Paying off your mortgage

Thrugelmir

Rosemary7391 wrote: »

I think there's a lot to be said for the security aspect of it - losing your income doesn't mean losing your home because you're unable to pay the mortgage. That might override other financial concerns for some.

As one gets older the chances of getting another well paid job do diminish. I'd put being mortgage free high up the list. Particularly if the role offers no guaranteed security. Redundancy can strike just when least expects it.

saajan_12

TBagpuss wrote: »

overpaying the mortgage means I have a cushion in place - if we had a lean year I could cut (or in a really bad year, stop) my mortgage payments, without going into arrears.

Are you sure? Ofcourse I don't know your specific mortgage terms so I may be way off, but often your overpayments go to capital if you've paid the min payment that month, and you still have to pay the interest on the balance each month/year after an overpayment. In that case, you would still go into arrears unless you got a specific payment holiday from the lender.

ChasingtheWelshdream

We recently upped-sticks and moved 300 miles in order to get a larger house and pay off our mortgage whilst in our 30s. :beer:

Although there were many factors in our decision, being mortgage free was the main consideration. It has enabled us to live much more flexibly - working less because we now don't need the income to cover the mortgage.

Planning for retirement is on our 'to do' list as I no longer have a full-time job with regular pension payments. I have a LGPS pension, which I will start making extra payments to in compensation of my lost income. But the sense of 'freedom' is enormous.

So yes, for us it is one life goal achieved.

TBagpuss

saajan_12 wrote: »

Are you sure? Of course I don't know your specific mortgage terms so I may be way off, but often your overpayments go to capital if you've paid the min payment that month, and you still have to pay the interest on the balance each month/year after an overpayment. In that case, you would still go into arrears unless you got a specific payment holiday from the lender.

Yes, I'm sure

tori.k

I'm already saving for paying off the mortgage we are in negotiations for at the moment, I do add a little token extra to my pension each month, I have my cake and want to eat it too, mortgage is a debt just the same as credit cards and any sort of loan, my life is not my own until it's paid off ( ok that may be an illusion to the pedant) we maybe better off paying extra to the pension but I rather have the flexibility in life sooner rather than later.

LadyGMadameToThee

All this talk of pensions is laughable. Many people never make retirement age (or don't live very long into it) and only those in executive positions or in the public sector have worthwhile pensions. I'm investing in property, antiques and collectibles.

tightasagnats

LadyGMadameToThee wrote: »

All this talk of pensions is laughable. Many people never make retirement age (or don't live very long into it) and only those in executive positions or in the public sector have worthwhile pensions. I'm investing in property, antiques and collectibles.

I'm not sure where you live in the world but people live well into their pensionable years these days (source: ONS)

Main points
A newborn baby boy could expect to live 79.1 years and a newborn baby girl 82.8 years if mortality rates remain the same as they were in the United Kingdom in 2012–2014 throughout their lives

In 2012–2014, a man in the UK aged 65 had an average further 18.4 years of life remaining and a woman had an average further 20.9 years of life remaining

The most common age at death for men was 86 and for women was 89

DumbMuscle

Thrugelmir wrote: »

As one gets older the chances of getting another well paid job do diminish. I'd put being mortgage free high up the list. Particularly if the role offers no guaranteed security. Redundancy can strike just when least expects it.

But if you can make more interest on savings than you would pay on the mortgage, there's no reason to overpay the mortgage in advance rather than pay it off with the savings only when you need to. You're just throwing away the chance at more savings income for no real security If your savings are less then the mortgage, then you have no security whether you put them towards the mortgage or not. If they are more, you are fine whether you pay the mortgage off early or not. Depending on your mortgage terms, you may be better drip feeding the minimum payment to give yourself time to find a new income source, rather than paying in advance and then still needing to find the minimum payment when you lose your job to avoid repossession.

Pixie5740

LadyGMadameToThee wrote: »

All this talk of pensions is laughable. Many people never make retirement age (or don't live very long into it) and only those in executive positions or in the public sector have worthwhile pensions. I'm investing in property, antiques and collectibles.

How are your investments in property, antiques and collectibles working out for you? Are those investments out-performing your pension?

ReadingTim

LadyGMadameToThee wrote: »

All this talk of pensions is laughable. Many people never make retirement age (or don't live very long into it) and only those in executive positions or in the public sector have worthwhile pensions. I'm investing in property, antiques and collectibles.

Good luck with that - of the 3 you list, only property provides a steady stream of income. The others, while their value may increase, will only see that value realised when the asset is sold. And what happens when the antiques have all been sold, and the collectables now collected by someone else? Poverty in old age - doesn't sound very laughable to me.

Secondly, why do you think the state pension age has just been increased? Precisely because many more people are living well into retirement age - in fact far more than the system can afford.