Long time lurker with some decisions to make

in Mortgage-free wannabe
17 replies 733 views
Good morning everyone,,, long time lurker here, 
Ive been making overpayments for the last 10 years on my mortgage, which has spanned accross  3 home moves, our current home is worth just under 500k at current prices i would guess... and being mortgage free will this year be a reality once my tie in period is finished in november this year, as i plan to repay the outstanding balance which by then will be circa 140k....
However im starting to second guess myslelf, its been a target ive set my self since turning 30 to be mortgage free by 40,,, that date has been and gone and i will turn 43 in august, but the reason i am second guessing myself is im half thinking do i continue making the overpayments (1k per month) and invest the money i was going to pay it off with elswhere,, to note i also have a BTL worth around 130k, with a interest only mortagage of circa 40k, (the rent payments are paid off the capital monthly) and no other debt, i like to think im quite savvy with money, and i guess thats probably part the reason i have a niggling to not use the 140k in that way...
FYI i have not come into money its been through hard work and sacrifice, working in some !!!!!! hole countries and offshore whilst spending months away from family at a time off and on... any educated opinions are most welcome. 
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  • L9XSSL9XSS Forumite
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    How good is your pension provision? Are you self employed, contractor or in a company scheme? Either way could you use some of your £140k to pay into a SIPP (I think 40k is the maximum threshold if you earn up to that) and get the added tax benefit on top, 40% uplift if you are a higher rate taxpayer. I balanced the two over the last couple of years, overpaying my mortgage but also significantly paying into a SIPP (Vanguard), subsequently delaying paying off my mortgage by 1 year. (MF target is May 2023).
    You already have a BTL which would make good pension provision however my view would be to utilise that cash proportionately to mortgage and pension. Just my thoughts.
  • powerspowerspowerspowers Forumite
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    I’d get some advice about maximising pensions and go from there. Well done on getting to mortgage neutral. It sounds like your life plans have been moulded round your financial aims, what if you think of it the other way round- what are my lifestyle aims and how do the finances fit into that? It might be slow down or have a nest egg for the family or buy a donkey sanctuary, whatever. You’ve worked hard now make your money work for you. 
    MFW 2021 #76 £5,145
    MFW 2022 #27 £4,670 / £7,200 target 


  • edited 1 April at 2:15PM
    jimjamesjimjames Forumite
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    edited 1 April at 2:15PM
    Personally I'd look to maximise other investments in pension and S&S ISA before paying off the mortgage. Some people prefer to be mortgage free though, even if it's not the most financially advantageous option it can create a sense of freedom.
    Remember the saying: if it looks too good to be true it almost certainly is.
  • hartlepool_jonohartlepool_jono Forumite
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    hi thanks everyone for replies so far, both myself and wife have SIPPs but only to the tune of about 100-110k combined, and i think im probably a bit reluctant to tie in additional money into that now. And my lumper i was using to clear the mortgage is primarily coming from my share isas, which i have cashed in in readiness (when i say cashed in i have sold the shares i had so my money is safe and not at the mercy of the stock market). 


  • hartlepool_jonohartlepool_jono Forumite
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    I’d get some advice about maximising pensions and go from there. Well done on getting to mortgage neutral. It sounds like your life plans have been moulded round your financial aims, what if you think of it the other way round- what are my lifestyle aims and how do the finances fit into that? It might be slow down or have a nest egg for the family or buy a donkey sanctuary, whatever. You’ve worked hard now make your money work for you. 
     with being 15 or so years to pension age i dont think i want to tie more money into pensions, that i cant access if needed. exactly what you say at the end tho, the niggling feeling is by paying off the mortgage the money is not working for me, yes i will be circa 1900 per month better off (mortgage repayment+overpay) though and with that is less stress. i have a couple of hobbies which could give me a small income if i put a bit of effort in (numismatics and horology) and im half thinking to try and focus on that a bit more
  • happymum37happymum37 Forumite
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    A  few questions - do you earn a high wage? If so how long are you placing on working with that level of wage for ?

    If I were you I would probably pay off my mortgage because that's my dream.

     But then I would start absolutely pounding the money into my pension. I would max it out every year if I could. Amy remaining from that would go in long term investment for retirement . The money from the coins and clocks will always be nice but I wouldn't want to retire without a strong pension. 

    Best of luck
    SAHM till 2021. Part time worker.
    Aims- be mortgage free by 2027
                             &
     Plug that SAHM pension gap then...Retire in style in 20 years. 
    MFW - Mortgage £42371 in Jan 2022.
    *mortgage neutral for now until building work commences**.
     Cash savings £42k.
    **I try to overpay to 00 on the end of the mortgage every month**
     Overpayment in June = £13 
    July £ nill 
    August £75 overpayment. 
    Sept - £82.10 over payment
    October- £95 overpayment so far. Mortgage 44300
    November- £95 over payment.  Mortgage 43881. 8yr 11 month remaining. 
    Jan- mortgage 42880. 8yr 9month. Only £105 op so far. Down to £42790 . Took it to 8y 8month.
    Feb- M 42371..  8yr 7 month over pay £100 now 42271
    Mar- M  41855 8y 6m ... then 2k over payment 39855 8yr 2mn

  • South_coastSouth_coast Forumite
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    If you're not keen on paying extra into your pensions (which I can understand), then I would definitely put the money into the mortgage. It's what you've been working towards for all this time, after all. If you could bear to power on for another 2 years then you could also clear the BTL mortgage in full, so then you've got the £1900 plus all of the rent coming your way.

    Then the question becomes whether you need to stay in your current job, could you semi-retire now and live on the wages from a part-time job, plus the rent? Could you set up a small business around your hobbies and live on that, plus the rent? What I'm saying is, you're in a great position already, don't get into a spin about "optimising" the use of the £140k. Plus, paying it off the mortgage would be a guaranteed return - you know exactly what the outcome will be. Well done, you've earned this, now enjoy it. 
    Mortgage start: £65,495 (March 2016)
    Cleared 🧚‍♀️🧚‍♀️🧚‍♀️!!! In 5 years, 1 month and 29 days
    Total amount repaid: £72,307.03

    Finally earning interest instead of paying it!!!
  • hartlepool_jonohartlepool_jono Forumite
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    If you're not keen on paying extra into your pensions (which I can understand), then I would definitely put the money into the mortgage. It's what you've been working towards for all this time, after all. If you could bear to power on for another 2 years then you could also clear the BTL mortgage in full, so then you've got the £1900 plus all of the rent coming your way.

    Then the question becomes whether you need to stay in your current job, could you semi-retire now and live on the wages from a part-time job, plus the rent? Could you set up a small business around your hobbies and live on that, plus the rent? What I'm saying is, you're in a great position already, don't get into a spin about "optimising" the use of the £140k. Plus, paying it off the mortgage would be a guaranteed return - you know exactly what the outcome will be. Well done, you've earned this, now enjoy it. 
    Thank you. Yes I've often though about turning my hobby into something  a bit more.. so that's something I could definately look into. I have always contract worked for the last 15 or so years. So no company pensions or anything for me. And on the coin front I have maybe a collection worth somewhere around 50 to 70k at a guess possibly more, watches I have a few but swap and change and buy and sell as I see oprtunities... and I know I could monetise that all better. I guess for me I need to sit down  and work out how much I need. And with 3 kids at ages 10 15 and 16. I'm guessing it will be around 3.5k per month.. all I know is the appeal of working away is lessening with each year that passes. Don't get me wrong I'm totally thankfull. It's gave me snd my family a great life, but now I'm questioning the value of being in my own bed on a night all the time. I'm lucky to have options that's for sure  
  • killerpeatykillerpeaty Forumite
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    Sometimes you feel doubt when you're about to make a big change even if you have been working towards it.

    Personally speaking, given what you have said, I would pay off the mortgage and then put the mortgage payment into pensions until I go part time. Then reassess. But it doesn't matter because what I would do is meaningless for what you will do.
  • hartlepool_jonohartlepool_jono Forumite
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    That makes sense. I guess short term. I keep working. Keep building up savings. Then towards end of year see where I'm at money wise and track my buying and selling of coins and watches to gauge what income I can get from that
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