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    • pollyanna24
    • By pollyanna24 1st Mar 18, 11:06 PM
    • 3,840Posts
    • 4,720Thanks
    Overpay mortgage or pension
    • #1
    • 1st Mar 18, 11:06 PM
    Overpay mortgage or pension 1st Mar 18 at 11:06 PM
    Didnít know which board to put this in; pensions, mortgages etc, so have put it here.

    Is it worth overpaying my mortgage or putting the extra money into my pension?

    Iím talking £500 a month for about 8 months of the year, £4,000 a year.
    Pink Sproglettes born 2008 and 2010
    House Worth (approx) - £400,000
    Mortgages (3rd Nov 2017) - £180,813.85
    Equity - £219,186.15
Page 2
    • OldMusicGuy
    • By OldMusicGuy 9th May 18, 12:18 PM
    • 511 Posts
    • 991 Thanks
    Similar to Kynthia is what I would do. Pay maximum into pension to get tax relief and employer's contribution and then think about overpaying mortgage. Malthusian's posts are largely correct, except IMO with regard to downsizing.

    We have always planned to use our property as an asset that can release capital in retirement. And the plan has worked very well. We stretched ourselves 20 years ago and bought a house that was probably bigger than we needed (5 bedroom as opposed to 4 bedroom) but that has worked out really well. We always planned to relocate from the very expensive area in the SE in which we live to a cheaper area in the South West. We will be able to move from a 5 bedroom house to a 3/4 bedroom detached house and release a lot of capital. This will also reduce the running costs of the house by about 25% I reckon.

    We will renovate the next place we buy and kit this out as a 20 plus year retirement home for the two of us (our son is just about to move out). We will move to an area that more suits our lifestyle as a retired couple (we live in a suburban area in the SE) and it will be a renovation/improvement project for both of us, as we both enjoy DIY. The next planned move after that will be when we are in our 80s to a flat. That will release a bit of capital but we should have less need for that at that stage. That will leave the flat to be sold to fund care home fees if needed.

    I've always viewed property as an asset to be used in retirement planning. If you plan ahead, downsizing definitely can pay dividends. I have seen too many relatives of friends and family get stuck in houses that are too big for them as they get older, which can hasten the move into care.
    Last edited by OldMusicGuy; 09-05-2018 at 12:21 PM.
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