If you are mortgage free, where does your income go?

[Presentxx]

We will be in this position soon and I’m intrigued as to how others spend/utilise their income when the biggest debt has been cleared? Hope this isn’t too invasive, but its not something I find myself comfortable asking those closest to me.

This will be us soon too. We are still paying for childcare so that won't change initially but we're looking to be making home improvements, saving for retirement, saving for DC's future and some nice holidays once things are more stable. I'm definitely not the kind of person who needs to start buying designer clothes and Ferraris.

I benefited massively from having mortgage free parents and I want to do the same for DC.

I still have a mortgage but it's only £250/month so if I didn't have to pay that I'd save it or have an extra holiday. Mind you at £3k per year it's basically a weekend at centre parcs so it's not going to change my life unfortunately.

I'm early 40s with kids at home

Really interesting thread as we are due to be mortgage free shortly.
I expect the extra money will go towards renovations, holidays and savings.

Pass, don't go for a weekends at center parks then!!

Spend your 3 grand on something better.

Get more luxury and better value for your ££. Get a cottage on the sandman lake at efteling theme park then drive half an hour and stay in a luxury lodge at berkse begen safari Park.

Paying for things for DC who both have their own homes with mortgages but not big incomes. It's nice to treat them to things they need but can't afford. I gave them both the deposit for their first homes. My DD's boiler packed up last year so I paid for her new one. I have a house which has needed stuff doing, redecorating etc so I've been catching up on that. I used to have mini breaks but Covid stopped that. I went away in the UK for 5 days recently though. I'm a widow and still working almost full time.

Extra money is for supporting our DCs in their Masters .
Also , we've had some plumbing issues put to right and have had a new bathroom ( 20 years overdue!)
Whole house has been decorated and we're now planning a greenhouse ( oh how I've waited!) and we are are about to update our 20 year old kitchen.

I took a less well paid job to protect my damaged mental health. Didn't really work as it turned out as the new place was toxic, but using spare money doesn’t always involve spending.

Supporting child through college, bought newer cars, more holidays and savings.

Student/ young adult children starting out in difficult careers

We are mortgage free.

DH has been able to take the slower track at work, keeping to family friendly hours and gradually working his way up to a job he enjoys at a company he likes. I've had 9 years off from paid work apart from a couple of periods of very part-time paid work.

We save about 30% of our income into long term investments that we don't access even for emergencies - these include a private pension for me and we save for DC.

paying off other debts, and saving for pension. Had a late baby who's still only 4 so he costs alot and a teen etc..

Teenagers - school fees
Savings/investments/pensions.

We choose to maintain a minimal offset mortgage which was strategically paid down in 17yrs instead of 25yrs in advance of starting to pay secondary school fees. Overpayments achieved by high household income relative to mortgage amount. We basically chose to pay school fees instead of paying a much larger mortgage.

Childcare

And in answer to the question about becoming mortgage-free relatively early, a lot is due to good fortune

Or conversely, bad fortune such as inheritance from decreased relatives or due to life insurance payouts from death of a spouse.

I remember in my 20s during a conversation with fellow mature students where we were having a general moan about being skint and rent, mortgages, bills etc and it was mentioned that one of our group was mortgage free.

However this was due to his wife's first husband being killed in a well known industrial accident (we were chemistry students and all in the industry where the accident had happened) a few years ago and her receiving life insurance and compensation.

Indeed, Barbara.

DH lost both his parents as a teenager. In turn they'd had inheritances (inheriti?!) from their parents who'd died quite young. It is hard and lonely being an only child orphan of two only child orphans.

However, some people are in the same situation without even the life insurance payouts. So there is an element of good luck in the bad luck, I guess. And for me, only good luck really - I haven't been through any bereavements!

We’ve also kept it quiet that we have been mortgage free since our early 40s (now early 50s) as DH is self employed and thinks people would expect silly cheap quotes for work if they knew. So we’ve only told a couple of very close friends.

I'm not sure it should be a surprise for people in their late 40s being mortgage free.

We're that age and only have a few years left (we're not in a rush to pay off as the interest rate is less than 0.5% and we are making more than the amount of interest by a nearly equivalent amount of savings, also the monthly payment is less than 10% of our income so wouldn't make much difference anyway and we're currently prioritising DPs pension as he didn't have much opportunity in this respect when we were younger).

We bought in our early 20s because houses were cheaper to buy than rent and anyone taking out a standard 25 year mortgage at that age would now be done unless they've remortgaged or bought a significantly more expensive house, which not everyone does.

@Presentxx Have you ever come back? It seems such an odd question to ask other people! Surely you would know OP how you want to spend that extra cash and it depends on how much it is. Might be £200 a month or £2K a month you will have.

We will have ours paid off in 7 years and both plan to cut our hours at work to part time. We would much rather have less exhausting lives than have lots of disposable income.
Anything else will be put towards a holiday and into our pensions but we probably won’t have too much spare £ if we are cutting our hours down

We bought in our early 20s because houses were cheaper to buy than rent and anyone taking out a standard 25 year mortgage at that age would now be done unless they've remortgaged or bought a significantly more expensive house, which not everyone does.

We moved 3 times by the age of 40, each time doubling our mortgage.

We also supported 2 DCs at uni (paying rent for both of them at the same time) then funding a masters for one.

Hence not being mortgage free till 60.

And for anyone nosey you can usually in England do a £3 Land Registry check on line of their house and it will tell you if it has mortgages on it. I don't agree with that public register but they decided to make it public a fair way back and it is now so.

Very few people will take out a mortgage in early 20s and not add to it ... either to move up the property ladder or extend/renovate.

We had an offset mortgage so never got a large drop in mortgage expense as it went down gradually till it was £30 a month. Technically we still have a mortgage as we still have £40,000 borrowing facility. Keeping it in place until two oldest finish university. We will not notice the benefit until the oldest two have completed university. It has buffered us from the cost of having a disabled child and we would be in financial trouble if we needed to find the payments now.

We have been mortgage free since 2013, I was 43 at the time. I don’t think that we spend that much differently, maybe spend a bit more on holidays than we would have done otherwise.

I think the main impact it has had is around work. DH has been contracting and has been able to have little gaps between contracts. I have also had time off, went back to do a full time masters in 2018/19. I don’t think we would have been able to have this flexibility without being mortgage free.

We took the mortgage payment amount and put in post tax retirement savings. What we've never seen does not feel like a loss, and it is adding up to cover at least a couple of years of retirement living.