To want to pay off our mortgage

Just start today, for starters. Even small amounts that chip away at the capital amount will make a difference.

You've at least had a substantial equity rise from the sound of things so the alternative would be to downsize in time. But if you don't wish to do this then you need to make a dent in the capital by overpaying.

Do you both have pensions?

I paid mine off myself. I did through a combination of things, the first of which was move to an offset mortgage and start saving into the offset savings. This basically started my pay off mortgage fund. Then any time I got any spare cash, eg occasionally get small bonuses at work, I had some shares from a previous employment employee share scheme which I sold etc then all that I put that into the offset. This way I gradually built up the offset, this also meant that my monthly payment paid off more of the capital too and eventually I had enough to pay off the actual mortgage. It was also 3x my salary.

Our mortgage will be paid off within the next few years and we've done it by:

1. Borrowing only what we were comfortable paying back. So instead of buying a house at the max value that the bank were prepared to lend us, we worked out what we could afford to pay back over a shorter term.
2. Not buying a huge expensive house for the sake of it.
3. Every time we've needed to remortgage we reduced the term.

We got a 10 year fix to pay 200k back it’s 2k a month which is a stretch as interest only was £300 but you settle into it. Depends how much you owe. Speak to a mortgage broker & look on Martin Lewis Money

@Dibbydoos OMG I can't believe some of the answers here having a go at you for having an interest only mortgage. Right now, I wish I'd done the same!

Why? It’s not the 90s anymore. It’s insane to take out an interest only mortgage 15 years ago with absolutely no thought as to how to repay.
Your post is completely irrelevant to OPs situation, she isn’t making riskier but higher earning decisions with her money, she isn’t saving! She hasn’t saved for 15 years and has only started to save 10% of her income, not even joint which is likely to be nowhere enough of a monthly contribution to the mortgage.
OP took an interest free mortgage at a time the pitfalls were well advertised and lived a nice life, going on holidays and not being financially strapped as she mentions in her OP but spending every penny and making no plan for how to actually repay her mortgage.

I think you need to know what they told the mortgage provider before you can say that. And interest only mortgages are so very known to be a major issue that gets people to basically lose their homes when they don’t have the money to pay the capital sum then it’s absolutely guaranteed they said something. This will not have been offered up.

This is shocking advice. Which I’m sorry should have been guessed when it starts off you also wish you’d done the same.

Yeah what was the original plan

If you are on an interest only mortgage and didn’t set up a savings plan for repayment I think you may have a case for mis-selling against your mortgage broker.

OMG I can't believe some of the answers here having a go at you for having an interest only mortgage. Right now, I wish I'd done the same!

Check if your mortgage allows you to pay any capital off. It may not, so save alongside it until any deal you have is drawing to an end. When you remortgage, use your savings to reduce the mortgage amount. Your savings should be at least equivalent to the number of years your deal is as a fraction of the total years left in the mortgage. Eg 5 year deal, 25 year mortgage = 5/25 or 1/5 of mortgage value.

Paying off your mortgage may not be the most financially advantageous thing to do with your savings though. So as an alternative, use your savings to invest in another property, tenant or Airbnb it and save the profit. The property will accrue in value and your income will cover the mortgage plus profit. Do it via a LTD company as that is more tax efficient. Or invest in an ISA (stocks and shares but relatively safe ones)
Lastly, engage a financiaadvices to help you plan for the future, use one that can access the whole market. They are in the best place to review your circumstances and advise you on what is best for your long term financial security, not a load of MN commentators, albeit some may be FAs.

Good luck!

Consult a financial adviser rather than MN.

I'm not a financial adviser and perhaps you should see one. But my gut reaction would be to re-mortgage onto a repayment mortgage as a first step - I assume that will be a big step up in repayment terms so get used to that. I'd then look at your pension and then, long term, plan to move out of London and release some of that equity. The advantage of the London housing market is that the equity can often buy a decent house somewhere else.

What are the terms of your mortgage.

I use to be able to pay an additional 10% a year so repaid a little extra each month and then lump summed once a year.

If you can’t do the above, I would open a specific long term savings account for the remainder of your mortgage. You can then pay off a lump sum and move to a repayment mortgage.

would you consider seeing a financial advisor?

Move to a repayment mortgage and start overpaying. Also start a regular investment account.

We overpay since DD left expensive nursery, all amounts saved when she started school went to a regular investment account and mortgage overpayment.

The money goes out when my salary comes in, so there is no real sense of not having the money.

I would get an independent financial advisor to sort through your finances, it's worth the initial payment to them to really get a good idea what you need and what you can afford.

I grew up without money and for me a sizeable savings account is very important. We earn a good net income and don't look too much on prices but saving money comes first to me.

Honestly, we just made significant overpayments on a regular basis to get it paid off, but that was doable as we hadn't overstretched ourselves.

How did you originally plan to pay it off when you decided to go interest only?

I'd look at remortgaging

How old are you OP? It's not the 90s any more you need to get off the interest only mortgage. The only way you'll pay it off is to start actually paying it off, or to sell and buy something much cheaper which would likely be away from London. There's no way else around it really. The good thing is if you bought 15+ years ago hopefully it was relatively low compared to today's prices and you'll have enough equity for a 60% LTV rate?

The answer is to reduce your spending and over pay. You have to choose what to prioritise. If you do a budget you’ll probably be horrified what you spend, then do another calculation to see how much interest you’d save if you over pay.

How do I pay off my mortgage? I pay down a portion of the capital every month. HTH.

I haven’t paid one off. But my ex and I were on track to pay ours off in 15 years rather than 35 by overpaying. Now I’m back at the beginning after a split. However I will overpay as much as possible. It makes a big difference.

in your case I mean I have no idea. 15 years ago was just before interest only evident requirements were brought in but presumably you had to provide something when you remortgaged? How does the bank think you are going to repay?

I have been astonished at two people recently telling me they have interest only mortgages and no way of repaying it. They will have to sell their properties. One of them reckons he doesn’t earn much so hasn’t paid it off but he’s got several lodgers in there as well as a job and interest rates were rock bottom for a decade. I can’t understand how people can live with the stress of not paying it off!

In your case OP I would start repaying more each month but honestly after 15 years you’ve got to pay so much more every month to ensure it’s paid off at the end of the term…

I won't go into details of how, but if you can would recommend it. The feeling of knowing the house is yours even if your personal circumstances changed is a great relief.

We’ve been in our house 9yrs and mortgage free for 2yrs now. We prioritised overpaying the mortgage and ensured we were allowed to do so.

No we didn’t have the latest phone/car/holidays in those times but now we have a house no one can take away and our disposable income has hugely increased so things are massively easier now.

You need a repayment mortgage and I would make sure it’s one you can make overpayments and then I’d be doing that too.

No need to panic but you are right to start thinking about it. I would be wanting to switch to a repayment mortgage. Martin Lewis MSE has a mortgage calculator tool to run your repayment amounts through at different interest rates. I would check the market to see who is offering the best rates. If your property has increased in value over the years you will have a better loan to value ratio which should enable you to access better rates. With mine (much cheaper area) I then over paid when I could afford it. It can be done and it is a good investment in your own future.

When we had interest only I asked our advisor how much a month we needed to pay for the repayments to cover the term of the mortgage.
Then occasionally we paid a lump off when able.
We were mortgage free at 55.

Bought with an interest rate of 4% in 2006, as the interest rate plummeted over the next 10 years we kept the original repayment going that was calculated at 4%, so we overplayed massively, as was the plan. Been mortgage free for a year or so now. The only way is to overpay. You'll have a % you're allowed to overpay each year.