Should I pay off my mortgage? Discussion area

mrs_motivated · 1 February 2013 at 8:40PM

phantomfreckle wrote: »

I am a higher rate tax payer and have been a £150,000 interest only mortgage on a variable interest rate. I am going to increase this by £40000 to carry out some building improvements.
so my question is should I make over payments of £500per month into my pension and take the 40% tax relief on my payment or make the over payments against the mortgage

Good question, I would be interested in people's views as I am a higher rate tax payer and have recently been contacted about increasing my contributions. My mortgage is £150k too, fixed at 4.29 per cent, on a repayment basis

womble12345 · 1 February 2013 at 10:53PM

Thanks, i think i will try and get them to stop reducing my normal payments. Thanks for the tips.

michaels · 2 February 2013 at 11:48AM

mrs_motivated wrote: »

Good question, I would be interested in people's views as I am a higher rate tax payer and have recently been contacted about increasing my contributions. My mortgage is £150k too, fixed at 4.29 per cent, on a repayment basis

I have been trying to overpay mortgage but next tax year I am instead going to salary sacrifice a lot to my pension more becuase of the child benefit / tax credits advantages of a lower income than due to the tax benefits of the pension...

DrewP · 7 February 2013 at 11:10AM

DMISER wrote: »

I have a part re-payment, part interest only mortgage on a fixed rate.

If I were to pay off a lumpsum amount, which part of the mortgage would it be best to allocate it to ?

Any advice gratefully received.

Hi Dmiser, did you ever get any answer to your question above ?

I am in a similar situation, small part Repayment and larger part Interest Only. With the endownments never going to repay enough, I have been putting my overpayments against the capital of the Interest Only part with the idea that there would be less to pay back when the Mortgage matures. However every time I go into the Building Society to do this they look at me as if I am weird. I can see no Net difference in the amount of interest to pay, but still wonder if there are advantages or disadvantages (other than the one stated) that I am clearly missing.

Many thanks for any advice.

DrewP.

giveusaclue78 · 20 February 2013 at 2:11PM

I have a repayment mortgage with 19yrs left. It is made up of 2 loans, a larger amount with very low 1.45% rate and slightly smaller amount at 4.99%.

Whenever I get my mortgage statement I am livid (like everyone with a mortgage) how little actually is paid off due to interest. I WANT IT PAID OFF EARLY.

Please note I also have life insurance that decreases in line with the mortgage.

Do I ..
A) Pay as much as I can extra each month off the mortgage even if £50?

Pay the extra £ into an ISA then pay off a lump sum near the end of the mortgage term.
C) Pay the extra £ off the mortgage each month and take out lump sum life insurance (rather than my current decreasing).

I am very conscious that currently if I (or my husband) die then the mortgage is paid off anyway so paying extra each month would be "dead/wasted" money. But (hopefully) if we dont die in the next 19years we could have paid it off early and saved us £.

HELP.

clairebean · 20 February 2013 at 11:17PM

We are confused! We have a 3 year fixed rate mortgage with Santander and are considering overpaying by about £500 a month. We are 1 year into the 25 year mortgage but we are also probably going to move in 2 years.

We've just done some calculations and it looks like overpaying will save us £12.5k, but we will be overpaying by £12k over the period. So not actually saving any more than we are overpaying. Are we missing something??!!

houseandflatstorent · 27 March 2013 at 6:46PM

I think you should always pay of your mortgage if you have house and flats to rent out or you have a mortgage it is always better to finish paying off the mortgage as quick as possible

Summer25361 · 18 April 2013 at 6:30PM

I have recently been overpaying my monthly mortgage payments by £500. I recently received a letter from the bank to say my monthly payment has been recalculated and my monthly payment will be less each time I over pay OR I can reduce the mortgage term. Which is the best one to do?? Any suggestions much appreciated!

SweetSuPee · 7 July 2013 at 10:53PM

osomdarling wrote: »

Hi,
We have a mortgage of £59000 outstanding on a £250000 house and we want to move house. We also have substantial amount in our saving which can pay off the mortgage. Our main concern is that, should we pay it off, we may not have credit with lenders as we wouldn't have a mortgage. Do you think we should just pay it off an start all again?Thanks

Osomdarling

Hi Osomdarling, did you ever get an answer to your question? I have the same concern. My husband & I are in a position to pay off our mortgage completely due to some recent inheritance but also plan to move to a bigger property in 12-18 months time. We could do with a bit of pressure taken off our monthly outgoings between now & our next move, although would still plan to save a proportion of our current monthly mortgage payments. We can't see any other reason not to ( no penalties, currently mortgage interest rate outweighs savings rate & we'd still have an emergency fund.) we're just worried that being mortgage free might go against us in the future....perhaps we should consider just reducing our mortgage by a reasonable amount?

judypatty81 · 14 August 2013 at 3:04PM

Hi there,
We are very keen to move. i bought at the peak in a not so nice area and my house has lost about half its value. I had invested a lot in the house and with 7 years of repayment I reckon I would just about break even if we sold. We are considering overpaying on our mortgage (it would be possible to pay off this mortgage in 6 years) but might we be better to just sell and start again, putting all the money into a new mortgage. (We have just had a son and I really want him to have a garden to play in!). Any advice would be gratefully received.
J

Should I pay off my mortgage? Discussion area

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