To Overpay or not Overpay the mortgage..that is the question 8 December 2019 at 6:33PM edited 30 November -1 at 1:00AM in Mortgage-Free Wannabe 3 replies 469 views

michaels2411

Interested to get feedback and thoughts from you. I'm really torn, up till now in life i've always been an overpayer of my mortgage but interest rates are so low, i'm now thinking investment is the right way to go.


My circumstances are:
High rate tax payer, already max out my pension of 40k per year and ISA also maxed out, mortgage is now fixed at 1.64% for five years. My LTV is less than 40%



Now I could just continue to overpay my mortgage but i'm thinking 1.64% for the next 5 years is less than inflation.


So what would you folks do or are planning to do during this mega low interest rate period...

kuratowski

It's not an either/or. I do both - some money goes to overpay the mortgage, some is invested.

Want2BeFree

I am also doing a mix of overpaying and investing with the aim of having enough investments to cover all my basic living expenses from the day my mortgage finishes. Thus only having to work to provide luxuries/fun stuff, meaning I can take a more relaxed job or only work a few days a week or work on commissions or fixed period contracts etc.

There is the non-financial reward of paying off the mortgage of the removal of risk - you will always have a roof over your head if you own the roof! Though it is very hard to put a value on this risk or lack there of.

badmemory

It is all down to your attitude to risk. After serial threats of redundancy I wanted to be sure the roof over our (me & son) heads was safe. Then came a larger emergency fund than I had before & then making sure I had enough to live on when I retired. A lot say I had that in the reverse order to what it should have been, but that is all down to personal choice. This was the right decision for me but only you can work out the right decision for yourself.