Why MFW? I haven't finished borrowing yet...

meme_3

Please can someone explain to me why it would be better to pay off our mortgage than it would to increase it to buy another property (abroad) for our retirement?

OK, Borrow more = 2 properties and higher payments for the next 10 years.

Yes, I know this could be building our savings!

But at the end of it, we sell where we live (currently £400K) and bank the proceeds, retiring at 50 in the process.

All the rubbish (ie credit cards, loans) debt has gone never to return.

Can we really be making the same mistake again by extending the mortgage? - we can afford the payments - £2k left each month after mortgage / household bills / insurances etc.

Kaz2904

As far as I'm concerned, my MFWness is spurred by the desire to get rid of THIS mortgage.
If I then choose to get another to do a BTL or get a bigger place (or both!) then I will once again be a MFW.
I want to pay off the mortgage in order to pay less interest and have more of my own money in my pocket.
Your plan is working on your property holding its value but you still have a plan so no I wouldn't say you were wrong at all.

meme_3

Thanks for your replies. I started the thread because I was curious as to what people out there might think.

I do understand the desire to get rid as soon as possible, but with a second home abroad paid for with an advance against our current home, we will have everything that we want for the future.
Then we can seriously start to pay it off, particularly if we let our 'holiday home'!

Actually, we do overpay, albeit by small amounts, and we took out a shorter term loan originally (15 years instead of 25) when we moved to our current home. It was part endowment, but is now totally on a repayment basis, which has reduced the balance quite dramatically since we did the switch last summer.:j

Only 6 years to go, but with the extra advance, this is expected to extend to 10 years maximum.

So I'm an MFW in waiting...

getmore4less

If the plan is to retire to the home abroad then buying now protects you against upward movement in that location

If you are sure thats where you want to live it also gives you a base to start planning and making a new home

meme_3

getmore4less wrote: »

If the plan is to retire to the home abroad then buying now protects you against upward movement in that location

If you are sure thats where you want to live it also gives you a base to start planning and making a new home

Yes the plan is to move out there ultimately!
When the mortgage has been paid.
So we can retire relatively young, should we wish to do so.

We've visited many times over the past 4 years to make sure that it's what we want before jumping in feet first. (Had to clear some unsecured debt too, which gave us some time to think about it properly).

However, there is a backup plan - have recently invested in my parent's new home as well, so that will be mine one day too, here in the UK. We'll have a home here too if we need it.

Kaz2904

I wouldn't say that you're not a MFW then. Although you have extended your mortgage, you have extended your investments.
Other people just sit and pay their mortgage every month for 25+ years and don't think about it. You have thought about it you have reduced the term and you make overpayments so you are wanting to pay your mortgage off and going about it another way.
I wish you all the best.

meme_3

Thanks for reply Kaz2904.

Have decided to join "Mortgage free in three" thread.

Just waiting for my number from DD.

As of now, the amount "owing" is £247966 (but this includes the money we haven't borrowed yet - see MFIT thread).