Paying off the mortgage versus luxuries of life..

gzoom

Since been burnt in the last housing crash, I was determined to pay off our mortgage on our current house as quickly as possible. We bought our current house 6 year ago, had a relative moderate mortgage of £121,000, and through overpayments/reducing the length of the mortgage from 25 year down to 15 as of this month we have got the outstanding amount down to £44,000.

We've went for a 5 year fixed deal 4 years ago, so have another 12 months or so to go before we can pay off more than 10% per year, but have been building up a little pot of money which we could use to potentially clear the mortgage completely.

But we are at a stage of life where we may well move to a bigger house in the next few year, may be able to start a family of our own, and with mortgage interest rate so low, combined with our relative short term mortgage length (10 years), I'm not entirely sure if it's worth it to aim to 'clear' the mortgage when the fixed deal expires.

Infact soon the interest/cashback we are earning by having the mortgage repayment sum sit in our Santander 1-2-3 accounts (x2 £20K) will match/over take the month interest we are paying on our mortgage (£150/month). We have more money saved up in ISA/Premium bound which we don't need touch for clearing the mortgage - These are our 'rainy day funds' which we wouldn't touch for anything less than a dire emergency.

When we move house, we will end up with another mortgage, so regardless what we do with the money we'll be back in 'debt'. Equally I quite fancy splashing out on a rather expensive 'dream' car in the next 18 months time (A Tesla Model S if anyones interested :blushing:)......I know the 'sensible' thing to do is to clear the mortgage, but we are lucky enough to be able to afford cleaning the mortgage without having to ransack our savings. We both have got good pensions, and both still relative 'young' ...So the temptation to use the money on something a bit reckless is strong.

Don't get me wrong, we been on holidays to some amazingly places in the world, and my wife has just bought a brand car, so we do spend money on things we think are worth while, but every time we do splash out, it makes us feel 'guilty'. Clearing the mortgage has always been one of our saving goals, and it's why we are happy to shop at Alidi/Liddle whilst most of our friends shop at Waitrose.

But who knows whats tomorrow might bring, having no mortgage is pretty much useless if the worst should happen and you end up been 6ft under.....

Have another mortgage free wannabe also got 'cold feet' as they get close to achieving the 'dream' of been totally debt free??

aznlayer

I know exactly where you are coming from. We are young –ish (30+37), good jobs and are not planning on having children. We have some way to go until we are mortgage free, but it should be clear in 5 years, all being well.
I often think whether I should relax a bit and I don’t want to be someone who compromises life experiences. Suppose its about priorities. I have a larger dream of part-time work and life by the sea so suppose sacrifices need to be made.
The car will be a big purchase. The question I would ask is whether I will regret getting it, especially after the glam of ordering, collecting, driving home etc…. If the answer is no, then go ahead.

edinburgher

Honestly? I think you're looking for confirmation bias so that you can choose to 'splash out', compromise the goals that you've been working so hard towards for the last 6 years and not feel bad about it.

Let me present an opposing viewpoint. You have nearly accomplished something pretty epic and your need to buy shiny tin boxes has delayed your progress and will continue to do so if you let it

When you set out to pay off your mortgage, you must have had some pretty powerful feelings behind your decision. Why stop now? Ok, so you're going to die, we all are. Do you honestly expect it to be in the next couple/few decades? I have never bought into the 'you're only young once' trap. The trick is to enjoy yourself as you go, but to prepare for when your earning powers decline.

You could be MF in a matter of months if you choose to do so!

After that point, every pound you earn will be yours, think how fast you'll be able to buy more cars

Ok so you might want to move house - so what? You might not....

Finish the task in hand and then buy the car.

Ps. I don't particularly like cars, but even I think the Tesla is gawgeous

getmore4less

What ever you do it has to be part of the plan, if you know you will be moving somewhere bigger and starting a family then do the budget for that, with kids a min 20 years plan, uni make it 25years.

the problem with just looking at the small mortgage, stash of savings and a fancy car is they are VERY short term which is no good if you have a long game to plan for.

You don't say how old but throw in retire sensible age 55-60 and what does it look like then.

In the zero sum game you are never truly debt free till you can stop earning, life is like a lease you need to have tomorrows payments in the bank otherwise it is just another debt you have to work for.

Goldiegirl

It's true that you are only young once....... but believe it or not you can still enjoy life then you are older!


Only you can make the decision that is right for you.


Have everything you want now, and work to state pension age.


Or carry on with your MFW plans, have a more modest car, pay off the mortgage, prepare for an early retirement, and retire at 55, do everything you want and never have to worry about work again.


There's balance in all things, and I think people should enjoy the now, but with an eye on the future too.


Given the two choices, I know I'd go for the latter. But I'm 55, retired and loving it!:rotfl:Loving it so much that I can confirm it's so much better than having a fancy car 20 years ago!