Mortgage free wannabe, or pension? 1 May 2019 at 7:13PM in Mortgage-free wannabe 3 replies 649 views

lassfarfromhome

Since you are mostly mortgage-free wannabes round here it may not be the place to ask but, here's my dilemma. I'd value opinions from you sensible people

I started with a mortgage of £220k in 2005. It's now down to £50k as I've been paying off as much as possible generally, had an offset mortgage for a while which helped, and absolutely couldn't bear the feeling that I don't own my house outright.

Now that I've got the mortgage down to a less threatening level and I own a lot more of my house than the bank does, I've been concentrating more on building up my pension. I'm a higher rate tax payer so this seems to make sense. Even so, I still feel the mortgage-free itch. I amuse myself about once a day playing with overpayment calculators (yes, I know, I probably need to get out more).

something else to consider: my fixed rate deal is up in two years and I don't especially look forward to dealing with brokers or the hassle of remortgaging again especially when the value of the loan will be around £30k by then. I guess I could take out another offset then.

Anyone have any thoughts to share?

datlex

I am doing both. I pay more than the minimum payments to my pension. I also over pay on my mortgage. Not huge sums for either. But they do say every little helps.

shangaijimmy

Similar ploy as well in that we tackle both. For the last 4 yrs we've been quite aggressive on mortgage op's to get it down to an 'acceptable level'. We're now nudging focus towards retirement to take advantage of the mortgage interest rate being locked in at 1.99% for 5 years. For the next 5yrs we'll pay about 2/3's of extra cash to mortgage and 1/3 towards retirement plans. That should then take us to about £25k left.

lassfarfromhome

Thanks both for your replies. I'm pretty sure I'll also do a bit of both over the next couple of years and see where I get to then. The tax relief on pension contributions makes it hard to resist, but I LOVE seeing the amount outstanding on the mortgage reduce.