Mortgage free by 33

ConfusedNHSEmployee · 3 June 2018 at 2:42PM

With 0 help from the bank of mom and dad I find myself about to be mortgage free by 33. myself and the hubby bought our house 5 years ago for 155K with 15% deposit, our mortgage payment is ~£650 and we overpay £1700 to £1900 a month. We went with first direct so we don't incur a penalty for overpayments beyond 10% and we anticipate we will be mortgage free in 2020 when I am 33.
I have recently been successful in securing a new job which will provide additional income of ~£1000 a month after taxes. Other than the house we have no debt and I was just wondering if it would be wise to use the extra money to pay off the house even sooner or if I should start thinking about long-term investment/ putting more into pension?

Thanks.

H.

Moneyfordreams · 3 June 2018 at 6:34PM

Don't know the best answer for that... however you have done amazingly well so for I would go with your gut. :T:T:T

Are you already in NHS pension? If I was in your position with a pension, I would continue what you have been doing, but without a pension, I would consider redirecting some to get a good start.

I'm in NHS pension, but with the new rules I'm 2 years too young to stay in the old pension and have been put in newer one much to my disgust. I will be choosing to add to other financial avenues when I have the mortgage under control

ConfusedNHSEmployee · 3 June 2018 at 6:58PM

Thank you, I am unfortunately leaving the NHS pension on mid band 8a to start a new job with private for almost double the salary. I am on the 2015 scheme as well which isn't as good as the previous one albeit fairer.

Retter · 3 June 2018 at 7:59PM

You already have a pension pot and I assume that you will continue contributing with your new employer. If I were you I!!!8217;d hammer the mortgage and get rid of it. At 33 you will be plenty young enough to think about investments or even another property to achieve your future goals.

ConfusedNHSEmployee · 3 June 2018 at 8:30PM

Yes i will have a new pension with the new job, though i would only contribute 8% compared to the 9.3% with the NHS but on a much higher salary.

I was looking at savings accounts and the best I can possibly get is 5% which feels like peanuts in the grand scheme of things but then there isn't a better alternative.

greent · 3 June 2018 at 8:50PM

You're looking at being mf in 2 years time anyway. I'd seriously consider whacking into a pension and getting tax relief, esp if you've gone into higher rate tax band.

ConfusedNHSEmployee · 3 June 2018 at 9:01PM

greent wrote: »

You're looking at being mf in 2 years time anyway. I'd seriously consider whacking into a pension and getting tax relief, esp if you've gone into higher rate tax band.

I will be in the higher tax rate with circa 80K annual income. Would I need to do that in a private pension or contrbute more into the new job pension before tax deduction? Not sure what is possible.

Mortgage free by 33

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