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

setmefree2

"Centenarians reach a record high"


Many are now seeing three figures

The number of people living beyond 100 years has reached a record high in England and Wales, according to official figures. The Office for National Statistics says there are now 9,000 "centenarians" - a 90-fold increase since 1911.
Estimates suggest this will carry on rising to 40,000 by 2031."


BBC 28th September 2007


That would make a pension a good bet...

djbd1973

setmefree2 wrote: »

That would make a pension a good bet...

And it would be a good reason for those who don't have a backup plan to continue working in some capacity long after 65, or 68 years of age.

djbd1973

Dithering_Dad wrote: »

I work as an I.T. contractor doing SAP HR.

I'm also at a loss as to why it's "irrational" to pay off your mortgage. I'm a high rate tax payer and so once my Cash ISA allowance is used up, I would struggle to find another savings vehicle that (after tax) gave me the same return as paying off my mortgage - currently 5.75% tax free.

I also work on a temporary basis so having a low monthly mortgage (or no mortgage at all) to pay means that I can ride out any downturns that may happen.

I calculated that I will save £93,000 on mortgage interest if I manage to pay off my mortgage by the end of our three year challenge. Irrational?

Paying off my mortgage early is definitely not irrational for me and the maths in definitely in my favour in my circumstances.

DD - I take 'HR' as Human Resources but what is SAP (Apart from the answer to a question in this years round of Christmas Trivial Pursuit that I will hopefully now have the answer!!)?

DickDastardly_2

Dithering_Dad wrote: »

I work as an I.T. contractor doing SAP HR.

WOW!:eek: :cool: What exactly do you do though, I dont understand the SAP bit, I assuem HR is human resources? Sorry to be nosey but other people's jobs fascinate me!

djbd1973

Dithering_Dad wrote: »

SAP is the name of the software company that created the business software that I help companies configure to match their own business processes. It costs £0.5M just for the software, so only the larger companies have it (microsoft, Heinz, lots of goverment departments & councils, ICI, etc).

To give you an example of what I do, I worked at a large manufacturing company for a year and redesigned all of their Human Resource business processes to make them more efficient (i.e. Their recruitment processes, definitions of short and long term absences, terminations, etc) and designed an interface to their payroll system.

Thanks for the explanation. At half a million, I can see why you wouldn't be able to pick this off the shelf at PCWorld... even in a sale.

The work you do sounds very complicated and must be very worthwhile. No wonder it generates the sort of income you get. Excellent stuff

GettingThingsDone

Exactly my point

For some people, paying off the mortgage early is a completely rational thing to do - for the majority (ok, for a 'large number of people') it could be argued that it is a bad investment decision and diverts resources from better choices.

I'm not going to go on, as I know this issue has been debated repeatedly. I'm not knocking people paying off their mortgage early as there are benefits. But it completely depends on your circumstances - your age, your relationships, your future expectations and desires and what actually happens over time, as to whether it is actually the best choice.

As you say, you've done the math, and it works for you. However, it is such an easy decision to make 'to pay off the mortgage early', that many people may be doing it without considering fully the other options.

gtd

maxmycardagain

its rather a curious world we live in,

the accepted/preferred/upfront thinh to do is work, pay your taxes, pay your national insurance, save hard, pay your mortgage.

the bank of england print the cash of, let you earn it then want you to store it in a bank vault, and you can keep working and saving.

all the time amassing £20 notes (sort of) back with the people who printed them via the bank clearing system.

in point of fact, you hold nothing except a balance on a bank pc screen.

so the money has gone full circle back home.

whats the point in amassing money, hoarding it (under the bed or in the tommy tank) ?

its for spending!

to bring enjoyment!

remember this?

http://www.youtube.com/watch?v=LEe-5aXACI4

GettingThingsDone

DD - out of interest, did you decide your strategy based on the best advice, or have you gone it alone?

Anyways. I don't intend to pay off this mortgage but I'll pay the next one off early...

gtd

DickDastardly_2

maxmycard, I really dont get it..? If I am right from your other posts, you have debts right? So at some point your philosophy has got you beyond your means, yes? So how do you now argue that its okay to spend purely for enjoyment and ciritcise savers?

Curious indeed..

noh

I agree that money is only for spending.
By saving money using all means at my disposal I maximise the amount of money I have and therefore the amount of enjoyment gained from spending it. Also I am able to ensure I have money available to spend and support myself whatever my income from employment may be.
Any debt you take on now is borrowing from your future self.

Nigel