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Have you paid off your mortgage early?

(60 Posts)
alma123 Thu 16-Jan-14 21:39:10

How did it work out for you - was it worth it? I have been paying bits off here and there but I think it's making me a bit miserable. Instead of having a bit of fun with my money, I'm re-directing my spare cash at the mortgage and well... despite paying some off, it still feels like a big number remaining.

Financeprincess Thu 16-Jan-14 22:19:47

Yes, it is worth it.

Over a typical 25 year mortgage, factoring in interest, you will pay back 2 to 3 times the amount you borrowed. Paying the principal down quickly is a smart thing to do.

It sounds like you are trying to do too much though - you don't have to throw ALL your spare money at it. Even small overpayments each month make a big difference. Keep some back for having fun with!

Before I was married, I paid off my mortgage on my house. It meant that when DH and I got married, and wanted a bigger house, I had a nice pile of cash for a deposit. We're overpaying our mortgage, and should clear it over a 10 year term rather than 25. We still have fun though...you can't enjoy life if you're too austere.

It's a great feeling, not having to pay the mortgage every month. Such a sense of freedom. You're no longer at the mercy of interest rates and the house is all yours.

HermioneWeasley Fri 17-Jan-14 09:38:01

One of the best things I ever did. Been mortgage free since my early 30s, and while the house is not Buckingham palace, it is all ours. I work long hours in a demanding job and it is so liberating to know that it is genuinely my choice to do so, and I could walk out tomorrow if I don't like it anymore.

Also as Princess says, it makes sense from an interest perspective.

CogitoErgoSometimes Fri 17-Jan-14 09:43:04

I was well on the way and had a finishing line in sight of 2017 before I thought better of it, rescheduled, borrowed lots more money and organised some significant home improvements. I have spent the last five years paying 10% of the balance off each time and that has a significant effect on the end date. Will probably carry on doing that tbh. However, at no stage have I committed more than 40% of my take-home to paying off the mortgage each month. Important to strike a balance & still have enough spare for a holiday or treats.

slug Fri 17-Jan-14 11:12:28

The best thing we ever did. It's a tiny flat but there's no way I ever want a mortgage again. It's so liberating. We paid it off when DD was one year old. This meant DH could quit his job and be a SAHD. With no mortgage we were perfectly able to live off my 4 day a week teacher's salary.

Like Hermoine says. It means you never need feel trapped in a job again.

Best thing EVER! Such a feeling of security. Whatever happens to our jobs or health or finances we have a roof over the family.

Worth it ten times over.

We will be. We've got 10 years left, and are now in a position where if we stretch ourselves for the next two months we can pay it off entirely.

Weighing up all the pros and cons it's definitely going to be the best option.

Mmmbacon Fri 17-Jan-14 11:22:58

we are sort off currently overpaying, we knocked 5 years off when bank insisted on making us reapply for mortgage after fil passed away as he was guarantor, we went from fixed to variable, reduced term by 5 years and reduced payment by 50pm, will be increasing when ds is in school asks dont have another mortgage to pay in creche fees, hoping to pay off some extra when his free hours kick in,
Although friend recommended always having a small mortgage as out is easier to remortgage for university for kids than to get a new loan, not sure how reliable that advice is but interesting,

littleredsquirrel Fri 17-Jan-14 13:41:13

We are overpaying lump sums when we have the cash and also a regular amount each month and will be done in 5-6 years at this rate. I can't wait. Mind you we won't know what to do with our income since so much of it currently goes on mortgage payment (all of DH's salary).

Miggsie Fri 17-Jan-14 13:46:23

Yes, we overpaid massively and paid off the mortgage when DD was 5. It meant not a lot of luxuries and no holidays for some years but DD was so small she didn't really notice.

The difference means we were able to send DD to a private school when the local state proved a disaster... If we had had the mortgage still running we could not have afforded that. Gave us a lot more options and meant DH didn't have to take a promotion which would have meant long hours as we were not servicing a mortgage.

Financeprincess Fri 17-Jan-14 14:28:35

Don't remortgage to pay your children's university fees, bacon! You'll be impoverishing yourself in later life. Let them stand on their own two feet and take responsibility for their own debts.

In any case, they won't be pleased if they have to help you out financially when they are in their thirties and you're trying to pay a mortgage from your pension.

overthemill Fri 17-Jan-14 14:32:40

Can I ask if you do overpay, what kind of figure is it? Out mortgage only allows overpayments of 299 a month before something mean happens (?higher interest rate). I always think we will but never have spare cash tho May next year

littleredsquirrel Fri 17-Jan-14 14:51:38

I think the figure would be misleading because it depends on the size of the mortgage in the first place.

We are allowed unlimited overpayments. My monthly "overpayment" is £3,500 but that is because I have an interest only mortgage but we pay each month the equivalent of a repayment mortgage and then some on top.

PirateSchool Fri 17-Jan-14 15:26:55

I can't I'm too greedy.

I could have paid off the mortgage on my first home (in fact I had a similar amount saved when I moved out) but I wanted a nicer house. Just as well I did as that little falling down house would not have been suitable for a family.

House no.2 - an amazing tracker mortgage, if I had overpaid for the last 4 years I could have made a serious dent in it. But it coincided with 2 maternity leaves and childcare-costs-from-hell so we never did.

Then of course we got greedy and have got house no.3. I am really glad we moved here, I love it, not extravagant by the standards of most of my colleagues but we will be nearly 60 when we pay it off.

There is a balance though between enjoying today and being prudent for the future. I wouldn't want to make today miserable in order to pay off the mortgage in 10 years. But if it was a 3 year sacrifice then I would.

WeAllHaveWings Fri 17-Jan-14 16:57:00

Our mortgage deal allowed overpayments of £500 a month, so if we had spare cash would put it in, as a £500 over payment would bring the term down by a few weeks each time (we also had a small £4k inheritance and a small £4k endowment policy compensation that went in £500 at a time)

When the fixed deal finished we went onto their standard rate mortgage which allowed unlimited overpayments, I got made redundant and paid £20k of dunny money into my mortgage.

With the all the overpayments in the last 10 years we've probably taken 12 years off our mortgage term and will save over £20k in interest and insurances. 3 years left to go and will be mortgage free at 48, ds will be 12 then and we can bump up his monthly savings.

There is a great excel mortgage tracker template somewhere that lets you put all your figures in and either regular or oneoff overpayments so you can work out how much you are saving (I used to have it but cant find it on my new PC)

alma123 Fri 17-Jan-14 17:51:42

Thanks for the thoughts so far.

We're allowed to overpay as much as we want on our current mortgage - it is completely flexible.

I guess though that even if we do manage to repay early, we will still have to work to pay bills etc. I mean we would never be able to give up work just because we pay off the mortgage - well I might but DH would still have to work! My monthly council tax is not far off my monthly mortgage payment!

Preciousbane Fri 17-Jan-14 18:34:14

We overpaid, we owe 7K but decided to keep as 0% above tracker so we could have paid it all off by age 38. We risked money in investments and it worked out quite well.

We are about to move and will take out another mortgage and then sell our current home which will release equity and we will again overpay and be mortgage free in about five years when DH reaches 50.

morethanpotatoprints Fri 17-Jan-14 18:39:34

OMG, yes totally worth it.
You don't realise what a mill stone it is until you hear others panicking about interest rates rising. The security it gives you and the peace of mind is worth doing without a new car, kitchen, holiday etc.
The money you save from paying the mortgage and interest can be saved for luxuries, or better lifestyle.

Piffpaffpoff Fri 17-Jan-14 19:18:26

Yes, we overpaid hugely each month, pre-kids, and a then a couple of big redundancy payments got put in there too. Paid it off in full about 2 yrs ago. It's such a good feeling to not have that huge outgoing each month.

Mumoftwoyoungkids Fri 17-Jan-14 21:43:01

We haven't technically but we have significantly more in savings than our mortgage (savings earn more than we pay on our mortgage so we are keeping it that way for now.)

For us it isn't about being able to quit work but about being safe. No one can ever take our children's home. Which is pretty d@mn fabulous in my world.

We did lots of overpaying in our pre kids 20s but didn't completely sacrifice having a nice life to do so. I do slightly regret not having more swish holidays before we had the kids but we has a pretty good time of it so can't complain.

One thing we found was that e mortgage felt like this huge black hole we kept paying money into until one day it wasn't. As it suddenly fell to an amount that seemed manageable. Suddenly we were in control and the numbers seemed to fall really fast because as a percentage the difference in going from 80k to 40k is completely different to going from 180k to 140k.

alma123 Fri 17-Jan-14 21:47:45

Mumoftwoyoungkids, interested to know where you keep your savings! I'm really struggling to find a savings interest rate that is better than my mortgage interest rate (approx 2.5%). That's why I've been paying off my mortgage!

OodlesofOods Fri 17-Jan-14 21:49:59

Look up the MSE mortgage overpayment calculator. I find it quite addictive blush

lljkk Sat 18-Jan-14 19:27:05

WE did, absolutely no regrets, great freedom, highly recommended if possible. We were lucky we were in a position where it didn't feel like a sacrifice.

Mrswellyboot Sat 18-Jan-14 19:36:38

I also used the money saver over payer to kick myself up the arse and now have 13 years rather than 22 years left. I will be out on negative equity in five so able to move please god. Yahoo

Mumoftwoyoungkids Sat 18-Jan-14 20:29:49

alma We have a really good mortgage rate rather than great savings rates. (Combination of lots of equity and a mum who was an accountant before she retired and is a bit bored now and found a really good deal.)

We have our money in ISAs as we'd never beat the mortgage rate if we had to pay tax and we have to remember to move every year or two as often the decent rates include a time limited bonus.

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