To pay off mortgage before retirement, or not?

LHW99

What about a bit of both? Pay a large part of the mortgage off from the ISA at the end of the fix, and take a short fix for the remaining amount?

That retains your emergency funds, reduces the mortgage payments after 2027, so the extra can be ploughed into savings or pension, and still gets the mortgage gone by 2029 when you want to retire.

Kernowshep

I'd consider doing a 5 year fix, whilst cycling the monthly savings through regular savers, then either pay that into a sipp or ISA or off the mortgage each year depending on which made most sense at the time (or a combination of all 3). It gives a bit more time to build up an emergency pot.

Your take home income at 60 is pretty much what it is now with the higher annual amount, so you should be able to cover the payments based on current rates (and you have a £49k + £30k to offset against the debt + some regular saving buffer, assuming your spending won't rise much). P.S. If you've got full state pension to add, I'd consider a 10 year fix, because you'd potentially have take home income of another £10k+ p.a. by the time that ends.
P.P.S. Can all the DBs be taken at 60 unreduced?

I appreciate you might just want the mortgage gone though.

MX5huggy

I’m keener on a more aggressive strategy to potentially increase your wealth. 

Presuming your mortgage is low loan to value ratio say around 25%. Start paying £500 to £1000 a month in to a SIPP instead of the £400 into an ISA. To afford this you will eat in to your ISA savings. The SIPP is 6.25% better than the ISA (20% taxpayer). You’ve got to choose an investment in the SIPP, you can take a risk because with the DB’s basically are your low risk investment / cash equivalent. 

Inflation will then do its thing reducing the mortgage. 

Here’s one video on it https://youtu.be/L4sy1f8Q4YA?si=jSxo2cHX099LF3m7

BridgetTheCat

LHW99 said:

What about a bit of both? Pay a large part of the mortgage off from the ISA at the end of the fix, and take a short fix for the remaining amount?

That retains your emergency funds, reduces the mortgage payments after 2027, so the extra can be ploughed into savings or pension, and still gets the mortgage gone by 2029 when you want to retire.

Isn’t that like the worst of both worlds though? Using up a chunk of savings (and future interest) and still not being mortgage free?

BridgetTheCat

MX5huggy said:

I’m keener on a more aggressive strategy to potentially increase your wealth. 

Presuming your mortgage is low loan to value ratio say around 25%. Start paying £500 to £1000 a month in to a SIPP instead of the £400 into an ISA. To afford this you will eat in to your ISA savings. The SIPP is 6.25% better than the ISA (20% taxpayer). You’ve got to choose an investment in the SIPP, you can take a risk because with the DB’s basically are your low risk investment / cash equivalent. 

Inflation will then do its thing reducing the mortgage. 

Here’s one video on it https://youtu.be/L4sy1f8Q4YA?si=jSxo2cHX099LF3m7

Yeah but I have no interest in babysitting risky investments. I just need enough to cover food, clothing, shelter and a few art supplies for 20 years or so. I won’t be passing on any generational wealth - no spouse, children or siblings (therefore no nieces or nephews either) - so I plan on spending what money I have in retirement.

LHW99

BridgetTheCat said:

LHW99 said:

What about a bit of both? Pay a large part of the mortgage off from the ISA at the end of the fix, and take a short fix for the remaining amount?

That retains your emergency funds, reduces the mortgage payments after 2027, so the extra can be ploughed into savings or pension, and still gets the mortgage gone by 2029 when you want to retire.

Isn’t that like the worst of both worlds though? Using up a chunk of savings (and future interest) and still not being mortgage free?

But if you then make extra payments to your work pension, you would get the HMRC tax relief added. The added pension when you come to retire would compensate to an extent for taking it earlier than NRA (possibly your active DB would only be payable unreduced at state pension age?).

Since DB pensions also tend to have some degree of guaranteed increase when in payment (worth checking) that may make you better off after a few years than relying on interest from a cash ISA which is not guaranteed, and will probably drop, at least in the next year or so.