Threads in this topic are removed 90 days after the thread was started.

Mortgage free people? Did you pay it off early? How?

(85 Posts)
bakinggood Sat 16-Aug-14 15:24:15

We are looking into doing this using some savings and then overpaying.
Not sure how far to go though, as we don't want to miss out on life now.
Did you have to cut back much or not really to overpay?
We owe about 50k -payments about £350 pm 16 years left. We are 47.
If you got rid of your mortgage early please tell me your experiences.

We are overpaying something like 150/mth on ours, it's knocked 7years off the term which is quite astounding!

After the first couple if months once you adjust to the new budget, it becomes normal and you don't miss it

Pollywallywinkles Sat 16-Aug-14 15:30:39

Have you checked that you can overpay your mortgage without penalty? If there is a penalty you need to weight up the cost/benefit of paying off early.

We have paid ours off. But things were slightly different when we started overpaying as interest rates were going down and we just continued to pay the same amount each month for a period of time. With any pay increase we upped the mortgage payment and eventually paid it off early.

So due to circumstances at the time we didn't really notice the additional payments. It wouldn't be quite so easy to do now with interest rates being so low.

AnotherFurry Sat 16-Aug-14 15:30:51

We are overpaying and expect to be mortgage free in just over 4 years. It's a balance in that we could cut back even further and pay it off even quicker but we like our holidays so only put in a set amount whilst still having enough to enjoy our life. Saying that we do have a list of things that we want to buy once it has been paid off but they are all luxuries so we can wait.

JADS Sat 16-Aug-14 15:33:21

Have you thought about an offset mortgage? Basically it's like having a current account which has a -£50k balance. You get your wages paid in and near the interest is calculated daily. Some months you save more. If you need to dip in for any reason you can.

You need to be pretty disciplined though.

bakinggood Sat 16-Aug-14 15:34:47

It's fixed until early next year, Feb I think, so could pay a bigger lump sum then, otherwise can pay 10% per year.

ManicMinor Sat 16-Aug-14 15:37:42

The money saving expert website forum has a whole section called 'mortgage free wannabes' where people who are trying to pay off their mortgages early keep online diaries and share ideas. It's really interesting reading.

bakinggood Sat 16-Aug-14 15:39:05

That's it Another Furry - were not big spenders on luxuries, but don't want to miss out on the odd things we do want now.

We have an offsetting mortgage and will be paying off the mortgage 8 years early in spite of at one point using all of our savings to build a mahoosive extension on the house.

AnotherFurry Sat 16-Aug-14 15:47:28

OP is it possible to find a middle ground so that you overpay something each month but not too much so you don't feel like you have no spare money for living today?

Don't worry about how little you can overpay as it makes such a difference with compound interest. Go to the moneysavingexpert overpayment calculator and put in your details to experiment how a small regular monthly overpayment can save you years and thousands of pounds of interest as it's a great eye opener and motivator.

nobutreally Sat 16-Aug-14 15:48:17

We paid off ours 3 mths after my 40th birthday. And took on another one and a larger house 2 months ago.

We kept our payments static when interest rates went down, and then put in lump sums whenever we could. I'm self employed, so every time I had a big invoice paid, I put a chunk straight onto the mortgage, before I thought about doing anything else. We aren't big spenders elsewhere (last year was our first non-camping holiday in 11 years, dh's car is 15 years old) but I get a huge sense of satisfaction from feeling that we managed to pay it off so early. I did work out how much interest we saved, and was even smugger!

Floralnomad Sat 16-Aug-14 15:53:02

We paid ours off this year , we overpayed about £300 per month and paid 2 small lump sums in the last year. We never missed the money TBH . We had paid off a previous mortgage in our early 30s but then moved and got a new mortgage for a larger house .( I'm 48 now) .

peanutnutter Sat 16-Aug-14 15:56:34

I am 46 and ours was paid off when I was 45. We had about 60k outstanding. We overpaid ours for about 8 years, started paying an extra £175 a month and then increased it to £500 a month, and then used a bit of savings to clear the final amount. This cleared our mortgage 8 years earlier than scheduled. You can do it with a repayment mortgage, even if you can only overpay a few extra pounds a month it does make a difference, and once you have started you don't miss the money. We didn't miss out, and its money invested not spent IYSWIM. Its a really great feeling knowing there is no more mortgage!

MehsMum Sat 16-Aug-14 15:57:55

We moved to a much cheaper mortgage (lower interest) and kept the payments the same, which reduced the term hugely. It meant that when we moved, we had much more capital behind us. It was absolutely worth it. Paying off your mortgage early saves you a mint in interest.

OnIlkleyMoorBahTwat Sat 16-Aug-14 15:58:44

Check your interest rate before you try to overpay. If you took it out 5 to 10 years ago, the rate could be very low - ours is 0.88% pa.

We save the extra money instead as we can get higher interest on savings, although this is getting harder to achieve and we can then use the savings for big purchases, instead of borrowing at a higher rate.

If interest rates increase, we might decide to then pay it off faster, as we do have spare money on the budget .

DisgraceToTheYChromosome Sat 16-Aug-14 16:00:00

We overpaid ours on an irregular basis, making sure we never hit 10% of the outstanding balance, Then DM's probate went through so we did the lot in one go.

Did you know that if you try doing it online the bank will ring you and the other account holder on every phone number associated with you, including the ones that aren't in their records?

That was startling.

Higheredserf Sat 16-Aug-14 16:01:46

We paid our mortgage off by late 30's. We overpaid and didn't over stretch ourselves in the first instance.

We are good with money as well so don't waste it but didn't have to forgo the stuff we really like doing such as holidays abroad. We paid it off without penalty.

morethanpotatoprints Sat 16-Aug-14 16:01:58

We paid one mortgage off 8 years ago and just threw everything we had at it to pay it off.
If you can do it at once don't overpay just get rid. The relief and savings every month are worth it.
Then you are in a position to do so much more such as new mortgage for btl, saving mortgage cost every month which adds up over a few years, to make deposit for other houses or savings.
We haven't looked back, still have a low income but it doesn't matter now.

bakinggood Sat 16-Aug-14 16:16:31

We have some money available in January, so we're hoping to use some of that to pay the lump sum about (£8000-£9000) and keep a bit for a nice holiday (£3000?) then £200 overpayments per month which is doable without any real pain. We already have 6 months emergency fund, so that's sorted.
I've put that information into the ms overpayment calculator (thanks for that ) and it will be down to almost nothing in about 6 years-that's actually quicker than I thought. Really excited to do it now!

We paid ours off 10 years ago when youngest DC was 6.

First we live in an area of cheap housing and could buy a big house cheap. We borrowed far less than we could have done. Ambition was to have a nice big house but not the biggest money could buy.

Then we re-mortgaged over 5 years. This when DC were in nursery.
It was a big chunk of our income for a while but having had no mortgage now for 10 years it was worth it.

EssexGurl Sat 16-Aug-14 17:14:48

We have a mortgage where we can over pay with out limit and penalties. We only had about £3k left when we borrowed more to fund a BTL mortgage as savings rates are so low. We have paid some of that off and now have just under £15k.

We are intending on keeping a mortgage as we can use that to borrow back when we need it. Kitchen needs replacing in the next few years so we will just draw down some of the overpayments. All it takes is a phone call and the money is there.

We have overpaid by paying bonuses in (so not money we ever had and would miss IYSWIM) and these have been nice over the years as we both work in financial services in the City.

Every time we make an over payment we keep the monthly repayments untouched. So we have a smaller loan, but each month there is an overpayment which reduces the debt even quicker. As we were happy with the monthly payment in the first time, we don't notice it each month but we are paying more off.

We could be mortgage free on our home but like the flexibility of having funds to draw on if needed. The BTL mortgage is paid through the rent we get.

newnameforanewstart Sat 16-Aug-14 17:34:09

I paid mine off early and have been mortgage free for about 5 years now.

It was a choice I made (single mum at the time), I had a good salary and we didn´t do holidays etc., I kept eating out etc. to a minimum (need to anyway as a SM) didn´t spend a lot of money on anything that wasn´t essential and I relative terms I had a smallish mortgage (90k) due to being able to renovate previous properties and invest the return in my next one.

Interest Rates were low and I had a fixed rate with no overpayment penalties on capital (I was exceptionally lucky to have this type of mortgage btw) and I just hit the overpaying hard. I took my salary took the bills off of it (including putting x away for Christmas, one offs etc), and then put 75% of the remainder into the mortgage and the rest into savings. So we still had the odd treat eg. trip the cinema, new clothes, etc. Had an emergency fund if the car broke down or the roof fell in. Didn´t do holidays except odd camping trips for a few years. Anything I got in terms of lump some eg an old savings policy etc. went in as well. It was tough some times but I did it and I am please I did, I feel comfortable now etc., knowing I am no longer renting from the bank

Plus not having to pay the mortgage every month now means we can save up money for holidays etc more easily so it was in my case SHORT term PAIN for longer term gain.

MummytoMog Sat 16-Aug-14 17:35:14

Our mortgage is eye wateringly huge. Threads like this make me regret getting such a big mortgage sad and increasing the term last time we bought sad

BackforGood Sat 16-Aug-14 17:48:27

What we did, whilst locked in to a deal, was open a savings account, and transfer a few hundred ££ across to it on pay day each month, so we were used to being without it, it earned a bit of interest, but was still there if we needed it for anything. Then about once a year, or whenever we come out of a deal where we couldn't overpay, we'd pay a chunk of a few thousand off.
It is AMAZING how much it saves you in interest payments, without really missing the money as it's never really been in our accounts, and then becomes quite addictive.
Probably helped that interest rates were so high (15%) when I took my first mortgage out, so anything below about 7% I consider to be ridiculously low - and I assumed wouldn't be sustainable... shows what I know(!).... - so we made a real effort to overpay as much as we could then, whilst savings weren't earning anything worthwhile anyway.

Join the discussion

Join the discussion

Registering is free, easy, and means you can join in the discussion, get discounts, win prizes and lots more.

Register now