What do do when you're mortgage free?

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Steve123456789
Steve123456789 Posts: 96 Forumite
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in Mortgages & endowments
I'm sure this has been asked a million times, but I thought I'd ask from my personal perspective. If all goes to plan, I should be mortgage free on a 4 bed house at the age of 32 or 33.


I'm getting a bit ahead of myself, but what would you do?


My plan is to either retire early, around 50ish, at the latest hopefully, or go part time as soon as mortgage is done, and work until whenever I need to.
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  • El_Torro
    El_Torro Posts: 1,463 Forumite
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    Start investing (in pension and S&S ISAs). Arguably you should have done that before paying off the mortgage.


    I'm a bit older than 33, I doubt I would go part time at this age. If you're able to continue working full time and investing in your retirement now then you can always go part time or retire further down the line.


    Of course everyone is different, some might prefer the extra time now, rather than the security of having enough to retire on at an earlier age.
  • RelievedSheff
    RelievedSheff Posts: 11,320 Forumite
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    If all goes to plan we will be mortgage free in 10 years so I will be 45.

    I certainly wont be retiring then or going part time. My pension pot is already quite healthy having invested in it (plus employer contributions) since starting this job 19 years ago.

    I will continue to invest in this as currently but will also look to invest some of our spare money elsewhere so that we will have a very comfortable retirement. We dont want to be watching the pennies when we do retire.
  • Socajam
    Socajam Posts: 1,238 Forumite
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    When I became mortgage free over 4 years ago:

    Increased my savings;
    Setup a DD and gave 30 pounds monthly to Doctor Without Borders
    Start living more freely by travelling and treating myself.
    I am not carrying out repairs that I could not afford.
    Become more generous with others who are in my position: like those in need
  • Steve123456789
    Steve123456789 Posts: 96 Forumite
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    How come you guys wouldn't rather have more time now, when you're young, rather than continuing to work full time until you're older and retiring completely in one go?


    I'm investing in a S&S ISA with Vanguard. I started last month and it's lost 2% of its value already.


    Paying 5% into pension, which employer matches.


    The reason I'm considering part time work ASAP is that I hate work more than I can describe with words.
  • El_Torro
    El_Torro Posts: 1,463 Forumite
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    Steve123456789 wrote: »
    How come you guys wouldn't rather have more time now, when you're young, rather than continuing to work full time until you're older and retiring completely in one go?



    The main reason for me is that I don't know for how much longer I will have good health for, noone does. I'm more likely to be fit and healthy to work full time in my 40s than I am to work, even part time, in my 60s.
    Steve123456789 wrote: »
    I'm investing in a S&S ISA with Vanguard. I started last month and it's lost 2% of its value already.

    That's investing for you, there's volatility involved. If a 2% drop worries you then you're going to have trouble finding a way to grow your money without inflation eroding it.
    Steve123456789 wrote: »
    Paying 5% into pension, which employer matches.

    That's good, though probably not enough to meet your target of retiring young.


    Steve123456789 wrote: »
    The reason I'm considering part time work ASAP is that I hate work more than I can describe with words.


    Maybe a new career would be suitable then? Less drastic than giving up work all together.
  • Dorian1958
    Dorian1958 Posts: 238 Forumite
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    Putting the equivalent of the mortgage Into an ISA each month to help fund children's uni costs worked for me. Made it much less financially painful, (helped by living in Scotland, so no tuition fees.).
  • dano17439
    dano17439 Posts: 366 Forumite
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    Me and my wife are on schedule to pay off our mortgage in 11 months time. We are 44 & 45. I would like to think that we would continue to save what we overpay on our mortgage (currently £2,500 per month) for a little while to build up a nice nest egg


    We have good amounts going into pension pots currently but of course there is always room for more so this is something we would look at


    We've also had our cars for about 3.5 years so probably look to upgrade them at some point


    Take more holidays. Our daughter finishes school in 2021 so we wont be tied in by going in non term time only


    Then the last goal is probably change jobs. We both commute into London and both dislike our jobs. I would like to think that one day we could both get something closer to home with less stress and actually do something we enjoy. of course this will mean less income, but well worth it I think. Bothe been working in London for 20+ years and both had enough!
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    Steve123456789 wrote: »
    I should be mortgage free on a 4 bed house at the age of 32 or 33.


    I'm getting a bit ahead of myself, but what would you do?


    Downsize and make the process even quicker.
    Paying 5% into pension, which employer matches.

    You'll need to increase this level of contribution if you want to enjoy luxury in your retirement.
  • PasturesNew
    PasturesNew Posts: 70,698 Forumite
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    At that age?
    Knowing what I now know?
    Seriously ...?

    Remortgage/upsize to the HILT ...

    It'll hurt at first, but when you're 50 you'll thank yourself as your downsizing at a future point, with a HUGE pot of "free money" will really buy you so much more than just sitting in this free house thinking "haven't I done well".
  • phillw
    phillw Posts: 5,594 Forumite
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    Steve123456789 wrote: »
    The reason I'm considering part time work ASAP is that I hate work more than I can describe with words.

    Do you hate work or hate your job? Changing to a different job that you are already qualified to do would be a much easier switch.

    Otherwise you should look at retraining, but you'll need some money in the meantime.

    A S&S ISA is more a regular long term investment, rather than somewhere you put a lump sum and hope it grows as when the market drops your existing units are worth less but new money buys more units & fingers crossed it will bounce back eventually if it's diverse enough.

    You should set a number of years you will save for and select regular savings accounts or fixed rate savings that will get you the best return until then. If you are able to save enough then you could stagger it so that some money will become available in one year & some in two years.
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