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

setmefree2

You reactionary - you could get chucked off MSE for saying nasty things about energy saving light bulbs.....:money::eek:

minimoocow

Hello all!

We to have been asked by family and friends (who we know have debt problems but still take 3 holidays plus a year): "why bother, you might get hit by a bus tomorrow!"

My response is - yes I might but statistically you (at no-one in particular) are far more likely to get to retirement and have nothing to live off!

Paying the mortgage off for me if part of the savings plan. If I wasn't paying the mortgage off I would be saving/investing it in another way. The option isn;t simply pay off mortgage or spend the money - for me it is more where shall I put my savings?!

Also I think I have "fun" and I'm not sure I would have more if I wasn't paying the mortgage off even if I did spend the money because for me I feel unsettled and nervous without savings, worry about the what ifs etc.

It is all a matter a choice - I started paying into a pension when it wasn't actually worth doing (because if my income stayed at that level it would only reduce the amount of benefits I'd get) but I made a decision then that I wanted to take care of myself without worrying about when I could retire, if the state would provide etc.

Finally, even if I do die I think I would leave my husband in a much better position than if we had spent the money.

MMC

P.S. You were misadvised about the pension - if you divorced your husbands pension would taken into account and you could normally claim half (although it might be decided that he keeps the pension, you get the house instead of actually spliting the pension as this gets messy). And assuming it was a personal/stakeholder pension it is possible to buy an annuity with a spouses pension so if your husband were to die you would get some. Alternatively as others have suggested you could have a pension each.

djbd1973

minimoocow wrote: »

Hello all!

We to have been asked by family and friends (who we know have debt problems but still take 3 holidays plus a year): "why bother, you might get hit by a bus tomorrow!"
.....................................

P.S. You were misadvised about the pension - if you divorced your husbands pension would taken into account and you could normally claim half (although it might be decided that he keeps the pension, you get the house instead of actually spliting the pension as this gets messy). And assuming it was a personal/stakeholder pension it is possible to buy an annuity with a spouses pension so if your husband were to die you would get some. Alternatively as others have suggested you could have a pension each.

Firstly, getting hit by a bus is a problem especially as they never run on time where I live so you couldn't plan something like that.

Secondly, when my sister divorced her first a***hole of a two timing drug taking git of a husband, his pension or part of it was part of the divorce package. I would have scrapped the pension and literally settled for an arm and a leg but then I would run the courts differently if I was in charge. Now if only I could arrange a meeting with him on a bus lane....:cool:

djbd1973

setmefree2 wrote: »

I know what you mean. I've often thought of investing in gold bars;)

I have always wanted to do that but have you seen how much a decent sized bar costs?

A kilo is meant to be around £5k or so.

tubster

I used to think I might die young, what's the point of pensions etc. It might be interesting for you to try and work out what the actual probability of dying young is. Insurers work this out all the time for life insurance policies - anyone got some experience of this? Does the calculation include chances of accident etc? I've come a across a calculator in microsoft money (US edition) that asks a load of questions and comes up with an estimate. Average ages of death are also worked out by postcode, I guess for local government planning. There is another calculator here which gives you the exact date of your death:eek:, but it isn't very sophisticated http://www.deathclock.com/
I also think that I would actually quite like to carry on working in old age doing something social like being a waiter or in a DIY store or something, I don't really see myself sitting about getting bored. Is there anyone in there 70s doing this? Is it OK, or do you get fed up with it?

DickDastardly_2

DD - out of noseyness, what is your business? Sounds interesting!

GettingThingsDone

Hi all - this is an 'easy' question...

It is, in most circumstances, irrational to pay off your mortgage early. do the math. full stop. end of.

However, one can get emotional comfort from overpaying or paying off the mortgage early, and that emotional comfort can help motivate and give discipline to many areas of one's life. Also, if it fits with your 'life-plan', then it may make sense for you.

simple.

gtd

noh

GettingThingsDone wrote: »

Hi all - this is an 'easy' question...

It is, in most circumstances, irrational to pay off your mortgage early. do the math. full stop. end of. ............................................................
gtd

Ive done the maths and fundamentally disagree with your statement.

Nigel

GettingThingsDone

well, then i'm sure that's down to your circumstances then - as i say...

noh

GettingThingsDone wrote: »

well, then i'm sure that's down to your circumstances then - as i say...

It's your use of the word most that I disagree with.
You made the statement that the maths proves that in most circumstances its irrational to pay off the mortgage early.
I disagree and say that the maths proves in some circumstances it's irrational to pay off the mortgage early.

The only rare circumstance where it would not be sensible to pay your mortgage early would be if you could get a higher level of after tax return on your savings at the same level of risk, than you pay for your mortgage. Or if you had other debts at a higher rate than your mortgage it would make sense to pay those first.

Nigel