Why do you people bother?

chelseablue

Been think about this some more, another reason for overpaying is that at the moment we both need to work full time to service the mortgage.


As the balance reduces I hopefully wont need to earn as much as I need to at the moment so part time work could be a possibility in the future when we get the balance down


A distant dream at the moment

Lrimas

Am I the only one who felt a tiny bit insulted by the term "you people"?

(I think I might be watching too much Community College though )

Anyway, these days you are going to be hard pressed to find savings accounts that give better interest than mortgages. Santander is getting cut to 1.5% and my mortgage is on 1.6%.

I off course have some of the standard regular savings accounts and high interest bank accounts but there aren't a lot of good "safe" savings out there. I'm also at risk of being taxed 40% on my savings as I'm close to the £500 limit.

Most of my money goes to investments as I have a fairly good grasp of what risk really means but I also overpay my mortgage (by shortening my mortgage term).

WeeMidgie

I'm another who encountered health issues, so paying down the mortgage by taking in a lodger and belt tightening for a few years did the trick. The relief of being able to go part time and continue doing a job I love doing was immense. I have since downsized into a mid terraced new build, with plenty of green space and peace and quiet, and low bills. Knowing how little I can live on is huge for peace of mind and keeping stress at bay.

dark^knight

At the end of the day, it's a personal choice.

I want to be mortgage free as I don't like debt...have no debts apart from the mortgage...and want to get rid of that as soon as I can.

I am a simple person, content with all I have, and to be mortgage free would be a dream come true.

HornetSaver

I plan to be on the property ladder in my very early 30s (i.e. 30, or 31 at the latest).

If I buy up north then, even on current (inflation adjusted) earnings I could realistically be mortgage free before 40 should rates stay low; if I buy down south I intend to be mortgage free before I turn 50. Kids might be a game-changer in either scenario, but then that's all the more reason to front-load paying the mortgage off in my scenario. Because even in that scenario, I'd rather be in a position to give them a leg-up in their early 20s, than spend thousands upon thousands over a decade and a half buying my way out of a few tears and temper tantrums.

Under either scenario, at the point I end up mortgage-free, will I be in a better overall position, regardless of the differential between saving and mortgage interest rates? Yes.

Because at that point my only outgoings will be my day-to-day living costs (which will have by definition have been low, otherwise I wouldn't have been able to overpay so heavily on the mortgage) and my pension (broadly defined - that might be investments, property, a pension on top of my work one, etc). The rest of the money I could do as I choose with. I would still choose to save some, but would certainly loosen the pursestrings significantly as far as travel and leisure were concerned.

To take that attitude without overpaying on the mortgage, I'd realistically be looking at 60-65. That's potentially 20 fewer years to see the world with, in exchange for a relatively small tangible benefit in terms of an optimal interest differential.

edinburgher

Secret_Saving_Squirrel wrote: »

You may not be able to pay off your mortgage with your 'investments' if you wake up one day and find them worthless. That may sound ridiculous but it isn't to those of us who remember Black Friday, and if you could speak to any Lloyds 'names' who lost everything some years ago, they would undoubtedly agree with me.

You remember 1929?! I thought you were much younger!

Mummyisbeauty

We do it as we want the extra money per month when our son is older and needs it more. Also it is a short term pain for a long term gain.

Personally we budget it in as just a regular payment on my spreadsheet so I don't even notice it going out.

System

Don't worry about investment crashes, they always come back, and if you held shares from 1929 you'd be doing extremely well now, just don't rely on the present value or need to withdraw them at will, like you wouldn't rely on the continuous ability to sell a house

System

Crashes are actually (fairly) short lived bargain buying opportunities

HornetSaver

MatthewAinsworth wrote: »

Don't worry about investment crashes, they always come back, and if you held shares from 1929 you'd be doing extremely well now, just don't rely on the present value or need to withdraw them at will, like you wouldn't rely on the continuous ability to sell a house

You wouldn't?

I'm not saying they're liquid transactions, but if you buy at anything other than the absolute peak it's normally a safe bet that you can recoup your capital and then some.