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

lisyloo

Personally it's all about balance between

enjoying yourself now
saving for the long term future
have some savings/insurance for bad events (sickness, accident, redundancy etc).

When you are older money could help your comfort a great deal e.g. private cataract operation etc. and being able to enjoy life by buying books, dvds, trips, holidays etc.
But you also have to bear in mind that when you are much older you may not be able to injoy a skiing holiday etc. or you might not even get there.

Therefore it's a question of balance.

Personally I don't think people should put off things they really want to do as some people die on their 40's and 50's, but clearly you also need a sensible strategy for long term savings especially as many of us could survive 30 years after retirement.

beachbeth

roddydogs wrote: »

If they didnt do this the money would have to come out of general taxation!
What taxes would you like to go up to make up the shortfall?

I understand this but it doesn't seem fair that people can (and do!) live in council houses, never work, claim benefits, and then when they are old are looked after for free. Then you get someone who has worked hard all their lives, saved and paid taxes and they get nothing free. Also, they could lose their house in order to pay for treatment and end up leaving nothing to siblings when they die. This just doesn't seem right either.

djbd1973

beachbeth wrote: »

I understand this but it doesn't seem fair that people can (and do!) live in council houses, never work, claim benefits, and then when they are old are looked after for free. Then you get someone who has worked hard all their lives, saved and paid taxes and they get nothing free. Also, they could lose their house in order to pay for treatment and end up leaving nothing to siblings when they die. This just doesn't seem right either.

Thats life I'm afraid, and laws and rules are gradually brought in over time by the people that we vote for or don't vote for.

They say common sense is not common.

busy_b

I know exactly what your saying beachbeth and I have witnessed both sides:-
I watched my parents living on a council estate but working full time, paying all their taxes, struggling to bring up two children and having to watch others around them living off the state, joking with my Dad that he was helping them fund their lifestyles!

However, my parents had a choice and as soon as they could they bought their council property, used every penny they had to pay their mortgage and as soon as they could they sold it and moved on.
My parents were extremely proud to own their own home and a huge chunk of my Dad,s wages went into a pension.
We never missed out on anything, whether it was the latest clothes, holidays or toys because somehow and some way my parents got the balance right.

They may have been surrounded by people living off the state but they chose to pay their way.
(Just like many other's that find themselves renting for whatever reason).

Unfortunately the company my Dad worked for for 30 years went bust and took all their pension money with them. My Dad was lucky and received some compensation but over 300 employees lost every penny.
I have been extremely careful with money all my life but have enjoyed it to the full. I save into a small pension (even though I don't think it's worth it). I also save into Cash ISA's as much as I can every year.
It is definitely all about balance and quality of life.

When I can save, I do, when I can overpay my mortgage I do. When I need a holiday, I take one (if I can afford it).

As for the future and the state taking my home to look after me, it's unfair but it's a risk. I'd rather own it and risk it than still be living on the council estate owning nothing !

maxmycardagain

roddydogs wrote: »

If they didnt do this the money would have to come out of general taxation!
What taxes would you like to go up to make up the shortfall?

dont we all pay income tax and national insurance all our working lives?

if we do, and dont claim much till late old age, are we entitled to a rebate?

my parents have worked all their lives, and paid council rent, they will never own that property, please dont confuse "council tenants" with "unwashed non-working layabouts"

savings are the excess of a salary, if that salary has no excess you cant possibly have savings or pay into pensions, which in turn are mainly pots of gold for big fatcat layabout company bosses to rob.

taka

roddydogs wrote: »

Whilst on this subject im trying to work out some figures, im shore i must be going wrong, but i cant see where at the moment. i have £26000 left on my Mge. this costs £215 PM, with 15 years left-total £38,700. (yes, i know everythings variable)
I have also been putting in almost the maximum into my ISA, so i have the £26000 earning 6% tax free, if i leave it there instead of paying off my mortgage, with compound interest, i will have at least £50,000 in there,at the end of 15 years., so shorely i would be daft to pay it off?
yes i know all figures are not going to stay the same, but this is for example only.
Have i got something wrong?

You may be right... If the rate you pay interest on your mortgage is lower than the rate you get in interest from tax free savings an ISA then you may be better off saving it instead of overpaying it directly. However, some choose still to overpay in this situation for reasons like seeing the debt go down even faster for example. Its up to you (and your family) to make the decision you need to for your own reasons!

setmefree2

Hi Beachbeth,

See you are geting a nice warm welcome;). It is difficult striking a balance between POYM and spending, isn't it? Having a better house, car or holiday is a more immediate joy.....being mortgage free sooner rather than later isn't for everyone in the end for all sorts of different reasons.

robp

I'd just like to make one more point about Pensions......

My Father had a couple of Pensions in his lifetime, and when he passed away two years ago this left my Mother with a good income to stop her worrying about anything more than her obvious situation.

I don't think that Dad was much of a money man, however once he knew his situation he made a spreadsheet detailing where everything was.

Mum has her own Pension anyway, but the extra income from Dads years of prudence has meant that his planning and Pension did not go to waste.

Pensions can be a very good thing.....

beachbeth

Dithering_Dad wrote: »

I'm not having a go, but you certainly seem to like making sweeping statements that are not really backed by any hard proof. Are you a Daily Mail reader? :rotfl:

I don't read newspapers. They are all total rubbish! You say I like making sweeping statements but you are also assuming a lot about me in most of your posts in this thread. Saying that "I often find people who float this particular argument are usually the same ones who shy away from the stockmarket because the city boys fund a champagne lifestyle with my money. The net result is that they either fritter their money away on crap they don't need or they put it away in a savings account where the principle sum is eroded by inflation."

This is not true. Ive never thought of the stock market like that at all and didn't know people thought of it like that! I have had shares myself!

Also: "by asking yourself "will this 50" plasma tv really enhance my life more than the one we have right now?". - Im not talking about tv's Im talking about helping my eldest daughter because she is at university as well as holding down a job in order to pay for her clothes, food etc. Do I pay more on my mortgage or do I help her?

Im not of the view that people who pay their mortgages off are a"scrimping miser who needs to get a life as I stated before.

I simply started this discussion to get everyone elses views on paying off your mortgage or balancing a slightly lower mortgage payment over a few more years so that you have more choices now. Please stop putting words in my mouth!

beachbeth

robp wrote: »

My Father had a couple of Pensions in his lifetime, and when he passed away two years ago this left my Mother with a good income to stop her worrying about anything more than her obvious situation.

We sat down with a pensions adviser a few years ago and he said that we would pay £X per month and when my husband retired he would get £X as a pension. This was all well and good and I asked him what would happen if my husband died or if we divorced. He looked surprised (obviously no one had ever asked him this before!). He said if we divorced then hubby would take his pension with him and if he died then it depended whether he died before the age of 65 when he collected his pension or whether he died after.

If he died before, then I would get the lump sum or the pension. But if he died after then the pension would die with him. The adviser said "Look on the bright side, why don't you!". I was quite annoyed because surely you have to look at all scenarios before taking something like this on? I thought that it was grossly unfair that just because I stayed at home looking after the kids that I wouldn't get any of this pension if hubby left me or died at the wrong time! The menfolk in his family have all died around the age of 65 and he keeps saying that he will do the same!!!:cool: The whole thing just seemed so dodgy that we didn't take the pension out. I don't know if pensions still work like this now?