Do we pay the mortgage off?

Out,_Vile_Jelly

I would pay it off for the psychological factor of owing no money to the bank. You'll soon build up some decent nest eggs without the monthly repayments.

Cakeguts

Pay the mortgage off and then make pay the amount of the old mortgage repayments into a saving account. You have got used to paying the mortgage each month so you have learned how to live on what is left.

Grenage

I would probably continue as is, and put the money into an investment plan for later life - but what we would choose is rather irrelevant.

Jonbvn

Personally, I would not pay it off, but consider investing the money. However, it does depend on what mortgage interest rate you are paying.

As an example. you could put £20k for you and your OH into S&S ISA's now, and the same again in the new tax year. That is £80k accounted for. Add Junior S&S ISA contributions for your kids accounting for another £16k. After that you should be looking at improving your pension provision.

As an alternative, particularly if you are undecided, or it is unclear which is the best option, instead of thinking in binary terms (mtg or investing) consider doing both. I.e. Pay down some of your mortgage and invest the rest.

[Deleted User]

I'd pay off the mortgage, I know what i'm like and i'd fritter it away otherwise, new car, holidays etc.

You always need a roof over your head and if you lost your jobs tomorrow you'd be secure. If you put it into pensions you'd have to wait years to gain access so in an emergency maynot be ideal.

saajan_12

Unlikely you'd receive more interest in a savings account than you pay through the mortgage and with your fixed rate ending, your interest payments will rise with bank interest rates. So any other investment would be stretched to return more than your mortgage rate without being very risky.

Re moving to a bigger house
- Do you want / need the extra space? Unless you are currently cramped or the new place is in a better area / layout, simply going bigger is unlikely to add to your quality of life.
- Marketing/Selling/Viewing/Solicitors/Buying/Removals are all a stress so the new place has to improve your life enough to be worth all that.
- EA fees/Solicitors/Valuations/StampDuty/Removals are all a big cost which may eat into your new found funds so you may have a smaller deposit for the new place than expected.

spendinglikemad

I know you have probably made the decision to pay it off - can I just add.....we were in a similar situation mid forties, 2 teenagers - rather than being gifted cash we had managed to save a pot of cash from bonuses etc to have sufficient cash in easy access savings to pay off our mortgage and we also have reasonable savings (not currently accessible) for the kids future needs

Over Christmas we were thinking of paying the mortgage off as we had been making overpayments and had been focussed on doing this....however suddenly our dream house came on the market and we had the dilemma of going for that purchase and increasing mortgage rather than have none. We have opted to go for a new house as we feel we have outgrown our current property (lived here 19 years) and as we still have very well paying jobs and career progression prospects it feels like the right time, we thought if we left it longer then we wouldn't be able to afford the property we wanted. Its more to invest in for our future but its right for us and being at our age with current jobs allowed us to get the new mortgage. Our other option was to think about investing in another property which may be an option to think about. A good savings pot is essential for either of these options i.e. all the costs associated with moving and extra stamp duty for second houses.

I think it depends on whether you can see yourself living in your current property for another 10 years maybe. There is also the risk that you may not want to or be able to work in 10/20 years time - which we have had to consider but who knows...

SLM

HouseBuyer77

Probably one for the savings & investments board. A couple of thoughts:

With current mortgage rates being so low you can make a better return by investing the money. However this requires careful management and you run the risk of mortgage rates shooting up just as the value of your investments go down (so you want to cash-out to pay off the mortgage to avoid the higher rates but end up making a loss on your investments to do so). Simply paying off the mortgage now is certainly the easy, low-risk option. It may not be the best option in terms of maximizing your wealth but it can you a far simpler life financially.

Pensions: We both are paying in 10% of salary... (wife has a contribution-match scheme) but we could be saving into lifetime isas etc on top (with the monthly mortgage payment disappearing)

Any particular reason you want to pay into a LISA rather than just increasing your pension contributions? Paying more into a LISA may be the better option but do have a think about it.

Edit: You can also go for a half-way option, pay off a good chunk of the mortgage and invest the rest. How far you are away from desired retirement age is also a factor.

Sea_Shell

Another vote here for paying the mortgage off. If not totally then most of it. The feeling of knowing your house is yours is great, and if you then save what you were paying each month, you'll soon have a lovely next egg on top!!

As to where/how to save/invest....well that's where the fun starts!!!

hazyjo

My MIL says the best thing they did was pay their mortgage off when they moved. They just felt liberated.


I have always maxed out and upped my mortgage when I've moved and always thought I would - but we've a chance to move to a slightly cheaper area meaning we'll be nearly mortgage free. I'm very happy about it.


So long as you're okay with the house size and it's a happy home, that's all there is to it. I'll be moving to a house pretty much the same size as what I currently have (but with a driveway, bigger bathroom and downstairs loo). Your house looks like a decent size - what more could you want if yours is 4 bed and detached - so I'd not rush to move. Bet if you look, you might gain a couple of feet on each room and more outside space, but does that really compare with having no mortgage?


Good luck


Jx