To not pay off my mortgage?

We could pay off our mortgage but we are choosing not to. We have kids about to go university and who may need a help with a deposit. It will be way cheaper for us to use our savings than to remortgage to help them. At this stage in our life, there are many reasons why we want liquid wealth. If/when the kids get settled in steady jobs, we will think about paying it off.

We could pay off our mortgage but are earning more in savings. It is nice being mortgage free (have done it twice before) but not at the expense of your savings.

If you can beat your mortgage rate with savings, and trust yourself not to blow it, it's an easy decision to not overpay.

The time to do it would be when the interest rate on your savings accounts falls below the interest rate on your mortgage.

I have a similar dilemma. Until recently I was over paying the mortgage by £400pm. We’re on a fixed deal at 1.54% until 2026. But my ISA rate is 4.6% so it makes more sense to send any extra money to that. By psychologically, I really wanted to be lowering the mortgage as much as possible. That really doesn’t make sense though!!

I think I'd ring fence it in savings and let it accrue interest knowing that I could pay it off if I wanted to. Id want a good 'emergency buffer' before I wiped out my savings. 6 months pay ideally. It's a lovely problem to have and although there are probably some clear cut answers money is also emotional for many of us and you can't discount that

If I'd paid off my mortgage I'd probably up my spending a little (not by as much as the mortgage, but still by some). So psychologically I think I'd be better off with the mortgage still.

Put the money into a savings account earning higher interest. See it as ringfenced for paying off the mortgage when it is in your financial interest to do so. You are therefore effectively mortgage free because you could be mortgage free at any time you like assuming your savings are easy access.

@TwoTimesShoeShop one thing you have not mentioned is whether you have an early repayment charge on your mortgage currently.

All the experts say, get rid of debt asap.

Financial adviser here, no they don't. They say 'get income protection and life insurance so it doesn't stunt your ability to pay your bills and into a pension if you're too ill to never work again'.

Life has changed significantly for people over the 25 years I've been advising and products have developed which has changed the advisers stance on this. Having mortgage debt, and savings is not necessarily bad. It is how to utilise both that matters, and for that most people need proper financial advice for their individual circumstances.

Keep the buffer and, if you're happy with the level, just overpay your mortgage with some of the money you would have been adding to your savings from now on. That way, your balance will be lower when you get to the end of your current fix and will be less of a shock if you can't secure a rate as low.

I chose to pay the mortgage off and have zero regrets. Even at a low interest it was like having a stone around my neck. I am now 100% more secure and comfortable with the idea of losing my job suddenly because I know that I may have to starve and go without heating for a few months but I will never be homeless.

Your mortgage must be pretty low though. And you still have all your bills to pay each month. So I'm not sure what difference it really makes?

I'd just leave it as it is. Freedom of no (very small) mortgage Vs freedom of having savings if you lose your job/COL effects.

The thing is what if you had an accident or an unexpected medical condition(God forbid) or interest rates rocket suddenly. All the experts say, get rid of debt asap.
Also once you have got shot of the mortgage you can regularly invest in stocks and shares isas which means you don't fall foul of the possibility you buy at a time when isas are expensive...it spreads the risk.

But if she has an accident etc then she'd be far better off with a (for example) £100k mortgage and £100k in the bank, than no mortgage and nothing in the bank.
You can regularly invest in stocks and shares ISAs regardless of whether you have a mortgage. It might be more risky than paying off the mortgage but in the long run you are likely to be much better off investing over the years than rushing to pay a debt that is being eroded by inflation. Even better to invest in a pension and to have the tax advantages too.

There are sensible reasons to pay down a mortgage but also very good reasons not to do so.

The thing is what if you had an accident or an unexpected medical condition(God forbid) or interest rates rocket suddenly. All the experts say, get rid of debt asap.
Also once you have got shot of the mortgage you can regularly invest in stocks and shares isas which means you don't fall foul of the possibility you buy at a time when isas are expensive...it spreads the risk.

To give an example, we cleared our mortgage in our mid 20s, we have never earnt more than 50k a year between us, but now have investments of over £1m, a house, combined pension pots of £900k and I retired at 55. My wife still works because she enjoys it. If we had to have paid a mortgage for 24 more years, we would never be in this position.

Before anyone has pop, I would have gladly paid 48 years mortgage payments just to have 5 more minutes with my parents

I would want to make sure I had enough savings kept back to pay the bills for at least 6 months if I lost my job and also have a pot set aside for an emergency fund to cover anything like a big car repair bill / boiler replacement / roof issue etc

But in this case it makes no sense to do that as the mortgage rate is lower. Its literally throwing money away to pay off the mortgage.

If the OP wants to not have a mortgage payment coming out of her budget, she can use her savings to make the monthly payment until the end of the fixed rate. But it sounds like they don't even need to do that as they're building up savings, ie have spare money each month.

We are retired and our house is paid for, and it is a very nice, secure feeling.

I chose to repay. It was such a psychological milestone and while I might have been able to utilise saving interest to my advantage (especially given the decent rates in the last 18mths) I decided it wasn’t worth it for me. I just wanted to be rid of the mortgage! Plus my fixed term would have ended, or would be coming up about now at a much higher rate than I had.

How long would it take you to rebuild your buffer. We have been mortgage free for a few years and are currently saving £4K a month across various savings/isa/shares

We had a lot of savings and then spent them on an extension. We still have a buffer but a much smaller one than we did before and it does concern me.

if you lost your job, you wouldn't be able to release equity via a mortgage as you wouldn't have proof of income to meet the repayments. I'd stay as you are for now, maybe pay down a chunk if it will make you feel better.

www.barclays.co.uk/mortgages/offset-mortgage/

You could investigate offset mortgages?

Far better ways of putting a big chunk of money to use than paying off your mortgage. Unless your mortgage feels like a proper millstone.

I’d leave it if you have a secure job and/or income protection insurance.