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

OP isn't coming back to this thread as they're too embarrassed to admit they're financially illiterate.

Does the OP need a lesson in basic maths?
Where do such lump sums come from? Are these something that us common folk can sign up for??

Did you forget to plant your magic money tree when you were given the seeds with your first mortgage?? ;)

I want OP to come back, or someone else to come along who agrees, it’s getting less fun to read. Where are you OP?!

It means that people are living within themselves in other areas of their lives, which is admirable. I'd love to be able to, and maybe one day we can.

To those saying it's better to put money in the bank because the interest is better

Some quick maths:

£100k mortgage at 4% APR. round figures interest payable is £4K

If you were paying £100 a month in over payments and you want to eat the bank you'd need an interest rate of 330 percent.

Overpaying is generally always financially more sensible, unless you have a large amount saved, In which case you'd be better off just using it to pay off the mortgage...

I would urge you to google mortgage overpayment calculator. Enter your details and try overpaying monthly by a small amount (lets say 50 per month). You will be surprised at the large saving, which you would not give to the bank.

Of course different risk appetite may mean you prefer to earn more in investing, but for most of us, its worth the relief and futureproofing any crisis that may happen (higher interest rate, job loss)

Bought for 115k in 2010, mortgage £600pm (large deposit), paid off 2019.

I really don't think you understand mortgages!

But I can't wait for my mystery lump sum to arrive.

1, take out an ISA. Sorted re tax. Re the interest, of course you have to shop around and you need to compare your individual mortgage rate with your individual savings rate.
your 2 and 3 are basically the same, and is to do mainly with selfdiscipline and perception. But also you can lock in your savings so you can't access them (except perhaps to match your mortgage term) and can't squander them on a holiday.

We overpay on our mortgage all the time. We're not smug about it - none of our friends know we do this. Who goes around talking about their overpayments on their mortgage?!

Nope just you it seems. Other peoples economic situation is none of your concern. Paying extra back on mortgage when they can afford to makes good sense as less interest payments over the mortgage term, why this should bug you is anyone's guess 🤷‍♀️!? Jeez glad I'm getting a lump sum in a few years though £££££££££🤑

OP the website "Money Saving Expert" is your friend. You should find lots of info on mortgages, o/payments and (very important to understand) interest.

Also you may want to address the massive chip on your shoulder instead of lashing out at phantom smug over-payers.

Apparently the average person on MN will get a lump sum when their mum or dad dies in 20 years which they can use to pay off their mortgage. That's also how they're able to afford a deposit for a mortgage in the first place. No, it's not by working and saving.

I think maybe the poster means if you overpay so much that there’s a penalty?

Actually a lot of people do overpay, even if they are not "those sort of people" on high salaries.

You know why you don't know about them? BECAUSE THEY'RE NOT SMUG ABOUT IT

That chip on your shoulder must be giving you serious backache

I doubt this post is even real tbh…. Lazy journos, that you?

No, you're giving them less overall - as if you pay the mortgage off early, you'll pay less interest.
Maths not your strong point?

I'm going to be smug, we overpaid our mortgage pre kids when both of us were working full-time. We now have no mortgage (in our 40s). It takes the pressure off, particularly when through no fault of his own (bad luck) my husband's health has failed him over the last 12 months.

Yes some people have no disposable income, and can't afford to overpay. For some people it's a case of you pays your money you takes your choice. I have always put reducing mortgage before new kitchens, bathrooms or clothes (happily buy from car boot sales and charity shops).

Also I know plenty of people who have never and will never have an inheritance.

Not just financially!

Well we fucked up then because we took out a repayment mortgage and not an endowment and every five years when the fixed rate we had ran out we would get another five year fixed rate and keep paying the original amount despite the repayment reducing resulting in the mortgage finishing three years early. My PIL died after we’d paid off the mortgage. If only we’d not overpaid we could have used the small inheritance to pay it off. Wait a minute, we’ve no mortgage and a small inheritance too, now that’s smug!

Terrifying levels of financial illiteracy.

Terrifying levels of overall literacy.

I've been mortgage free for 30+ years since I paid my mortgage off. What was i thinking!

[Actually it's been wonderful, One of the best things I've done].

Can we get some clarity of when I'm getting a lump sum of cash? *

*not sure where from or why I am entitled to it

If you overpay though you pay less money overall, nothing smug about it really. Not everyone is mortgaged up to the eyeballs struggling to keep up with payments, some of us live within our means and don't overstretch/take out maximum the banks are willing to offer, so overpayment is a sensible move.