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AIBU?

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Original poster

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

267 replies

Presentxx · 06/09/2020 14:31

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.

OP posts:
C8H10N4O2 · 06/09/2020 16:12

I'd be interested in knowing how people are mortgage-free

In our case by having a repayment mortgage and overpaying in the early years by a relatively small amount (and keeping payments at the same level when interest rates went down).

For many years I managed keep it going paying about 50p a month (cheap document storage!) but eventually they got bored with us and sent us the deeds to look after ourselves.

Effectly paying a bit more in the early years knocked a decade off the term and a huge amount off the total repayments. Some mortgages these days don't permit this, not sure why really.

Bagelsandbrie · 06/09/2020 16:14

Fuck knows. We’re still permanently broke! I think we just overspend on days out / eating out etc being very honest. I’m a firm believer in life is for living. We don’t save much. We just spend and enjoy ourselves as much as we can. My mum died of bowel cancer in 2019 and I’m an only child - dad not around etc- so everything she had came to me and it enabled us to pay off our mortgage.

user1497207191 · 06/09/2020 16:15

As soon as we paid it off, we put the same amount into pensions as neither of us had occupational pensions from jobs.

Babyroobs · 06/09/2020 16:15

@C8H10N4O2

I'd be interested in knowing how people are mortgage-free

In our case by having a repayment mortgage and overpaying in the early years by a relatively small amount (and keeping payments at the same level when interest rates went down).

For many years I managed keep it going paying about 50p a month (cheap document storage!) but eventually they got bored with us and sent us the deeds to look after ourselves.

Effectly paying a bit more in the early years knocked a decade off the term and a huge amount off the total repayments. Some mortgages these days don't permit this, not sure why really.

Paid it off for 22 years, overpaid a little for about the last 5 years then sadly inherited money when both DH's parents died within a few years of each other.
MissConductUS · 06/09/2020 16:17

For us it's extra retirement savings, uni costs for the kids and work on the house.

I'd be interested in knowing how people are mortgage-free

This is our third property. We made so much on the sale of our second house in 2003 that with some contribution from our savings we were able to move to a town further away from the city and pay cash for our current house. Neither of us works in the city now so there's no extra commute either.

user1497207191 · 06/09/2020 16:18

@ploopgh

I'd be interested in knowing how people are mortgage-free.

I'd wager most who are will be older so got on the ladder earlier & had much cheaper prices. If young then likely an inheritance.

I don't know anyone with mortgages of a couple of hundred quid!

We saved for years before buying a house so had a hefty deposit to put down. Hence much smaller mortgage, meaning smaller mortgage repayments so we could over-pay right from the start. It's interest that's the killer on a mortgage so pays dividends to keep it small and pay it off asap. We could easily have borrowed more to buy a house twice the cost, but why do that when you can buy one that's perfectly good and more affordable?
Foxyloxy1plus1 · 06/09/2020 16:19

We funded a house deposit for one child and paid for a wedding. We helped out the other one with housing in a different way.

We don’t have much, don’t have holidays, other than an occasional week in this country.

ButtWormHole · 06/09/2020 16:20

Not mortgage free yet (working on it) and I would do a mixture of:

Investments
Pensions
More fun money (I’m on a tight budget right now)

Purplewithred · 06/09/2020 16:21

Mortgage free through combination of many years of paying mortgage + downsizing + pooling 2 equities post divorce.

I work part time which accounts for most of the difference; we do save into pensions/accessible savings too.

RhinestoneCowgirl · 06/09/2020 16:21

We paid our mortgage off about 2 yrs ago, it was only about £500 a month at that point. We now put same amount into savings, which are intended for helping DC out with university, or as is looking likely at the moment, rainy day money for if DH is made redundant...

Othering · 06/09/2020 16:21

Car. Horses. Food. Shares. Travel (Just been to Scotland and london). Just generally monkeying about really 😀

BuggerOffAndGoodDayToYou · 06/09/2020 16:22

@sapnupuas

I'd be interested in knowing how people are mortgage-free.

We are planning to pay off 10% extra this year and next which should knock off a fair few years. We forgo expensive holidays and fancy cars in order to save as much as possible.

Simply by paying the interest payments and the endowment payments every month for 25 years. The endowment then matured and paid the capital of the loan plus a very large extra amount which paid for a new car and extension among other things.
megletthesecond · 06/09/2020 16:22

I'm not quite there but I plan for it to go on savings / pension, teenage things and driving lessons.

JinglingHellsBells · 06/09/2020 16:23

we weren't mortgage free till 60 and that was with overpayments each month.

We have put a lot into savings and since no mortgage we have made house improvements, with a view to possibly moving upmarket or buying a 2nd home close to family.

beela · 06/09/2020 16:23

I'd be interested in knowing how people are mortgage-free

Inheritance. I'd sooner my dc had grandparents Sad

ploopgh · 06/09/2020 16:24

We saved for years before buying a house so had a hefty deposit to put down.

Our first deposit was 100k so not small.

We could easily have borrowed more to buy a house twice the cost, but why do that when you can buy one that's perfectly good and more affordable?

It depends where you live though doesn't it?

Glittertwins · 06/09/2020 16:25

More pension payments and more into savings for the DCs when they are older plus a few little luxuries here and there

VinylDetective · 06/09/2020 16:25

@thegreylady

We are retired and mortgage was paid off just before so it just enables us to live comfortably.
Same with us. And yes we drive nice new shiny cars that don’t cost anything near £700 a month.
BlowingmyJets · 06/09/2020 16:26

Not mortgage free but for the first time in 14 years we are in a position to start paying more off it, making over payments of £50 a month.
We are early 40s, if we can significantly reduce it by the time dc are at uni, that would be amazing.

ploopgh · 06/09/2020 16:28

We are almost 1k a month better off now as no nursery costs. However we may move so that feeling won't last!

sapnupuas · 06/09/2020 16:28

@beela

I'd be interested in knowing how people are mortgage-free

Inheritance. I'd sooner my dc had grandparents Sad

100%. I don't have any grandparents left and I really miss that relationship.
Doyouthinktheysaurus · 06/09/2020 16:28

We are boring and just save what we would have spent on our mortgage.

It's a lovely position to be in and I feel really fortunate to not have to worry about housing costs anymore.

DalzielandPaxo · 06/09/2020 16:28

Investments, house running costs, expensive hobbies, savings, holidays and occasional large purchases.

HaggyMaggie · 06/09/2020 16:29

Savings, pension increases, holidays and reducing my hours at work.

Soon disappears.

GrumpyMiddleAgedWoman · 06/09/2020 16:29

I'd be interested in knowing how people are mortgage-free.
Kept an eye open for cheap mortgage deals and switched when possible, shortening the term rather than decreasing the repayments. Piled every spare penny into paying the bugger off, so if we had any savings not urgently needed for something else, off-loaded them to pay down the mortgage. Lived fairly frugally, drove cheap cars into the ground, had some pretty basic holidays - we were fortunate in that DH earned well, but we chose to live below our means to get shot of the mortgage.

It's interest that's the killer on a mortgage so pays dividends to keep it small and pay it off asap.
Yep.

And now:
Pensions/savings
Helping DC at uni
Holidays (well, last year...)

We were very lucky to be able to do what we did, in terms of income and health. It helped that we both grew up in skint families so have a shared paranoia about debt, and are both of us able and willing to live within a budget.