Are "mortgage free wanabees" rethinking due to interest rates?

Slave_to_the_job

I think I like the idea of not having anything going out of my bank each month apart from usual household bills. Things are good now in my working life but if that were to change I could easily live on a basic wage without a mortgage. Earning a little more in interest in saving might sound good but in reality on 80 odd thousand pounds it really isn't that much money per year

ourcornercottage

I have a three pronged approach of mortgage OP's, savings and pension that way I think I have all options covered!

Lomcevak

ourcornercottage wrote: »

I have a three pronged approach of mortgage OP's, savings and pension that way I think I have all options covered!

I do this too

Part of my attitude towards the mortgage comes from my father losing his job in the recession of the early 1990s, at which point his overmortgaged lifestyle disintegrated and we lost the family house. Don't want to go through that again. So OPs aren't purely financial for me - I recognise that in absolute terms there might be better options than overpaying, but I want to reduce it to a level where it wouldn't be a significant burden in the event of an unforeseen drop in our income. At that point I might review how much I overpay it, but i'm not there yet.

Saying that, OPs are no more than about 25% of my typical monthly 'savings' so i'm not going wild with it

lulabelle1

Lomcevak wrote: »

I do this too

Part of my attitude towards the mortgage comes from my father losing his job in the recession of the early 1990s, at which point his overmortgaged lifestyle disintegrated and we lost the family house. Don't want to go through that again. So OPs aren't purely financial for me - I recognise that in absolute terms there might be better options than overpaying, but I want to reduce it to a level where it wouldn't be a significant burden in the event of an unforeseen drop in our income. At that point I might review how much I overpay it, but i'm not there yet.

Saying that, OPs are no more than about 25% of my typical monthly 'savings' so i'm not going wild with it

Totally agree with this and in recent years I've adopted a very similar approach... a balance to OP'ing, saving, investing as well as trying to enjoy life and have fun along the way.

SueP19

Continued low interest is a big bonus as I see it.

To only be charged 1-2% interest on such large sums can only be good.

If you look at the expect rise of interest rates, even if they did start to rise now that could mean a date of 2019 before we reach the heady heights of 8%.

At 2020 I would like to be in the position of saving my mortgage amount, so interest at 8% on £500 a month not including OP's is a nice sum. Even if I am not at the MF point then my monthly budget would be able to withstand the increase in payments.

pollyanna24

I'm like most of you on here. I will continue to overpay as much as I can even while rates are low.

Sometimes I wonder if the bank was mad to lend me so much money, so I want to reduce my mortgage as much as I can so that if something happens with my job, it won't be such a dramatic lifechanging event and I might be able to afford to take a pay cut and not work in London.

I'm lucky in that one of my mortgages is an old one, so I can take back any overpayments if a disaster happens.

chelseablue

I only moved into my house last week so haven't made an over payment yet


I currently have a balance of £1,700 on my credit card, so not really sure whether to chuck any spare at my massive mortgage or clear the cc first then start over paying

SueP19

Look to the interest rate chelsea

chelseablue

My mortgage interest rate is 1.49% and my credit card interest rate is 15%.


But..... I pay about £7 a month interest on my card balance but I'm guessing the interest on my mortgage is a lot more than 7 quid a month haha so still not sure what's best

catwoman73

I'm another one who is saving (and living) rather than repaying. My mortgage is less than £400 pm and I have quite a bit of spare income.

I saved up about £40k and paid for an extension out of this. If I had been overpaying my mortgage, I would have had to borrow at a much higher rate than my current mortgage.

My savings are currently low due to the extension, but I will continue to save and in a year or two I will again be earning more in interest on my savings than I pay on my mortgage. My mortgage interest rate is less than 1% pa and I can get up to 5% on savings, which will be tax free from April.

Instinctively I would like to overpay my mortgage but in the current climate it makes more sense to make it last as long as possible. Obviously if interest change I will change accordingly.