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Original poster

To pay off £13k mortgage?

209 replies

shookitoff · 05/04/2022 09:28

We’re both mid 40s, have overpaid mortgage for years through increases in salary and saving. It has £13k left so payments are about £80 per month. This is obviously really affordable but on an emotional level I’m drawn to the idea of paying it off in full and being mortgage free.

Any advice? Has anyone fully paid their mortgage off and do you feel it’s worth it compared to having a small mortgage?

Thanks

OP posts:
SGChome20 · 05/04/2022 12:29

I would pay it off to save on the interest but keep paying £80 a month or a bit more into an investment fund for retirement.

I'd love to be in your position. Unfortunately we have a good few years and 10's of thousands left to pay!

lizziesiddal79 · 05/04/2022 12:35

Pay it off. We did early 40s. It’s life-changing psychologically.

BarbaraofSeville · 05/04/2022 12:38

But not financially. Unless you're on or close to the breadline, an extra £80 a month in your budget is barely noticeable.

JudgeRindersMinder · 05/04/2022 12:42

I’m going to go against and say that for £80 a month I’d not eat i to my capital

100PercentNever · 05/04/2022 12:43

Yes pay off the mortgage !

Then save 6 months savings

Pay into pensions

Whingasaurus · 05/04/2022 12:44

I paid off my mortgage at 51 the interest was about £9 a month in the end but the feeling of owning my home outright was, is and will always be amazing. Well done for overpaying. Overpaying my mortgage is the single best life decision I made. My bf and I started out pretty much the same, same house same mortgage both working single parents but she had great holidays, lovely cars and 3 new kitchens and still has a huge mortgage. I'm retired and helping with dgchildcare and don't regret a thing. Neither did she btw so no judgement on those who choose to spend.

RandomMess · 05/04/2022 12:49

In your circumstances it's sounds sensible.

We have a massive over payment offset against ours that we can draw down if we need to. No other savings hence owe about £500 on the mortgage 🤣 paying £3 per month or something.

We are slowly starting a savings pot though.

EthelTheAardvark · 05/04/2022 12:52

Have a think first about whether there are any big works you may need or want to do on the house, e.g. roofing repairs, new bathroom fittings, extensions, conservatory, garden office etc. You might be better off using the money on those rather than potentially needing to borrow again later at a higher interest rate.

Blossomtoes · 05/04/2022 12:52

Get shot of the mortgage. The feeling of liberation is massive. It’s the best thing we ever did.

MrsWinters · 05/04/2022 12:59

Pay it off and save the interest.

DoWhatYouLike · 05/04/2022 13:02

If you've got £13k, yes, pay it off. We paid ours off about 6 years ago (in our mid-50s then)

pippapoo62 · 05/04/2022 13:23

Overpaid for 10 years ,when it got to £5000 we went into the bank and paid it off . This was 4 years ago and we can now put money away and can help our 5 adult children and grandchildren with days out . Do it and enjoy the freedom of not having to pay out each month .

Original poster
shookitoff · 05/04/2022 13:32

Thank you all, I hadn't imagined I would get so many responses and it is all really thought provoking! It's given me a lot to think about.

I realise I should have put more detail in my original post. For those who asked, we took out a mortgage of £166k 6 and a half years ago. House is now worth around £300k. We used to live on a much lower income but one of us does the kind of work where you train for years and earn much less then eventually earn a better salary.

Our current mortgage rate is 2.75% and there is no penalty for clearing it. We have to pay £80 per month but have been paying anything up to £5k depending on the month! Our current household income is around £6.5. I think what most people would do in our situation is move to a fancier house and borrow even more. But we feel that our house is fine and we're not into amazing cars etc.

Actually a wider issue is that once mortgage-free, I would love to go part-time (as many pps have said) or take some periods out from work as I've never really had the chance to do this. Our current income isn't really sustainable as I don't want to be full-time in my current profession longer term.

I will look into the possibility of maybe keeping a very small mortgage. For some reason that hadn't occurred to me- I thought we should either stop overpaying now or get rid but I'm amazing that you have pay £1 per month on a tiny mortgage!

DC are end of primary/ start of secondary so college fees are not upon us yet but I realise we do need to shift our focus there soon.

OP posts:
BasiliskStare · 05/04/2022 13:32

I agree with @TortugaRumCakeQueen and others - given you have savings I would pay it off - you can always remortgage against the house in the future if you need to. I reckon the finances are debatable as to which better but to own your own house I think feels "safer" & takes another thing off the bills. But other opinions are available

BasiliskStare · 05/04/2022 13:34

Sorry cross posted

Itsbackagain · 05/04/2022 13:54

I paid off mine after an inheritance- best feeling ever. Even more so now as DP is unemployed and I have cancer and fuel Bill's, it's one major thing I don't have to worry about.

Enzbear · 05/04/2022 13:58

We're mortgage free now. You can't beat the feeling. As long as you have other savings, definitely do it

Bonheurdupasse · 05/04/2022 14:01

NB the bank holds the deeds (physically), if you had no mortgage you would have to be responsible for that, possibly to pay a fee for safeguarding them somewhere.

JinglingHellsBells · 05/04/2022 14:05

Two things strike me

1 You live in a low cost area re housing unless you had a very large lump of equity as that mortgage is quite low considering house prices in some areas.

2 Do you mean you have a monthly income of £6500 gross or after tax?

Your savings seem quite low with that kind of income- which is over £70K pa. I can see you have paid off a lot of your mortgage rather than invest. That may not have been the best move, if you could have invested more in pensions or stocks and shares.

I suggest you find a really good financial adviser and plan what to do next with the money you have coming in each month. You 'only have' just over £30K in savings, (or £20K if you pay off the mortgage) which as a rainy day fund in the event of illness/ redundancy / cars/ major house repairs etc is not a fortune for a family. ( I know a lot of people have nothing like that in savings.)

I'm saying the same as others which is don't get blinkered by paying off a small mortgage when you might need another £10K in savings to feel secure.

JinglingHellsBells · 05/04/2022 14:06

@Bonheurdupasse

NB the bank holds the deeds (physically), if you had no mortgage you would have to be responsible for that, possibly to pay a fee for safeguarding them somewhere.
Your solicitor who holds your Wills can do that.
Lightning020 · 05/04/2022 14:10

Title deeds are electronic these days due to the digital age.

Blossomtoes · 05/04/2022 14:10

Now that the Land Registry is digital, physical deeds are unnecessary. Our are interesting but pointless.

JustJam4Tea · 05/04/2022 14:11

I don't understand why you would keep a tiny mortgage....?

coodawoodashooda · 05/04/2022 14:16

If you ever plan to move id keep my small mortgage. It's easier to get another mortgage with a current mortgage. Other than that Id definitely pay it off. Well done.

JinglingHellsBells · 05/04/2022 14:17

@Blossomtoes

Now that the Land Registry is digital, physical deeds are unnecessary. Our are interesting but pointless.
You most definitely do need hard copies.

Your house is your most valuable asset.

You can't rely on a computer system to hold your data securely for decades. All kinds of things can go wrong with data systems.