Mortgage almost paid off - now what?!! 10 September 2022 at 12:42PM edited 10 September 2022 at 12:55PM in Over 50s MoneySaving 25 replies 2.2K views

igiiroko

Hi. An infrequent MSE user, I’m about £5k away from paying off the mortgage on a 3-bed end-terrace house — and I’m somehow terrified! Are there downsides to paying off mortgage? I saw a discussion that said lenders like to know you owe money to other organisations: could being mortgage-free get in the way of deals for car, holiday home or daughter’s university costs?! Many thanks in advance…

MovingForwards

No it won't make any difference, if anything it increases affordability as it's one less debt you're paying each month.

RobM99

Interest rates will probably go up - so personally, I'd be WOOHOO!

Silvertabby

The only downside to paying off our mortgage were our hangovers the next day!  

PennyForThem_2

You can always check your credit rating - I sometimes take out interest free loan on a purchase of a big item so that there is a record of being able to pay regularly and on time.  Have  DD set up to pay off CCs each month so don't miss payment which couldflag up against credit score.

Farway

I never found any downside, and as others have said with interest rates heading up you will be able to ignore it all

blue.peter

IME, it's a wonderful feeling to have the mortgage paid off. I was so used to living with the mortgage that I hadn't realised what an emotional weight it was.

I haven't found any downside. I have no trouble obtaining credit cards when I want them. Although I have no need of any other loans, I seem to get bombarded by claims that people would want to lend me money whenever I log on to Clearscore or Credit Karma. I take those claims with a large pinch of salt, but, given my credit card experience, am still inclined to believe that I wouldn't have difficulty borrowing if I wanted to. I do have a perfect record of paying my credit cards off each month, which I'm sure helps.

tacpot12

There are no downsides. It's a great feeling to know that your home is yours and that you can never lose it.

Enjoy the moment, and plan what you will spend your excess income on in future. I put most of mine into my pension, but did also have a nice holiday that year. 

Kim1965

I owe £168 on my mortgage, ive been paying off small payments £101pm for a few years to avoid an early redemption penalty. I cannot think of any downsides.
 On the subject of credit history, I recently bought a new computer, initially the store talked me into a store card (extra discount), then said i had been refused because of an inadequate credit history! I have not used a credit card or had credit for 15 years i guess. Is this a problem? 

igiiroko

Many thanks, @MovingForwards, @RobM99, @Silvertabby, @PennyForThem_2, @Farway, @blue.peter, @tacpot12, @Kim1965. Feels strange, and almost "wrong"! 

PennyForThem_2

Kim1965 said:

I owe £168 on my mortgage, ive been paying off small payments £101pm for a few years to avoid an early redemption penalty. I cannot think of any downsides.
 On the subject of credit history, I recently bought a new computer, initially the store talked me into a store card (extra discount), then said i had been refused because of an inadequate credit history! I have not used a credit card or had credit for 15 years i guess. Is this a problem? 

Yes - if you want credit - only because you have no history for 15 years of having credit.  That is why I buy interest free loan from time to time.