreign call centre! Fortunately this was something I managed to achieve as the little-un is due to arrive in the next couple of weeks.

I can't say I really sacrificed anything either. I only earn an average wage but it is amazing what people pay for which adds no value to their lives.

• Buying goods list price
• Not shopping around
• Taking out unnecessarily high usage phone tarrifs
• Sticking with their gas/electricity/insurance supplier year after year
• Not having a water meter installed when one would save them money
• Having a monthly fee bank account but never using any of the benefits
• Not buying things they need on eBay
• Not selling things they don't need on eBay
• Leaving savings in 0.1% paying accounts
• Carrying High interest credit card debt.
• Not using credit cards offering cashback and interest free periods for stoozing.
• Wasting their ISA allowances and paying unnecessary tax
• Buying extended warranties and stupid gap insurance cover

... to name but a few).

By simply not doing the things above you can live an identical standard of living to someone, but pay hundreds of pounds less per month than they do. This saving can then be used to pay off / offset your mortgage which will in turn, save you the same amount again in interest over the remaining term.