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

Honestly you are just embarrassing yourself now.

How would you even know someone was doing overpaying unless they told you in which case that's a weird thing to go around announcing to acquaintances and strangers?

If you can afford to overpay, it makes a lot of sense to do so (assuming you don't have other debts with higher interest rates that you should pay off first)

Well no, I don't agree with you. I don't find people who want to be financially prudent smug.

BUT I don't get the obsesssion with mortgage overpayments. Especailly now when many people still have low interest rates you might be loads better off putting money into investments or savings than your mortgage because the inerest the other way is so much higher. You can then take that savings off your mortgage when you remortage to a higher rate.

Mortgage overpayment is seem as some kind of holy grail of savings but the math sometimes doesn't add up.

Clearly if you overpay on your mortgage, it costs you less in interest payments and you get to be mortgage free more quickly. I have overpaid on my mortgage for 8 years and my last payment is in May. I don't feel smug I feel relieved. I will probably now be able to help my adult kids if one of them were to lose their job and struggle with their mortgage payments.

It just makes financial sense sometimes. If the interest you are paying on your mortgage outstrips the interest you are gaining on your savings then you are much better off overpaying on your mortgage.

We had an offset mortgage and also overpaid when we were able to. Mainly because I have no desire to pay multiple thousands of pounds in interest into a black hole of nothingness that lines the pockets of millionaires.

Not smug, just sensible. We have no mortgage now FYI.

Example interest goes up to 3.9 soon. ?.why would it go down just by some small payments.

I see the professional financial advisor has logged on to help.

Oh, I didn't realise that by having a mumsnet log in, I get a lumpsump in a few years. Who do I send my details to so that I don't miss out???

Actually one could say it is reckless taking on a mortgage assuming that an inheritance/pension lump sum/insurance policy will be forthcoming.

Are you just jealous, OP? I can’t see where you are going with this, other than saying ‘I don’t understand how other people live’.

I’m not banking on getting any inheritance at all, as I want my parents to use all their money to live a good life and pay for whatever care they need.

I will get a lump sum when I take my pension, which will be enough to pay off my mortgage at that point - but I am still overpaying a little now, so I owe less overall.

I think you could do with some financial education, OP. There are courses available.

🤣

Right, so making overpayments is smug but assuming you're going to get an inheritance that'll pay off your mortgage is... what? Salt of the earth?

Jelly much hun?

My DH is very money savvy (too much for my liking) as he hates spending only saving!!!! We overpaid our mortgage for about 10 yrs when we only had 1 wage coming in and literally we did nothing and spent no money for 10 yrs - H was then left some money so we used that to pay off the remainder. We are both late 40's and mortgage free now so we now have more disposable income (although H won't spend it - I do!!!!) as fed up of not reaping the benefits. If you can afford it is a great thing to do.

Most people don't over pay. Unless they are on a high salary and are those sort of people.

Surely those are interest only mortgages otherwise they'd have been repossessed pretty sharpish!

Is this "lump sum" at the end of the mortgage term the insurance policy people with interest only mortgages are supposed to take out, because otherwise they'd like their home?

If you have a normal repayment mortgage it is sensible to pay it off as quickly as possible, not smug at all. Doing so will save thousands in interest.

I don't think you have a clear grasp of the topic OP.

Oh dear.

Lump sum?! Who the hell gets one of those?

We are not high earners. We overpaid.

I know. I was about to try and explain but I don’t think OP is listening.

I think people worry too much about over paying on mumsnet.
Just pay what you agreed to.

Yes, there is absolutely no point when they can't grasp the basics. Don't waste your time.

Because you are paying interest on a lower amount therefore the interest due is lower.

Most people are (or should be on) fixed term mortgages so the Bank of England Base Rate won't effect them, unless their fixed term is coming to it's end soon.

Also the base rate at the moment is 4.25% - no idea where you have got 3.9% from unless you're not UK?

I know this thread is a wind up and I shouldn't engage, but go on OP, elaborate - what are "those sort of people"

I overpay because I kept my payments the same when the interest rate dropped. Should hopefully mean that the payments don’t go up when I need to remortgage - but I may or may not be overpaying then. Assumed most people would do similar tbh.