Better utilization of money?

Sea_Shell

In hindsight (which is a wonderful thing), we would have probably been better off NOT to have paid off our mortgage, which was about 12 years ago now, seeing how rates have now dropped. However, we were able to then save that spare money and now have a lovely next egg too.

The feeling that having no mortgage gives, to us, is worth its weight in gold, and gives you freedoms that you wouldn't otherwise have, with regards the type and amount of work you NEED to do going forwards.

I can also see how being "Mortgage Neutral" would also give a similar feeling, knowing that you COULD pay it off tomorrow if you needed to, similar to Stoozing CC's (which we do do)

Audaxer

msallen wrote: »

Each to their own, but I'd rather have (for example) 120K but owe 100K on the mortgage, than 10K and no mortgage.

Yes, but if the £120k was invested and after an equity crash the value had dropped to £80k or less, you may be wishing you had paid off the mortgage. While you might be better invested in the long run, for a lot of people it's a better feeling and less stress to have paid off the mortgage when they can.

AnotherJoe

I think DQ's suggestions are excellent, take a sensible middle way between the all or nothing approach you get for example in the mortgagefree wannabe forum or advice to put every last penny into a pension.

Nudge3

I personally have decided not to pay my mortgage off and I invest for the long term and also hold a percentage of my net worth in cash/liquid assets in case of an emergency.

I highly doubt we are ever going to see 12-14% interest rates again but if you feel like it's a possibility you may be better off paying down your mortgage.

I would say you need to think about your individual circumstances, risk appetite and make a decision accordingly.

Best of luck

Peelerfart

Excellent post diary queen! There are difficult choices to be made when trying to do what's best.

I personally agree with you.

Having come from the MFW board, the feeling of accomplishment is unmatched.

I/we nearly lost the family home several years ago due to a redundancy situation. It never happened, but the shock was sufficient to concentrate our efforts on finishing the mortgage.
With hindsight, could we have made more investing? I'll never know, nor frankly, do I care.

DairyQueen

Peeler: I don't care either.:beer:

Thrugelmir

Nudge3 wrote: »

I personally have decided not to pay my mortgage off and I invest for the long term and also hold a percentage of my net worth in cash/liquid assets in case of an emergency.

I highly doubt we are ever going to see 12-14% interest rates again but if you feel like it's a possibility you may be better off paying down your mortgage.

I would say you need to think about your individual circumstances, risk appetite and make a decision accordingly.

Best of luck

While you might not see interest rates at those levels. You might not experience the same levels of investment return in the years ahead as well.

justme111

cs90 wrote: »

Just m

I've seen people say it could be better to invest rather than overpay mortgage. Would this still apply if I'm paying 3.5% interest but VLS80 from tax year 2017-2018 was only about 1.7%? I'd assume it would have been better this past year to overpay rather than pump little savings into my ISA?

You are right. I think the general statement is used because the average increase in value of the investments was about 4 or 5% after inflation throughout the last century. While your mortgage rate is 3.5 Including inflation. Was increase in VLS you quoted before or after inflation (in real terms (? If it was in real terms then with inflation about 2.7% it was 1.7%+2.7% =4.4% against your mortgage rate being 3.5%, ie still better.
Having said that I still overpay mortgage the rate on which is half of yours. There is only so much risk of investments halving their value that I can take.

Tom99

[FONT=Verdana, sans-serif]VLS80 went up 5.29% in the past year not 1.7%, that might have been the dividend. It went up 19.55% the year before.[/FONT]
[FONT=Verdana, sans-serif]Remember VLS80 is 20% bonds which many investors think will decline in value over the next few years [/FONT]
[FONT=Verdana, sans-serif]VLS100 which is all equities went up 6.83% in the past year.[/FONT]