Mortgage free is it worth it?

missile

As in most things, IMHO moderation is the way to go.
Live a little today and save a little for tomorrow.

SAMMYE_2

The future belongs to those who prepare for it today.

Is it worth paying off the biggest debt you will ever have as quickly as possible!?

YES!

What you are prepared to sacrifice is entirely personal but one thing is true the more you pay off the more money you will inevitably have.

Jock_Tight

vacheron wrote: »

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.

We are also on an offset mortgage and were 100% offset 5 years ago at 64k owing.

Each time we make a mortgage payment the equivalent is taken out the savings (earning 0% as offset) and put elsewhere, ISA etc to make interest.

vacheron

Jock_Tight wrote: »

We are also on an offset mortgage and were 100% offset 5 years ago at 64k owing.

Each time we make a mortgage payment the equivalent is taken out the savings (earning 0% as offset) and put elsewhere, ISA etc to make interest.

Good advice.

I used to do that too, but managed to go one further when I realised that they had increased the reserve (Barclays term for mortgage linked overdraft) on my offset current account to £11K, so I changed my monthly repayment direct debt to come from the offset current account which means that I am now using their own overdraft to pay the mortgage until I get near the limit which I estimate will be in about 2 years time. This effectively increases the amount of the available offset facility for the future, and also means that I don't have to move money each month as it automatically earns the mortgage rate. (3.49% for me)

If you have a similar facility it could be worth looking into seeing if you can do the same. Plus, if your rate means that you can get a higher return in savings it actually earns you more money too

mmmsnow

vacheron wrote: »

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).

I completely agree - you don't need to drastically cut down to find the money to overpay. Money saving is sometimes a change in attitude rather than a change in lifestyle.

mmmsnow

Jock_Tight wrote: »

We are also on an offset mortgage and were 100% offset 5 years ago at 64k owing.

Each time we make a mortgage payment the equivalent is taken out the savings (earning 0% as offset) and put elsewhere, ISA etc to make interest.

I've done the same thing . Since the ISA rates crashed a few years ago, we withdrew our savings and put them in an offset mortgage. Best financial decision we've ever made! We will be at 100% offset in three months :j then we can start building our ISAs up again.

LillythePink

Dear all

Wow lots to think about with the theme being balance

We want to build up savings so that if OH couldn't work, we could still pay the bills - he is in construction and could easily have an accident which wouldn't be covered by sick pay from work (motorbike accident for example).

When my payrise came through this year, we have opened up an account with the Co-op (where our mortgage is) and have started to transfer the equivalent payrise over to start building a fund to overpay with.

Although we have a mortgage where we can overpay as much as we like and it's like an offset mortgage but not quite, I like the idea of having the money accessible to us if we need it without going through hoops to get the cash. Also, we get tax relief on mortgage interest luckily due to location.

We are in the Channel Islands where house prices only ever go up and unfortunately, there is no multiple suppliers for utilities to move to/from - we have one electric and one water so we are stuck there. We also don't have Aldi, Lidl, Tesco, Asda etc and i know that groceries is one are that I really do have to start cutting down on.

Our rate is 1.99% (1.49 above base tracker) but you find that people don't move mortgage providers often over here because of the large fees we pay.

I am now keen and motivated to put more into our other savings pot - if even to see it grow and it's good that it's not on our online banking (out of sight and out of mind and all that!!)

Thanks all, you have helped put things into perspective.

Needhelpsaving

I paydown my mortgage for security too - we are able to get the OP's back if we wish (redundancy etc), so this isn't a major problem for us at the moment. But I can't dip into this like I would be tempted to with a savings account.

I can't afford to pay huge amounts off, maybe a couple of hundred pounds here and there and I haven't changed a huge amount lifestyle wise.

It is addictive though!

Hurdler

mmmsnow wrote: »

I completely agree - you don't need to drastically cut down to find the money to overpay. Money saving is sometimes a change in attitude rather than a change in lifestyle.

I echo this... Doing an SOA and trimming down a lot of "unnecessaries" or in some cases negotiating better deals helped before I had a job to go to.

Of course - ordering ALL my DVD/BluRay/CD/Games purchases online now... and I feel marginally guilty that as a former high using HMV/Game customer, perhaps I have contributed in sending them to the wall. Then again... :cool:

mmmsnow

If you are looking at cutting down your grocery spend, I would recommend visiting the Old Style Moneysaving board. There's lots of advice, recipes and support.

I started menu planning a couple of months ago and it's saved me both time and money. In the beginning, I did a quick stock take of everything in my kitchen and drew up a month's worth of meals based on what I already had. My weekly shop has gone down as a result - we only buy things that we've run out of or stock up on things we regularly use if it's on special.