To want to pay off our mortgage

This is what my mum and dad did and they they paid their mortgage off - the endowment, thankfully, covered the capital and they had made a slight profit (a few thousand, not mega bucks), HOWEVER, that was over 30 years ago. I feel the mortgage world has shifted since then.

It sounds like OP hasn't been making any kind of savings provision.

@SparkleShineRainbow you either change your mortgage to repayment or start saving like crazy. Please get some proper financial advice

It's also very hard to comment without knowing the exact figures. An 150k mortgage on a 1 Million pound house at a 1% interest rate, with 20 years left, I wouldn't be too worried. A 300K mortgage on a 500k house at a 5% rate with 10 years left- terrifying.

I second the advice re protection policies. Maybe you should think the unthinkable OP. If you died your lowpaid DH would struggle to pay the mortgage alone, so insurance is vital. Do you in particular have permanent health insurance? You are bringing in much of the household income.

In the event of divorce you would (probably) get 50% of the equity each, so really difficult for both of you to buy or rent in London I assume?

Sorry to be gloomy, but planning for worst--case scenario is prudent.

Well you aren’t going to pay any of your mortgage off if you’re on interest only. Most people I know opt for a repayment mortgage.

I would pay it all off the mortgage, if there is any remainder afterwards left on mortgage then switch to a repayment. An interest only mortgage is only for the very short term. Yes you have equity but lots of that will be eaten up when you have to repay the mortgage at some point.

Interest only is effectively renting. You have paid nothing off and so if you sold, you would receive very little if anything (although it’s worth checking this with your mortgage company).

Switch to proper mortgage sharpish!

Just because your mortgage is defined as interest only, doesn't mean you can't voluntarily overpay. You just contact them and change your monthly payment amount. The only thing you have to be careful of is that you don't over pay by more than the lender's annual limit. Whenever we have done this, the annual limit is 10% the value of the mortgage. So you can actually overpay quite a lot each year before triggering a fee.

I don’t see interest only as such a bad option, when interest rates have been so low until very recently. Our interest only is 0.5% fixed for 3 years prior to rises. We have savings to cover earning 6% interest, which I think works out better even allowing for tax on interest above allowances. Also good to hang onto an interest only as they are hard to come by now and if times get very hard they are cheaper than a repayment.

In your shoes, with a good interest only deal, I would make sure I saved extra every month into an ISA or similar and use that to reduce the principal at renewal time
That's more or less what I'm doing, though I have a repayment mortgage so I'm saving more to overpay

Ours is not paid off but we are still youngish under 40 but should be paid off in next 6 years. We overpay our mortgage. This eats into the interest charged and you pay it off a lot quicker. We have repayment I would never get an interest free mortgage that would worry me. If you can pay even 100 extra it helps. We bought our house 15 years ago it was a do up job so cheaper to start with. I understand if we bought now house prices have doubled so wouldnt be possible on current prices. If you overpay but under 10% per year there aren't any extra charges.

Keep your current mortgage deal and look at the terms for paying it down (overpayments). Then look at what you would pay if you were on a repayment deal at current rates and transfer the extra into your mortgage every month. Sounds like if you put all of it into savings you'll spend it.

Instead of the lottery put money into premium bonds. You still might win big.

Most people pay off their mortgages, by actually paying off their mortgages. You need a repayment mortgage ASAP, move somewhere cheaper if you need to.

You are not as privileged as you think in the slightest! Your mortgage provider is funding your lifestyle and you will have to pay them back. You’re basically going on all your holidays using a limitless credit card. Bonkers!

Do you really believe that everyone who pays off their mortgage has done so with help of parents?

I mean what you've done isnt smart but you have had equity gains which depending on size would pay for a smaller house you can downsize into

I'm not your target audience as we dont plan to overpay simple due to our circs.

You need to work out whatyour surplus is and start overpaying or save the surplus gain interest and then pay it down it down once your mortgage lapses

we paid off our interest only mortgage some years ago, we had an endowment policy to pay off the capital. it took awhile but at the end of each year if we had savings we paid a bit off. Savings interest rates were so low and bank interest high so it was worth it and reduced the amount we had to pay each month. And the endowment policy was a bonus to us at the end. so if you have some spare savings I would say go for it if yours is interest only.

Pay fortnightly instead of monthly. It saves you heaps and speeds up the process.

www.loans.com.au/home-loans/first-home-buyer/does-paying-your-mortgage-fortnightly-save-money

Why on earth have you only been paying interest instead of capital too?

Also, why on earth is this in AIBU instead of property or Money Matters? Ddi you want a stealth boast? (It's not actually the boast you think it is: see my first question)

Can only echo the many other posters who have said to get on repayment at the earliest opportunity, and to make sure your protection policies are up to date.
I think you need to make some serious changes OP if you ever want to own your home outright

Our first house was one we could afford on one wage. I was only 6m into my job and the move was because my partner was taking a new job starting after we moved. We wanted a buffer in case one of them didn't pan out. One almost didn't and it did help reduce the stress.
We were on a low fix for 5 years and knew the low interest rates couldn't last forever. We also were wanting a family so knew that we would never have as much disposable income as we did then. We overpaid as much as we could (unlimited overpayments with our mortgage provider). After 4 years we were in a position where we could have paid off the mortgage in full at the end of fixed term but having had a child by this point and the pandemic turning my job into a WFH job we needed a big house so we moved and now have a 30% LTV. We haven't been able to overpay this mortgage with nursery fees and renovating the house. Also we are currently getting more interest in savings that we are paying on mortgage so we most probably use savings to pay off a lump sum when we come to the end of our fixes.

We regularly evaluate our finances to make sure we are saving and getting the most of our savings. If the savings rates drop near the mortgage rates we will restart overpayments.

Everyone just pays their mortgage off slowly over many years, very few people just pay it off through handouts. How odd that you think this is how people are paying off their mortgage!

Get urgent advice and you need to seriously cut back!!!

Oh gosh, I thought you were going to be asking about overpaying your mortgage to get it paid off more quickly - not if you should start paying off the balance because you’re on interest only. Yes yes yes! It is madness to be frittering money on holidays and a “good standard of living” and not paying anything toward actually owning the house you live in (if you have that option and aren’t stuck renting). Please speak to someone and get some decent financial advice about this!

It's good that you're realising that your situation is somewhat precarious. Do you discuss finances with your husband? Or as the much higher earner is it down to you? You absolutely both need to be on the same page with this as to get yourselves in a stable financial position fundamental changes in your finances will be necessary as you presently have no vehicle to pay off this mortgage.

The advantage you have is that you are a high earner so that's in your favour in seeking a solution. As a first step I would consult a reputable independent financial adviser and see what he/she comes up with.

You have been living above your means for a long time and good for you that you want to sort this out. You have a couple of options - if I were you I would absolutely get advice on what going onto a repayment mortgage would cost you monthly, and it it's feasible with a bit of economising then absolutely go for that. This gives you peace of mind for the future.

The other option is where you need to have an honest discussion with your husband and be honest with yourself too. Would you actually be happy to sell your present house at some point in the future and relocate/downshift to enable you to pay off your mortgage? Personally I would find this option incredibly risky, but it may be something to think about. This also predicates on house prices and the housing market remaining stable.

You will have seen from all these comments most people have repayment mortgages and pay monthly over many years. It's not too late for you to get yourself out of this - but please realise you're actually not incredibly privileged (as per your comment in your first post) as you've been putting your financial stability at risk with an interest only mortgage. You'll be the one to suffer here, as the main breadwinner - act now to at least give you options and avoid sleepless nights!!!!

Madness!!!

Wow that is stark!

I guess I thought that people would only have an interest only mortgage if they were planning to sell the house to pay off the mortgage at the end. I guess that is a viable option if you accept you will need to downsize

I think it is going to be hard for OP to reorient their family's lifestyle to afford a repayment mortgage as they have essentially been spending the extra money they would have paid.