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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

To pay off mortgage or not

82 replies

YogaMama66 · 07/04/2023 08:35

So I’d like to pay off our (pretty small) mortgage. Purely for the joy of being mortgage free. My DH says as it’s so small, (£350 pm), it’s a bad use of money and that I’m talking about using 12k each for a ‘feeling’. WWYD? I say you can’t put a price on a feeling of freedom! We’re both late 50s for context. Not high earners, but can afford a nice life. This just would mean so much to me!!

OP posts:
Iwrotethelyricstoaxlf · 07/04/2023 08:36

What interest are you paying vs putting it in a savings account for a fixed period of time.

MsE has a savings vs mortgage calculator.

start there.

thegrain · 07/04/2023 08:37

Iwrotethelyricstoaxlf · 07/04/2023 08:36

What interest are you paying vs putting it in a savings account for a fixed period of time.

MsE has a savings vs mortgage calculator.

start there.

Yes this is a good place to start.

HaveANiceFuckingDay · 07/04/2023 08:37

Do it . I'd love to be mortgage free ( we owe 149k) 😥

MuffinToSeeHere · 07/04/2023 08:38

To be honest I agree with him. Right now everything is going up and whilst it would be lovely to pay off the mortgage it would be much more sensible to have the £24000 In savings and for emergencies. If you used the money to pay off the mortgage would there be any left over?

nannynick · 07/04/2023 08:39

Paid mine off in 2014 and it is a great feeling. Even better when you get made redundant or a pandemic comes along and you do not have debt to pay.

If looking purely at maths, you can invest the money and get a higher return, long term, than mortgage interest rate, as long as mortgage rates do rise a lot.

This isn't about maths though. It is about heart - it is about feelings. It is about not owing money. It is about having financial peace - as Dave Ramsey calls it.

Disco2023 · 07/04/2023 08:40

Yeah I would I want to be mortgage free at your age and we bought late so overpaying to do so. My normal mortgage is £350 too.

Yea I’m aware more money can be made saving etc but after watching a family member struggle with rent and then wait an age for older supported council accom, it’s really important to me to have that security.

That ‘feeling’ is worth it to me.

DeedlessIndeed · 07/04/2023 08:41

Would you still have a 6 month cost of living cushion after you pay it back, in case you lost your income?

I think I'm with your husband (unless your mortgage interest rate is high).

PinkDaffodil2 · 07/04/2023 08:42

What interest are you paying? If over 4% I’d probably pay it back, but much below that you could make more money keeping it in a savings account.

CheersForThatEh · 07/04/2023 08:44

I'm with you in principal but you cant tell him how to spend his money.

I agree that its not worth paying interest on the mortgage debt when you can clear it and start saving that money.

Maybe compromise and clear 50% (so you pay, say £150 per month) and put the leftover mortgage money (£200) into savings. That way you get used to saving and building up the buffer and have the option to borrow against the mortgage if you need to?

CurlyhairedAssassin · 07/04/2023 08:45

the way I see it, you’ve got a chunk of money going out your salary each month at the moment towards that mortgage. You have to think of inflation when it comes to thinking ablut interest savings rates. Most don’t beat inflation. So why would you sit on that money and have inflation eroding it, all the while having 350 quid less per month spare to spend NOW when the cost of livid is high. Plus you’d have the interest building on your mortgage. The fact that Interest rates could increase more for your mortgage payments. Lastly anything could happen. One of you could get ill/lose your job. If your mortgage was paid off at least you have a roof over your head which YOU own, not the building society.

it’s just not as simple as comparing interest rates, I don’t think.

ZirihePevzig · 07/04/2023 08:47

If you have a large enough rainy-day savings account that you don't usually touch, consider getting an offset mortgage. If your savings and mortgage balance out then you don't pay any interest at all so you are effectively mortgage-free but you can still access the savings if that rainy day comes.

BernadetteRostankowskiWolowitz · 07/04/2023 08:47

If you spend the 24k now, it would take you nearly 6 years to recoup that if you funnelled the 350pcm into the same savings. Not worth it imo.

If your repayments were closer to 1k, I'd say go for it!!

Just up your overpayment each month to the max you can afford/are allowed so it goes down much quicker and keep the 24k for emergencies/fun. Have an amazing holiday!!

CheersForThatEh · 07/04/2023 08:47

And i know mumsnet will shit on me for saying it but if you have over a certain amount in savings then you become ineligible for certain benefits so if you both lost your jobs or something you may be over the mark for state help. Which might not matter to you if you have enough to make monthly payments.

Tinkerbyebye · 07/04/2023 08:50

I paid mine off early. It gives my a great sense of security knowing I won’t have to sort another interest rate out, and as prices rise I know my house is safe. I would do it and put the £350 into a savings account

isthewashingdryyet · 07/04/2023 08:50

Why don’t you over pay ?
Increase your payment to £500 or £600 a month and you will soon be mortgage free.

mynewusername2023 · 07/04/2023 08:55

We paid ours off in 2020 but we only had £14k left. But being able to know we're mortgage free is so lovely.

Dortmunder · 07/04/2023 08:57

My head agrees with him and my heart with you.

We went with our heart in the end and paid it off, the relief was immense. We used what would've been the mortgage payment to build savings back up.

slug · 07/04/2023 08:59

Do it. Paying off our mortgage was the single most liberating thing we ever did. We've both, despite being in reasonably paid middle class jobs, been made redundant or felt the need to leave a job with nothing to go to. Having no mortgage made this lower stress.

shakeitoffsis · 07/04/2023 09:02

I'd absolutely pay it off.

MuffinToSeeHere · 07/04/2023 09:03

Dortmunder · 07/04/2023 08:57

My head agrees with him and my heart with you.

We went with our heart in the end and paid it off, the relief was immense. We used what would've been the mortgage payment to build savings back up.

In the Ops situation though the cost of the mortgage per month is so low it would take years to recoup the money into savings and realistically if something happened such as losing their jobs etc having the £20k in savings would be more useful in bridging the gap than paying it off and being left with a few hundred spare each month.

LakieLady · 07/04/2023 09:04

The satisfaction my late DP and I got from paying off our mortgage was wonderful. For the first time in my adult life I didn't owe a penny to anyone.

And even with a small mortgage, you'd still be able to build up a nest egg if you put the money you wouldn't be spending on the mortgage into savings.

2chocolateoranges · 07/04/2023 09:05

We have £9000 left to pay on ours and it’s getting paid off next month as we have received an inheritance. Our payment is only £260 a month but will be good to be able to not pay that and add more to our savings.

I would say as long as you still have savings in your bank at least enough to cover you for the year then go for it.

CleaningOutMyCloset · 07/04/2023 09:09

I can't wait to be mortgage free, I'm sure you dh is being sensible and I can see his pov, but I'd pay it off just so I knew it would be mine and no one could take it off me.

So im in the 'pay it off for a feeling' camp Grin

purpledalmation · 07/04/2023 09:10

Maybe compromise and overpay so it's paid off quicker? Work out the interest and see if it's cost effective.

alphasox · 07/04/2023 09:19

We are having the same debate. We’ve been saving really hard for years and now had a little inheritance to top the savings up and would mean we can pay off our mortgage which is £900 monthly. At the moment we don’t get anything like £900 per month in interest on our savings so it makes sense to clear the mortgage I think. The thought of having nearly a grand extra in our pockets each month feels like a lottery win to me!

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