Mortgage Free by 43

ImmortalQueen

Hi Everyone,

I'd like a bit of advice please?

I'm constantly listening to Martin saying that it's better to overpay on the mortgage whilst we have the cash and saving rates are so appallingly low :T

I'm able to overpay a regular monthly sum and whilst this would reduce the debt really quickly, here is my quandary:

I overpay and I have no debt by 43 - however my parents say that if I pay the mortgage off in full, then this will affect my mortgage creditability when I want to next go for a mortgage. They're of the mind that I reduce the payments down to the absolute minimum and let the mortgage run for it's existing term (2020).

Both ways seem feasible.
Look forward to any advice anyone can give.

Thank you

Mortgage when started (Jan 2001): £43,500
Current mortgage (Jan 2015): £13,250
Mortgage free day: November 2016

engineer_amy

I would have thought paying off a mortgage in full early would only increase your credibility in the eyes of a future mortgage lender, as it shows you can manage your finances effectively.

Why pay more interest than necessary? Overpay on the mortgage now, reduce any interest due and then once the mortgage is clear, start saving.

And if you maintain a credit card or two, or other credit commitments then your credit file should look pretty healthy in the eyes of lenders

juststuff123

I'm not sure how your future credit will be affected but, If your at all nervous I'd go with your parents plan. The interest on say £100 will be minimal - If you start with this plan you can always change your mind, it just allows for a little flexibility

gavted

I paid my mortgage off in my early thirties. Made no difference when we went for another mortgage, apart from I was also allowed to look at First Time Buyer deals as well at most banks. (This seems to kick in if your mortgage free for >3 years).

Over pay and get rid of it. A said previously, maintain a credit card and use Interest free credit for purchases when available. That and a healthy savings balance will always make you look good.