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

@Aquarius1234

Pffft. Those who merely overpay are absolute amateurs.

It's not until you pay the whole caboodle off early that you truly earn those smuggo stripes.

I've paid mine off (I'm late 50s). I'm not smug about it because I don't tell anyone. It's no-one's business but mine. I prioritised paying off my mortgage over expensive holidays, cars etc. I have a friend of a similar age who still has a big mortgage but she's had exotic holidays and travelled the world in a way I never have. That was her choice and it was different to mine. We're all entitled to choose to spend our money how we want.

Presumably a lot of years ago?

Average house price now is about £300k. If your household income is £30k, you wouldn't even qualify for the mortgage to buy that house.

What I find smug is people who took out mortgages for £50k when you could easily buy a house for £70k proudly claiming they've paid it off.

My mortgage over a 9 year period would be £2800 a month! No one on a £30k income could afford to do that.

No, you're really not. It's a debt that you pay interest on. If you overpay that means you pay LESS to the bank overall.

I do (smugly) make overpayments most months, I have a relatively lower wage but don't drink, smoke, drive a fancy car, wear much make up or fancy clothes. I'd much rather over pay my mortgage and get rid of the debt earlier (having paid less interest) than still be paying it off until I'm 65+

Nah, my ‘inheritance’ is actually my DM’s money and currently paying her nursing home fees of £5,500 per month. No lump sum will be left.

I have paid off my own mortgage though, through damned hard work, careful budgetting and a determination not to have to sell up when I retire.

YANBU but not for the reasons you stated. We don't overpay our mortgage because our savings are invested in an interest bigger than the mortgage interest. We get 7% at a regular saver, or 3.55% at an investment account, etc. and our mortgage interest is less than 2% atm. But not because we just think we'll get a random lump sum falling on our laps in the future LOL.

I over pay my mortgage and saved £14000 in interest so far!

I work hard and left home with £1.50 in my pocket, have been given a penny by my parents or anyone else

Exactly!

Is anyone really this thick?

Yes I think we all get it.

Apart from maybe OP?

You just sound bitter

It’s only 3 days into the Easter holidays and already the kids are bored…

What the actual absolutely fuckity fuck did i read?

There's a few posters on here who seem to still maintain pverpaying is better regardless.

Do you understand how mortgages actually work? You pay interest on what you still owe, if you overpay then you pay less interest overall so you pay the bank less money! Do you think people who are overpaying are paying more than they borrowed plus the interest or something ?

Terrifying levels of financial illiteracy.

Overpay on the mortgage even if it only a tenner a month. It all adds up and saves you more than the interest that would accrue if the over payment money was put in a savings account.

For us, the reason we could pay off early is that we bought in the 90's when housing was affordable. I bought in 1994, in the south east, for £29k. Only kept it 4 years and doubled my money which was then a good a deposit on a London flat for me and (now) husband. We lived in the flat for 14 years and sold it for 4x what we bought it. Moved to suburbs and bought what we could afford to buy without increasing the mortgage, which after over paying for most of those years was really quite small. But for us, it means we have financial security. We're not high earners, and never will be now we're both approx 50, but we can easily survive on just one income if we had to. We could easily be living in a much larger property, but this is the choice we have made. Smaller property but financial freedom.

No, youre really not. Over time you are actually giving them less, as you are paying less interest.

If you're finding people smug, maybe its because you feel badly that they are more financially literate than you seem to be?

I think that there are three things that you are missing:-

1. Banks like to make money - this means that it is fairly rare that you can get an account where you earn more interest than you pay on your mortgage. If you shop around you can sometimes get good deals but they are usually for a limited time and up to a maximum amount. Also - once you start earning more than £1000 per year in interest (or £500 if a HRT) Mr Taxman takes a nasty slice. In the medium term paying off the mortgage is nearly always best unless you are willing to go down the stocks and shares route. And risking my capital was never something that appealed to me.
2. Utility. (Ie how happy does the money make you?) I was amazed what a difference to my well being paying off the mortgage actually made. I suspect I would need a very expensive week in the Caribbean to obtain that level of “inner peace” otherwise.
3. Human nature. Money burns holes in pockets. It is much easier to accidentally spend savings than it is to remortgage and spend the proceeds.

If you overpay you can either use that overpayment to reduce the term of your mortgage, or reduce your monthly payments in the short term. Of course it wouldn't increase your monthly payment, that's a crazy idea!

I over-pay every month, I think lots of people do.

But not if the interest rate on savings is higher than that on the mortgage. Doesn’t happen often, generally only when interest rates rise quickly and people are still on fixed rate mortgages from beforehand, like ATM.

OP is either a troll or thick beyond comprehension, don't waste your time...

Oh dear. No, this is so untrue. You definitely end up paying them LESS.

CBA to RTFT, can anyone enlighten me as to what this lump sum is in 20 years please?!