Am I too young to be mortgage free?

SDteach

Hello,

I am 34 and thinking of paying off my mortgage before I turn 35. I have money in an ISA and by the time it matures I will be able to pay off my remaining mortgage. My aim is also to have about 20/30k of savings still left over. I am wondering if I am too young to pay off my mortgage and should I keep it all in the savings.
I would love to pay off my mortgage and consider going to a 4 day working week for a better work/life balance. Is this a wise decision? I have been overpaying my mortgage for the last two years and plan to increase and continue my overpayments but I wonder if it is best to just pay it all off if I have the money to do so.

kimwp

It just depends what your goals and plan is and interest rates etc. I would advise to think about the whole picture. I focused on mortgage, then heavily on pension and didn't factor in a bridge to retirement, so didn't optimise for tax. But you can't predict the stock market or long term interest rates, so even though I would be financially better off if I had invested, I'm still happy that I had security in outright owning my house through the uncertainty of the pandemic.

There's no age for being mortgage free - There's just what do you want and do you have the financial situation to afford it. A four day week is ace though, 3-4 is a great balance.

subjecttocontract

I have never understood the wish/need to be mortgage free. When you can spend someone else's money, at the rates currently on offer, to achieve capital growth it's always seemed like a good idea to me. I had mortgages, continuously, between the ages of 21- 65. At one point I had 10 mortgages. But we are all different and there probably isn't a right/wrong approach. Just do what suits you and what you feel comfortable with.

YBR

Emotionally it's great to be mortgage free, and that may be better for you than another approach that is "better" financially. Take some time to reflect on the bigger picture for you (and family if any).

For example.

Consider investing in pensions while it has plenty of time to grow;

You may at some time want to buy a more expensive home and take on a mortgage again can you make that more possible;

How much would you want in savings, and how might you invest the rest?

If you reduce your hours, how possible is it to increase them again should your situation change and the need arise?

Perhaps you'd rather work more to be able to pay for (e.g.) a cleaner or gardener.

tacpot12

I would recommend becoming mortgage free as soon as you can possibly do so. There is no right age to be mortgage-free at, but the psychological comfort that comes from knowing that nothing can cause you to lose you home is very valuable in itself!

It might not be the absolute best decision, in that you might get more in growth if you invet in stocks and share than you are paying in interest, but by clearing your more mortgage, you can invest the amount you would have been paying on your mortgage every month, and so will achieve an averaging effect of your investments. Over time, this smooths out market volatility.

horsewithnoname

being mortgage free is a lovely feeling, but I would still compare the rate of the mortgage with the rate you could get on savings. But there again, having a better work/life balance is priceless, so even if it does save you money, weigh that up against having more time for yourself.
I don’t think there is ever a set best age, just what is best for you.

South_coast

Keeping the money in savings/investments instead of paying it off the mortgage is all well and good, but there's only so much you can stash away each year before the tax man wants a cut. The only place you can really put away a big amount each year is into a pension, and then it's going to be out of reach for over 20 years. Personally, in your position I would pay it off, reduce your hours and enjoy the good life

beanielou

Never too young to be MF.

jimi_man

There isn’t enough information in your post to answer. It depends on so many things, what is your pension situation, is this the ‘forever’ home so you won’t need another mortgage, what your salary is as to how quickly you can build up your savings again etc?

It would be silly to forgo pension saving just to say that you don’t have a mortgage. I have read about people on this board who scrimp and save and live off a tin of beans a fortnight to pay off their mortgage and then do the same to build up a savings pot and then do the same to build up a pension. The reality is that it’s far better to do all three at a slower rate than do one after the other very quickly.

So personally, unless you’ve built up a huge pension, I wouldn’t.

Jemma01

Honestly I wouldn't consider reducing my working hours until I'm MF, have enough pension saved up, enough investments to keep me going. 34 is too young. You'll get to a point when you feel that you're no longer young and can bounce off fast, learn new things fast, etc.

You haven't told us about yourself, your planned family (do you want to have children, do you already have children/ages), your income, your risk calculations (becoming ill, losing your job, contingency...). Savings interest vs mortgage interest. There's so much missing in this post for any advice to be meaningful.

adamL

https://forums.moneysavingexpert.com/discussion/6686804/am-i-too-young-to-be-mortgage-free

You can never be too young. Time doesn't come back. Money can be earned. To me it doesn't really matter how it's done, but working less is key. I personally hope to be on a 2 day week from about the age of 42 onwards. Been on a 4 day week for 15 years already. Will my mortgage be paid off - not quite - but we are talking London sized mortgage - so I'll be extending the term significantly to enable the 2 day week plan. I personally rather work until I am in my late 60's part time, than work full time until I'm 55. But everyone has their own views.