Over paying Mortgages

[Aquarius1234]

AIBU to find those that over pay their mortgages smug?
Moat people can just about afford or want to pay the standard monthly payments. Let alone want to use any more money/ savings on it !!
Why worry about paying off when in 20 years your probably get some form of lump sum anyway

And I suppose this depends on what is important to you and what your values are.
If it’s a choice between never going anywhere - not being able to take my kids swimming or to museums or to a cafe ever vs shortening the lifespan of my mortgage by a year or two, yes I’d prioritise my lifestyle.
If it’s simply a bit of extra money and my lifestyle is acceptable (does not need to mean extravagant) then I’m the kind of person that always prioritises saving and mortgage overpayments.

If things are really that tight then don’t worry about overpaying right now. Just try to pay what you owe and get through a tough period in your life. But this doesn’t mean that overpaying might well be a prudent choice for you in 5-10 years time, it’s just not prudent now.

It's a fact of live not everyone can afford to save. Whether on 25k a year or 60k.
And some choose to spend over saving.
Not talking about me. I could only save when I lived with parents for ages.

*life.

I don't know where you live, but where I am we have things called email, and things called phones. They're methods of communication so if you were in that situation you could simply phone or email your mortgage provider and get the repayments recalculated.

But maybe they don't have such things in OP-land 🤷‍♀️

I know various average people that are sane and have normal jobs. They don't care about being mortgage free as it's just a fact of life. 25 or 35 year mortgage whatever .
They spend more on other bills and loads of other stuff compared to mortgage payments.

I'd be freaking out that they money didn't get there.

There's a reason why some people are poor.

I'm actually quite worried that you don't know all of this.

You can't pay more than 10% of the balance now if you are still in your old fixed deal. You can pay it at the start of a new deal by borrowing less.

If you haven't yet completed on a product transfer with your existing lender (as in it's not started yet) then yes, you can still change it.

Yeah, on massive monthly car payments. Yet more interest. Go them, I guess.

Oh, yeah, the massive inheritance of £11.5k that I got wouldn't have touched the sides of the average mortgage.

If you have the money to spare, overpaying on a mortgage makes sound financial sense, unless you get a better rate of interest on savings than you are paying on your mortgage.

Compound interest works both ways!

None of your comments make sense - if you overpay you will be giving the bank significantly LESS money not more. And why would overpaying your mortgage mean you spend more on energy and other bills? Electric/gas/internet/tv/water/council tax etc cost the same whether you're renting, paying a mortgage or fully owned!

Also not sure why you assume everyone will be getting a 'lump sum' at some point anyway - if this is linked to retirement then I took out my mortgage at 25 so will need to repay it by age 50 - even at current rates I can't get my pension until 55 (private) and 67 (state) - and by the time I actually retire it will have definitely increased, so I'll need to pay off the mortgage way before I get any lump sum!

If you don't understand the basics of what you're talking about maybe you should research it first before putting your (incorrect and uninformed) opinion across?

I knew the 10% thing.
Hopefully if fixed rates decrease a little I can get a better deal and change a few weeks beforehand.

What makes you think fixed rates are going to decrease?

OK. I admit I haven't RTFT, only the OP's posts but I'm fairly baffled about the point they're trying to make.
It's absolutely sound advice to pay more off your mortgage, if you can, if the interest rates are higher than the savings rates.
I overpaid as much as I possibly could when I took out my last mortgage. (That sounds as if I've had loads, but no: only two). It was a small mortgage and I was able to half the length of it. It is now paid off. This gives me a measure of security and peace of mind.
Not everyone will be as fortunate. If there's no money left over at the end of the month, you won't have the opportunity, but if there is, and you choose to prioritise something else (which is entirely up to you), then how can you complain about people who have made different choices for equally valid reasons.

Oh do shut up OP!

You constantly contradict yourself and make very little sense at times. There are plenty of good and free resources out there, I would suggest you educate yourself. The MSE website has guides on most topics including mortgages, overpayments, LTV etc.

This misses the point that household finances change over the decades that most mortgages take to pay off.

I know a few families who were financially sinking 5- 10 years a go - childcare costs were crippling and they were borrowing money from relatives just to pay for essentials. Now they are better off and able to save money and have a few more treats. They are slightly further on in their careers at 40 then they were at 30 and childcare costs are close to zero. Life changes over the years.

Just because people are comfortable and overpaying doesn’t mean they were always so comfortable. And just because you aren’t able to save money now doesn’t mean you won’t be one day.

I think it’s clear from your posts you don’t really understand mortgages at all. I personally don’t overpay mine and instead invest either inside or outside of my pension instead. I’ll worry random internet people thinking I’m a dull frugal type when I’ve retired early ☺️

Indeed. Totally contradicting herself about spending money on nice things vs boring frugal people and then not having enough money to save. But I fear this comes from really simple lack of understanding of basic financial management. The OPs children will one day be posting on here asking for advice about their mother who has no savings, no retirement income and no way of paying down their mortgage because they kept extending it.

Well yes ok saving money in a high interest account is better monetarily. But life is about more than money.
The relief I felt paying off my mortgage was huge.

Until very recently interest rates were a pittance unless you locked your money away, still to keep those rates you'd have to move the money around every year. Easy access to the savings can be very tempting, if the money is already paid towards the mortgage, theres no getting it back.

There are downsides with investing, depending how much interest you earn, the HMRC takes some, having it out of reach when you need it. It can take up a lot of time to maybe gain a few quid. Depending on what you invest in you can lose the lot. Other things that I currently cant think of.

I wonder if the OP could advise me on what to do with my savings account?

OP has to be a troll or just a bit of a numpty.

Having a small mortgage can be helpful for credit rating and also reduces the chance of someone stealing your house so paying it off completely doesn't have to be a priority. It's also likely that new mortgage holders won't be able to pay it off due to longer mortgage terms. With a poorer healthcare system and older retirement age it might be new mortgage holders won't get a happy retirement so I can see why people might want to prioritise other things. OTOH banks are used to people making overpayments and have mechanisms in place so should be ok op

Indeed. No point waiting years before living the life you want.
Things aren't what they used to be in the past.
Loads will work till late 60s early 70s now.

You can live your life while overpaying mortgage if you make sure your mortgage is small.

YABU

We are overpaying ours off for our own benefit, not for anybody else, so no, no smugness here. It surely differs what size everybody's home is anyway. Ours is a mid-terrace (in an expensive area, mind) so therefore would be easier to pay off than if it were a large 4 bed detached. It isn't likely to be our last mortgage either. We are saving all those years of interest, so of course it is a brilliant thing to do.