Is paying off your mortgage worth it?

northerner999

This is a debt-free wannabe forum so the most obvious answer is yes, in a pure debt-busting mindset it makes more sense to pay off your mortgage so long as the interest rate is higher on the payments than you are earning in savings. 

Of course we all know it is much more complicated than that, even without taking into account how different the world looks now as we adjust to a post-pandemic life.  I don't think you're really after financial advice, but for what it's worth having a solid emergency fund right now gives you most short-term security and flexibility, but having less debt gives you more long-term security and options. 

Your question is black and white, but the only solution for you will be a shade of grey. if you're unhappy in your job there are a number of options that are not as drastic as taking yourself out of employment altogether. What's to stop you looking at other employment opportunities? There are recruitment agencies who place people in short-term roles, but as we don't know your skills or CV it's hard to offer much useful advice on that front.

About a decade ago I made the decision to quit a job which was making me unhappy. My friends all advised against it, but it worked out well as after a few months to recharge I was invited back to a previous employer to help out on a day by day basis, which turned into a weekly basis, monthly basis and, well, you can probably guess that I went on to become full-time staff again and spent a good number of years there.

Ultimately the decision has to be whether the job you currently have is actually making you unhappy / ill, in which case health comes first. If it's just not as exciting as it could be, well suck it up for now but make a plan to change things. This could be looking for a different role, reducing your hours, or simply going through your finances and finding ways to maximise the effect (if you can overpay your mortgage, as your posts suggests you can afford to at least, then why not consider this as a first step towards planning an early retirement).

squirrelchops2

I was fortunate enough to become mortgage free at the age of 40. It has given me such incredible freedom in terms of I could leave a job that made me very unwell and take on jobs that are much more fulfilling but pay a lot less as I don't have that huge expenditure of a mortgage every month. My OH contracts so has always had longer holidays and it has worked well that I have been between jobs on a couple of occasions in the last few years so we have been able to just take 6 weeks away at a time and not be also having to find the money to cover the mortgage for that period without an income.

Matt8888

I genuinely don't understand the question. If you really mean you want to retire, but don't even have enough savings to pay off your mortgage, then you need to keep working, and then some... Sorry if I am not getting the point here.

IrishSean

I paid mine. Borrowed £60k 20 years ago next month. 
Was rubbish with short term debt & savings but over paying then clearing 1 year early means we own home outright (massive security in a covid world). 
Once shortterm debt is gone we'll have dds of just £225 a month later in the year.
Make sure you have a decent emergency fund, then pay mortgage as likely to be more than youd make in savings, once mortgage goes max savings as most likely rates will be better by then. Remember low rates now means overpayments are almost pure capital repayment. 
My goal is a buy to let, I might take a small mortgage & let renters pay it off then use it as  pension house in 20 years time. 
GL whatever u decide.

white-rabbit_2-2

Thanks everyone for your thoughts it’s given me more to think about. Given the last lockdown news I’ve got more decisions to make about what is important.

enthusiasticsaver

I think whether you stop work depends on a number of things and not just your mortgage. I have left a job I hated and which was stressful and retrained so I would never advise staying on in a job which was detrimental to your mental health.  However you need to be realistic and you have not given any details of how long the savings would last, how big the mortgage is and how your partner (if you have one) feels about you giving up work without another job to go to.  Difficult in this economy I know but not impossible.
Have you explored dropping hours initially to perhaps help you find something which would fulfill you better and is the job actually causing you stress or do you just have work fatigue which is very common at this time of year?  In these days  of low interest rates I  don't think paying off your mortgage is perhaps as important  as it would have been when interest rates were higher but savings rates are not good either so if you are sitting on a pile of cash earning 0.10% and paying 2% on your mortgage it makes sense to at least pay some off while leaving yourself a decent emergency fund particularly if you are considering giving up work.  How would you live though? Presumably you have other bills and living expenses?  How long will the savings last if you do not pay the mortgage off and what is the plan with income? 

sharpe106

white-rabbit_2-2 said:

We have savings which would pay some of our mortgage off but not enough to let me stop work. If I kept the savings I could potentially stop work. Is the freedom of being mortgage free worth sticking at a job I’m not fulfilled in?

Although you say you have savings, you technically do not, you still owe out more money then you have. So even though you might have a pot of money that you call savings it is not actually savings you still owe it the bank.

 It makes no sense that you say you can’t afford to stop working if you put the money towards the mortgage now but if you keep the money you can. I think you need to have another look at the sums you did to come to that conclusion.

Your best option would be if you do not like your job as others have said is to get another job.

CapricornLass

I think you need to split this into two and treat them as two different problems.

I don't think its worth staying in any job that you find unfulling.  That said, this is not an easy time to switch careers, or even to find a new job.  With the job market being as it is, perhaps you could continue working in this unfulfilling job until the market gets better and use the time to plan out exactly what your new career/job is going to be, and whether you are going to need things like retraining or new qualifications, and, of course, polish up your CV.  

With regards to the savings, you obviously need to keep a good emergency fund  to hand, whether or not you have a mortgage.    However, once you have that, there is no reason why you couldn't use at least some of what would have been added to savings to make overpayments on the mortgage, so that it gets paid off earlier. 

fimacdoodle

Personal choice given interest rates. I am just dealing with your basic question. I was lucky to be able to make that choice a couple of years ago, and for piece of mind, I paid what little there was left off. I had other saving though, and a job income. It enabled me to have more collateral for some buy to lets, to keep as an income, and encourage the lenders to fund my plans.

Vikipollard

We paid off our mortgage last year - 2 years before the fixed term we had would have finished.  It is an amazing feeling, particularly with the uncertainty around jobs that even the safest sectors still feel.  We overpaid by 60% each  month for four years to clear it as I need the security of knowing I have a roof over my head.  Bit paranoid, but I've had some money challenges in the past.

We now have three debts left, all of which will be paid off within 2 years - before if I have my way.  18 months £338 at 0% for DH's motorbike, 18 months £138 at 5.9% for DH loan (which we will be throwing money at - he just doesn't realise it yet), and 22 months £203 at 0% for the kitchen.  All of these are unsecured so in the event we had to, the motorbike would be sold to pay off the remainder, and we would be able to service the kitchen/loan.

The mortgage money is now saved, on top of pre-existing monthly savings, with a view to being in a position to retire early.  The money DH is saving on diesel (200 miles worth a day) through enforced working from home will be thrown at the small loan first.  Personally, I'd overpay on the mortgage and find a job you prefer, but I don't know your full circumstances.