Is it so wrong to pay off my mortgage early?

AnotherJoe

Red29 wrote: »

I'm a director of a limited company, so with the recent dividend taxation changes, it looks like a diverting money into a pension makes sense to avoid higher rate taxation. My only concern with a pension is they have had such a bad rep, what if the scheme goes bust or grows poorly?

Where do they have a "bad rep"? With whom? A pension cant "go bust". If it grows poorly that's better than not growing at all.Asa director you can make a massive uplift on the money you pay in. If it didn't grow at all you would still be quids in.

Frankly these seem like pathetic rationalizations to avoid you taking the most prudent and obvious course of action.

Red29

AnotherJoe wrote: »

Where do they have a "bad rep"? With whom? A pension cant "go bust". If it grows poorly that's better than not growing at all.Asa director you can make a massive uplift on the money you pay in. If it didn't grow at all you would still be quids in.

Frankly these seem like pathetic rationalizations to avoid you taking the most prudent and obvious course of action.

You really don't need to use such a patronising term as "pathetic" - it doesn't make your argument any stronger, it just makes you sound condescending.

You would probably have had the same patronising attitude if I had posted in July 2007, a month before the start of the credit crunch. I am trying to rationally consider economic fundamentals and the precarious state of the world economy in my deliberations, in relation to the fact that I run my own business and there is no other income coming in to pay the mortgage.

I came and posted today not for more advice, but as a courtesy to the all the previous posters, who have been so generous with their time and advice.

Dird

When you have such a low mortgage it's not only about 1.29% vs 3% but whether you'll have to pay an £250 remortage fee and additional £80 fee with each remortgage

bigadaj

bigfreddiel wrote: »

Not really my dad held equities in the 1950's, must have run in the family

fj

No, I meant that isas didn't exist in the 1980s.

Dird

bigadaj wrote: »

No, I meant that isas didn't exist in the 1980s.

They were called the taliban back then

Red29

Dird wrote: »

When you have such a low mortgage it's not only about 1.29% vs 3% but whether you'll have to pay an £250 remortage fee and additional £80 fee with each remortgage

When I do pay this mortgage off I am never ever taking out another one :rotfl::)

Ballard

I'm in a very similar position to you. We're both 47 with low interest offset mortgages. I could have paid mine off 6 or 7 years ago but opted to use cash isas instead. These made me a couple of percent per annum at the time. I just looked at the free money and it was a no brainer.

My intention was always to pay it off as soon as I could but once I'd done the maths I realised that playing the system was the better way for me.

Paying off the mortgage also means either taking delivery of the deeds or paying your bank to hold them.

It's your choice, though. Either pay it off and feel smug or play the game and earn yourself some cash... And feel smug!

I'm typing on my phone and can't get to see your initial post but you may even be able to drawdown more than your outstanding balance to put that into interest bearing accounts. I doubt very much that you'd want to but it might be an option.

Perhaps you could play the game for a few months so that you can physically see how much profit you'll make. You can easily close the accounts and pay it off if you decide that it's not for you.

There's no need worrying about the government running out of cash and being unable to bail people out for their lost £75k. If that happens the country would REALLY be in trouble so your individual position wouldn't make things much worse.

greenglide

I'm a director of a limited company

So you should only pay employers contributions to your pension. Making employees contributions loses you tax and NI savings.

greenglide

Paying off the mortgage also means either taking delivery of the deeds or paying your bank to hold them.

Deeds aren't important these days unless the house was bought a long long time ago. The registration with the land registry is what matters now.

I assume you can still leave a small amount outstanding on the mortgage or a solicitor should be prepared to keep them with your will without charge if they draw up the will?

Ballard

greenglide wrote: »

Deeds aren't important these days unless the house was bought a long long time ago. The registration with the land registry is what matters now.

I assume you can still leave a small amount outstanding on the mortgage or a solicitor should be prepared to keep them with your will without charge if they draw up the will?

Okay. It used to make a difference but I take your point.

Unless I move I don't intend to pay it off. Having the ability to borrow cheaply is always a bonus.