Explain to me Why its Good to Pay off Your Mortgage quickly!

beachbeth

We had a relative who worked hard and saved all his life and then died at 64. This is what makes me wonder if its all worth it!

noh

beachbeth wrote: »

No Im not!!! Im not even taking this into account. I have a good inheritance coming my way, although I know this isn't guaranteed because relatives can fall out with you/change their mind. We have £140,000 equity in our house and could move to a much smaller house in a cheaper area if need be to release some of this and have no mortgage when we retire. So even if I were to receive no inheritance we still have a plan to cover our retirement. I just don't know whether we should work hard to pay off our mortgage now or not. We owe £44,000.

I don't know how much you think you need for a comfortable retirement. I have done the sums for myself and calculate I need savings including personal pension of around £400000 in todays money this doesn't include the value of the state pension.
I don't believe you can release enough equity from your house to make any significant difference.

Nigel

Garnet_Gem

To go back to the original post - It's good to pay off your mortgage quicky because having no mortgage brings a sense of freedom and security into your life.

noh

beachbeth wrote: »

We had a relative who worked hard and saved all his life and then died at 64. This is what makes me wonder if its all worth it!

My father died at 59 . This encouraged me to save even harder so I have the oppourtunity to stop full time work as soon as possible if I so wish.
Paying off the mortgage early is part of the savings plan.

Nigel

taka

I'm in the position where I have taken out a loan to do (esssential ) work on my flat on top of my mortgage. I hate having debt (of any type) and am making overpayments to get rid of this. As soon as this is gone I will be (depending on the interest rates in a couple of years) either overpaying or saving with the plan to get my mortgage as small as possible.

This is for me because...

a) when I took out my current mortgage I had to go back to taking it on over 25 years again (all I could afford at the time) which I HATED doing so I would love to pay off my mortgage off by the time my 1st mortgage would have ended (if that makes any sense!!).

b) Realistically I can't rely on being able to do the job I currently do until I retire so at some point I will need to change tack and possibly retrain. If I manage to get rid of the mortgage then a huge chunk of my wages would not be eaten up with the repayments so would I have the choice of taking a job with lower pay that I enjoy instead of having to do a job for the money.

c) I would love to have a family at some point and I think having a decent amount of capital would give more options to me/my family in the future.

I am not doing without to achieve this necessarily, just being more organised and thinking more about what I spend my money on and why I'm buying it. I plan still to have a good quality of life while I do it. Its more about giving me the freedom and security to not have to worry about having to meet the payments in the future!

globalds

This might sound a bit lame but here goes .
I am overpaying my mortgage because then Tomorrow(not literally ) If I wish to do something ..I don't know what ..I hope one of the things not holding me back is a mortgage from 20 years earlier.

I also must be a bit of a pesimist .. When I sit back and think ..This bill paying thing is getting easy ....A smal voice whispers ...Maybe because these are the Good days ....shouldn't you get prepared for some Rainy days..

busy_b

I,m in a position to pay off my £36,000 mortgage (against a 200k property) but haven't got the nerve to do it! I have therefore pondered on offsetting my savings for all the reasons stated above.

We ran a successful business but made a huge decision to downsize when we had accumulated enough savings to pay off our mortgage. We are in our late thirties and only had our two children late and so now want to enjoy life with them.

I know we would struggle to build up savings on that scale again and so I don't think I can just hand it over to the mortgage company and know it's gone forever!

I have ten years left to run on my current mortgage and so by offsetting my savings, I have access to them but unless i touch them my mortgage is effectively paid off (in my eyes).

I haven't got a clue if I'm doing the right thing and have spent 12 months pondering on whether or not I should just pay off my mortgage in full and be £400 a month better off. Somehow that's not the same as having 36k in the bank though!

We're in a fortunate position but have worked like crazy to get here and still don't know the answer - should we pay it off and it's gone or should we be secure in the knowledge that we can pay it off if ever we want to but still have access to the money if we need it! Who knows?????

mrs_deadline

We want to clear the mortgage or fully offset it so we can scale down our work commitments well ahead of retirement or premature death (cheerful crowd on here tonight...) and have more time to enjoy life!

busy b: for what it's worth I'd use the money to offset the mortgage too. Unless offsetting would mean taking it out of a cash ISA, in which case I'd leave it where it is. Being without any savings would make me too jumpy.

DickDastardly_2

I hear what the OP is saying and t an extent agree. You have to call it as you see it. We are trying to opay our mortgage off early so I can then only work for what we need. I hate working and I hate paying interest, so that at the moment is the greater spur to get shot of the mortgage. If our lives change or other things become more important, then, yes you're right to hell with it!

I too have also stopped all payments into pensions because I will a) be very suprised if I live long enough to see it and b) I think they are a scam. I would rather invest in my house and/or when thats finished keep the cash in a sock rather than risk it all with people I dont know who will very likely lose it all and then say ah well, your problem and leave me high and dry.

djbd1973

noh wrote: »

I don't know how much you think you need for a comfortable retirement. I have done the sums for myself and calculate I need savings including personal pension of around £400000 in todays money this doesn't include the value of the state pension.
I don't believe you can release enough equity from your house to make any significant difference.

Nigel

I agree with Nigel - you need a large pot whether it is in a pension or not unless you plan to continue working past retirement. Yes you may die before pension age so enjoying life now is a good idea in that sense, but paying several years wages to a mortgage company in interest fees is not where I personally want to put my money which is why I want to clear my mortgage. I am not a fan of pensions although I do have a pension, but I don't enjoy giving my hard earned money to a mortgage company, and I also look towards a well diversified plan for my retirement whereby sacrificing some luxuries now, I can have some comfort (assuming I am still around) later in life. I personally do not want to leave it to chance, and I also don't want to stitch my wife up with no security or income in later life should I decide to switch off one morning and catch the wrong bus to the hospital.