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.

I don't agree, it's always better to be debt-free. You don't know what's around the corner, better to have no debt if you lose your job

No it isn't if the debt is costing you less than the money you are making using the money that you would use to pay the debt off.

You still have the money to pay off the debt whenever you want, including if you lose your job.

it's always better to be debt-free
unless we get negative interest rates.....

@user1497207191 I don't understand your point?

Most of my furniture is 2nd hand & Im good at upcycling & DIY. Batch cook regularly. Sell loads on eBay, £300 last month on garden stuff & household items no longer needed.

Early retirement
Putting money aside to help my children when they need it
Saving a bit for later
Holidays but not this year with covid-19
New clothes
Better food

Some towards school fees which would have felt like a stretch otherwise (could have afforded, but would have felt it was a bit too tight for decent savings too)
Continuing to work part time.
Building up savings to enable purchase of another property mortgage free as a BTL 5 years after becoming mortgage free.
Probably being able to retire at 60 I stead of 67.
Buying cars outright when they need replacing.

The key thing is feeling like that money gives you more options. We don't have especially more luxurious holidays etc, but we have lots of choices.

DD at university, another due to in 2 years,not worrying about expenditure, savings.

We became mortgage free just over a year ago after basically overpaying like lunatics for the 10 years we had the mortgage. Felt great like a sense of freedom to choose the next steps. Our kids are still smallish and I’m 42. Whilst I’m not looking to reduce my full time hours my husband did totally change careers to something he’s always been passionate about and now is very happy. He works around the kids and school/holidays so works perfect for our family. We don’t necessarily do anything more with the spare money (mortgage was around £650) other than save for the future. Our income isn’t huge, pretty modest by Mumsnet standards, but it’s enough for us and we’ve always wanted to have the security of a home that’s paid for. Our next focus is a U.K. holiday property. Good luck!

*Work hard, save hard, live cheap,

If you can cook, garden, DIY, upcycle, entertain yourselves and your friends, etc, then living cheap is easy and fun.*

We are already doing this, hence why we are in the position to pay off 10% (the max) this year, and next, at least.

I was interested to know if others have done the same, or inherited, or are of an age where they had paid for the full term already. Just out of interest, really.

Re saving v mortgage, its the eternal debate isn't it, and will depend on other finances, circs, jobs etc

Personally I think a mix of both, I'd never dry myself of savings to be mortgage free. But I'd never want a huge mortgage.
You literally risk the roof over your head if something dramatic happens.
Of course you could have enough savings to pay it off if needs be... Your mortgage could be 100,000 and you may have twice that in savings.

Personally I'd prefer to have the roof over my head 100% paid for. It's the mental and emotional peace that brings. No one can take it away from you. You will gain every penny when you sell it. Your dc will inherit every penny and of course it will grow in value.

user1497207191. - sorry haven’t worked out how to link back to the relevant post.

Student loan is £4200 and halls of residence fees are £6845 per year. And then there is food and other living expenses. We pay our kids accommodation costs and they live on their student loans. We can only do this because we have paid off our mortgage.

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

Agree with others a lot of it is about age & when you were able to get on the property ladder. Ex-H & I first bought in the wake of the early 90s recession & our house cost the same as our joint annual income (about £60K). We did it up ourselves, got a lodger in the spare room & paid off our mortgage within 2 years.

Admittedly it was a do-er upper & had been rented to problem tenants, but nothing structural - purely surface damage. I can't imagine many places where a late 20s couple in decent but non-London graduate jobs could do that these days!

As to what we did with the money saved - rented the house out, left our jobs & went abroad :) I feel incredibly lucky - not having to pay a mortgage means you have so many more options for work because life is so much cheaper with a guaranteed roof over your head.

I’m 49. Got a 25 year mortgage in 1996. Paid off a few years early(21 years)by overpaying.

sapnu, in our case we spent less than we earned (to pay off our mortgage on our last house) and I had picked a career (law) when I was 14 and moved to London because in those first you get big pay rises in your 20s so it is not that you graduate and get a job on a salary remaining the same for 40 years after. I also worked until I went into Labour and went back to work full time when the babies were 2 weeks old which is not what most women are prepared to do but it certainly means no loss of income and no impact on your earnings from having a baby. I also set up on my own at lower pay initially but that went very well and was one reason we paid off the last mortgage.

Actually we both in a sense had second jobs at least one day every weekend too and evenings too.

I was actually mentally mortgage free for a couple of years before I redeemed it,
My mortgage interest rate was a stupidly low base rate tracker (so .68%) so I put savings into an account that paid more interest (cash so no risk).
So I felt mortgage free for ages before I actually was, as I had the cash to pay it off (plus other savings/money in stock market)

@Sadik by your late 20s you're not really a graduate anymore though? Dh and I had both finished studying at 21/22.

[quote WhyIsItSoHardToPickAUsername]@Sadik by your late 20s you're not really a graduate anymore though? Dh and I had both finished studying at 21/22. [/quote]
You’re always a graduate if you’ve got a degree.

Basically we are trying to build up savings.

We are mainly trying to save to retire early (my pension is linked to state retirement age).

Balanced against that, we had our daughter pretty late, so there is the desire to reduce my working hours to have time to spend with her whilst she is little, and to provide some help for her for university or other training.

Also we’d like to have some money set aside for contingency in case the goalposts change and we are required to fund private education, or health or social care.

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

Two slightly above average salaries & live in an area of cheapish housing. Old enough to have benefitted from house prices rising over the long-term. Didn't make a big profit as we added an extension but when we moved after 20 years it cleared everything outstanding.

Income now goes on school fees.

You’re always a graduate if you’ve got a degree

Well, yes...the term graduate jobs to me means fresh out of uni roles that are poorly paid but have career progression.
So by your late 20s you're probably no longer in a graduate type job unless you changed your degree or started studying later for whatever reason.

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

Working a LOT on my own business in my 20s and 30s.

Where does your income go?

Some into savings for an early retirement or for the kids when they go to uni/need to buy houses. But really what I did is just work a lot less, so my spare income didn't change much. Instead of working the same amount and having loads of spare cash, I just work less. Semi-retired, I guess you call it.

Working a LOT on my own business in my 20s and 30s

Oh yeah, and buying a rather cheap house and not spending much money on cars and unnecessary material possessions.

Council tax and food (3 sporty teens and a sporty DH)

Rent!