Mortgage nearly finished - do we start again?

ixwood

Have you fully "storaged out" your house? It's surprising how many shelves, rails and little cupboards you can fit in if you start thinking about it.

What about the loft? Any portentail? I've noticed new house these days tend to have them ultilised for living space. Buliders cottoned on to it!

ixwood

Right, for example, I've got a IO offset account.

I invest more than the difference between a repayment and IO mortgage payment every month. I'm basically hoping this is going to grow at a higher % than my mortgage rate. So overall I should pay less. Obviously if my investments don't grow very well, I'll have to pay more.

BUT, when the time comes (in 10 or 15 years maybe, instead of 20) that I could pay the mortage off, I may well decidee to not and let my investments keep growing. So 5r or 10 years after that, I could have enough to pay off my mortgage and have a substantial sum left over. To pocket.

History would suggest it's the best route, and I'm taking the gamble.

ixwood

Jamesd (most insightful and informative dude on here in IMO) explains it better than me. Search for some of his posts. They always make great sense and can save people fortunes.

stedwell

Yeah - looked at loft - no go there really. House has no potential to extend otherwise I do that rather than move! We will probably carry on as we are but the other house is so tempting. Why have the space when you are old and don't need it? It would make such a huge difference to us while the girls are young. I know it would be a lot of money per month but then different familes have different needs? We tend to camp so don't spend money on costly holidays. I'd rather have more room at home than 2 weeks in cyprus! I think Ilss just cycle round for another look! Thanks for the speediness of you replies!

A_Nice_Englishman

Thanks ixwood I think I follow that.
It didn't work with endowments, but then your investements hopefully have lower charges and are better chosen.

Personally, I paid off my mortgage as fast as I could, but put a little into other investments. Now, the mortgage is paid off entirely and I have a substantial amount to spare each month which I am putting into equities within an ISA wrapper. (I already have what I am comfortable with in cash and am in a good finalk salary pension scheme).

Sorry to the OP for going off topic. We better stop there.

PoorDave

stedwell wrote: »

Hi
Due to a spate of young bereavements in our family we are becoming very much of the opinion of "go for it now" - a phrase which we would not usually associate ourselves with.

Surely this cuts both ways though. Would you rather the partner left living/children were burdened with a higher mortgage if one of you were to die?

"Live for today" is all very well, but is not a brilliant way of planning your finances!

Any possibility of extending your existing house to the back or side for less than it would cost to gain the same square footage by moving?

Jonbvn

ixwood wrote: »

Repayments are a certain rip off and IO is a gamble. You could do better, you could do worse.

So from what you say, both repayment & IO mortgages are no good?

Could you explain how (on earth) you arrived at such (a ridiculous) conclusion?;)

A_Nice_Englishman

Good point Jonbvn!

In my view, having an interest only mortgage and putting the money you would have used to repay the capital elsewhere is like borrowing to invest. You might win or, like those who took out endowments in the 1970's and 1980's ,you might lose. I have no problem with that for those who know what they are doing and understand the risks.

Having a repayment or interest only mortgage and paying it off as quickly as you can seems to me to be the lowest risk option. The less you owe the less you are at the mercy of increases in interest rates and you don't have to worry about investments performing worse than you had hoped. Once the mortgage is paid off you have secured your home forever, you have the freedom to take a lower paid job if you want to and money is released for alternative investments (or to spend if that's what you prefer).

Having a repayment mortgage and paying off the minimum amount of capital you can (i.e. not overpaying) is somewhere in between.

ashcarrot

Can you not knock a couple of rooms in to one to make bigger rooms esp if you just using them for storage. What about converting the loft / storing stuff in there, how much stuff in storage do you *really* need

A_Nice_Englishman

How about renting space to put stuff you can't bear to throw away but don't use very often?