To ask about life with no rent or mortgage....

[broadstairs14]

I'm in the fortunate position of being a "homeowner". If I look a little more closely, the bank owns much more of my home than we do. DH and I have had a lot of discussions recently about trying to get our mortgage paid off early and being mortgage free really appeals.

I know two people in real life who inherited/ were gifted money at a young age and owning a house outright seems to have given them a huge amount of freedom and choice.

If you are mortgage free and still on the youngish side, how does this affect your life? Is it worth making sacrifices in other areas and really pushing for this? I'm looking for some inspiration to spur me on but also worry that I might be building it up and maybe it doesn't have such a huge impact all of the time.

I’m the same shots
I think the feeling that this is my house and no one can take it away will be incredible.

We had some homelessness scares when I was a child and I think it’s made me really crave stability.

What investments generate a return of more than borrowing rates of interest

Our mortgage interest rate is 1.1%. Our current account pays more than that.

I also have cash in other accounts paying up to 5%, shares paying dividends of 5%, a few premium bonds that, while don't guarantee to beat the mortgage, average out at a similar rate.

Definitely not in any rush to pay off the mortgage but am currently making more interest elsewhere and am on course to have an equivalent amount in savings within a few years. Monthly repayment is under 10% of household income anyway, so it won't be a huge change when it's gone.

Being mortgage free in our 30s enabled me to quit my job and set up my own business, which now does very well indeed. We were paying thousands per month as we had a seven figure mortgage, so not having that certainly made a difference!

OP, I'm on MSE mortgage free. It makes sense to overpay, especially as interest rates may rise soon.

Can you do little and often? Even an extra £20 per month can make a difference. Use the MSE mortgage overpayment calculator online and play about with the figures. Yiu can see the long term effect of paying off small amounts.

It does get quite addictive though

Purple, but everyone has to live somewhere. House is an asset if it doesn't cost you too much or your mortgage free. Huge mortgage round neck is liability..

I skimmed rich dad poor dad, I hated its premise... The way it was set up, u neccsary. But will read again.

I've a small slightly dilapidated house in an unfashionable suburb of a city and a secure but not particularly well paid job. I feel a lot of freedom and security though. I feel less anxiety. I have other bills of course and because my salary isn't big, I never feel I have money to spare, but I never feel particularly WORRIED either. So I may not be a person that others look at and think ''oh she is fortunate'' but I feel grateful.

Mid fifties here, we got a lump sum and paid off mortgage on £800k house... although that's just notional, because of course if we put it up for sale it would only be worth what someone wants to pay for it. However it does make me feel secure especially at the moment in these very uncertain times.

Paid off mortgage late 40s. Overpaid mortgage and used an inheritance.

The feeling of security is great. Had a job scare and knowing that the house was secure was s great feeling.

We are mortgage free - happened at 32 for me. But I was lucky - inherited £75k at 21, bought a flat for £100k at 22, sold it at 25 for £150k... DH bought a flat for £165k and sold it 5 years later for £250k. We both overpaid our mortgages and saved so when we finally bought together we had a deposit of £300k, 50% (London )
We are both naturally savers though... but looking back i would have prioritised pensions more, especially when I was a higher rate tax payer - done right you can use your pension to save and then use the 25% tax free lump sum to pay off your mortgage.
We didn't really sacrifice things - we took decent holidays but we aren't very materialistic. We did not stretch ourselves to the limit for our mortgage which I slightly regret (with the benefit of hindsight!) as with interest rates being as low as they have been we could have afforded a bigger house.
Now it means I can work part time and we save a lot for retirement - the plan is to retire early - by 55 - my DH's job isn't for the old, if he is made redundant after 50 that will pretty much be it for him.

We were mortgage free in our 30's but immediately started saving up to move to a bigger house in a nicer location.
If we had a smaller income we may have stayed where we was but we had enough to move up and still have the lifestyle we wanted as well as being able to invest and save for early retirement.

We'll be mortgage-free by the end of this month. We bought our first house less than ten years ago, and would have had years left on the mortgage if we hadn't made massive over-payments. I think it's really worth it for the interest that we have saved and for the peace of mind tbh, especially with Brexit just round the corner.

Will obviously have lower outgoings next year, so planning to save as much as we can, but already paying extra into a good pension scheme, so I'm thinking that we might treat ourselves to a nice holiday too!

In terms of freedom, the most free I ever felt was when I was travelling the world and renting in this country to save money to travel. I could live anywhere I wanted and move on a whim.

Owning a home, with or without a mortgage, gives you more security and less freedom. As you get older security will be more and more important. The more you can pay off your mortgage the more secure you become. Even when you are rent free you still have bills to pay and a new boiler to save up for. Having a bit more money to spend is nice though.

I've been mortgage free due to over payments. If you continue to work the extra money provides opportunities to save, spend, donate, enjoy a bit more freedom. There is a new movement called FIRE which is related to retiring at an early age. I continue to work.

Interesting thread. We are in the process of selling our flat that we own mortgage free and will probably buy a house with a small (£25k-ish) mortgage. We paid off the flat's mortgage with a death in service payout from the passing of a close relative. I feel fortunate to have that asset as it gives us security and has enabled me to retrain for a more fulfilling career.

It means I can comfortably work part time and keep my outgoings down.

Didn't make much difference as was relatively small payment each month. However nice not to worry about interest rates and no matter what else happens we will have the roof over our heads.

We overpay by £500 a month at the moment and if all goes to plan will be mortgage free in 6 years. Our mortgage payment is £1100 a month, so it will make a huge difference to us when it stops.

We keep a balance though, as I would be miserable putting all our spare money into overpaying, so we still have nice holidays & eat out. I've stopped buying so many things though like clothes, gadgets etc.

Agree with Mummyshark. I’d have been mortgage free years ago if I’d stayed in the tiny market town where I was born, where around 2000 a two up, two down could be had for less than £20K. But, I saved and bought in London and now have a significant amount of equity. Definitely know where I’d rather live!

Mortgage free through a few years in highly paid highly stressful jobs, and inheritance. Now have the flexibility to work part time while children are small. We have had a few short periods with being mortgage free but having almost no income which was quite stressful and forced us to budget but that experience as well has made us much more frugal and refocused on the things that really matter. I do feel some pressure now to build up savings. We bought a house that needed more doing to it than we realised, and we're now having 'save for a new bathroom or have a holiday' discussions. In some ways, unless you're very disciplined or very clear of your priorities, ones spending adjusts to the amount of income you have.

DH and I are both 30, had no mortgage for three years..there is always something you can find to spend money on!

Zevit- unless it’s making you money a house is a liability.

In theory, I have another 31 years of my mortgage. It terrifies me and part of our plan is to overpay and try and being it down by 10 years if we can. The freedom of being mortgage free seems so valuable but not (for me personally) at the expense of living nor through staying in small accommodation when you could upsize. We could be mortgage free now if we’d have stayed in my flat. I don’t think it would have been a sensible choice to have stayed

At low rates it could actually work in your interests to keep your mortgages and use the money you would have paid off to generate additional income elsewhere.

That's what we've decided to do. We're mid-40s and could pay off our mortgage now (bought an old terrace house that needed fixing up as our starter home and decided to stay in it). We were able to refinance at a low interest rate a few years ago so we'd rather keep the cash and do other things- we're fairly good with investments, plus we have two expensive children!

We plan to downsize in our 50s once the children have left as we've realised that neither of us particularly enjoys looking after a house.
If the right tiny house or condo comes along, we'll buy it and sell our house.

Everyone has their own definition of security, I suppose.

We overpaid on our first property, a central London flat. That now pays for my kids at university, so I would say it is a huge life changer. We still have a mortgage on our family home though, but will overpay that too.