AIBU in thinking no point in being mortgage free

[Tunaormayo74]

My husband and I want to be mortgage free and could pay it off when we are in our 50s and 60s respectively. However, I don’t see the point. All it means is that we will have less disposable income now but no better off when we retire. The only way it makes sense is to downsize when the mortgage is paid and use the equity to afford holidays, etc but why not enjoy the holidays now rather than when we are older? If we stayed in the property we are working hard to pay off the mortgage for, all that will happen when we died is the government will take a huge chunk of the equity in inheritance tax.

Am I being unreasonable to think there is no point in paying off your mortgage early if it means you’ll be in your late 50s or over?

From what I've seen, balance is a good approach. I've seen too many people not live to enjoy the fruits of their labour in retirement, or not have the health left to enjoy it the way they could have when they were younger. OTOH, there's a place for good planning and I think being mortgage free is great for retirement. No rent or mortgage must free up a lot of income. We are working towards paying off our mortgage but not at the expense of also living in the now.

Paying it off early can save you a huge amount in interest. But you’re right that its not the only consideration.

We planned to pay off our mortgage and clear debts when DH retired which would mean we’d have had money to spare due to his pension but by that time we wouldn’t really need the money as DC would be adults.

DH parents died and we were able to pay the mortgage off. It’s stopped us struggling so much but we still need to work to pay debts. It does mean we can help DC when they become adults. It’s taken the pressure off massively

I am aiming to pay off early to save some of the cost of the interest. Also I like the idea of having a huge monthly expense out the way towards the period of time when health issues might become more likely and work options will become harder. I like the security of knowing my mortgage will be finished sooner, though I know many are saying savings is better at the moment that paying off mortgage.

My BIL just got a MND diagnosis in his late 50s. He has declined so much in just one year. He can’t work and it is clear that they will need to move and need specialist car/equipment. They feel lucky they have the mortgage paid off so it one monthly expense they don’t have to find and it’s also a big asset they can sell if required.

Paying it off in your 50s and 60s isn't early, it's the normal time to be mortgage free. Most people would prefer to enter retirement mortgage free because your income will drop (maybe by a lot). Also, you have the option of retiring early or going part time if you have ill health or exhaustion (pretty common by your late 50s) or because your job is not compatible with continuing into later life (nursing/police/teaching/building trades/anything manual).

But, it's always good to have a balance and I wouldn't kill myself and have zero free money/treats/holidays I could balance things out.

@DanglingMod i don’t think it will be the norm in the future to have your mortgage paid off by then. It will be interesting to see if this comes out as true. More people are extending mortgages to decrease the payment terms. The cost of houses have pushed a trend in this direction.

Our mortgage was 35 years and slowly chipping away to try and over pay to be mortgage free late 50s / early 60s.

I think it's definitely worth striking a balance between living now and saving for the future

None of us are guaranteed a tomorrow, let alone an old age.

@Tunaormayo74 we are doing a bit of both. There’s no point not enjoying our younger years but it’s good to plan for the future. Even over paying by 50-100 a month if possible is good. We still try to have fun and save up for holidays etc. I think balance is key

Personally I'd probably try and save a bit each month rather than overpay on the mortgage, unless you could afford to retire early in which case not paying a mortgage will help towards that.

We managed to clear ours by 50. Agree doing so isn't the perfect strategy, however.
It gave us enormous peace of mind. Its an asset that has continued to increase (value has gone up by 50% in the 5 years since we paid off the mgage). At 55 we weathered our way through Covid, and are sticking the mgage monet into pension funds.
We know people who have has sudden illnesses certainly 55 plus that has just removed their ability to work. And government help will not rescue you if you have a mortgage. We at least know that the house is paid for. Our other bills we have savings for and could live for 2 years. We could then decide whether to sell/ downsize.
For us it had given us options. Not worried about inheritance tax as you have 2 lots of it as a couple.

Pay it off while you can.
When I hit 50ish I was suddenly deluged with caring responsibilities and my own health issues which severely limited my ability to work.

I always wanted to be mortgage free but I can't see that happening anytime soon anymore. But I'm going to overpay as much as I can just in case things happen and because the payments are so high.

But I need to balance things now I'm older. A house kept long term is always an asset.

For us, overpaying on our mortgage meant we saved 3 years of interest. It was a great relief to get rid of that bill but our primary motivation was we had two kids who wanted to go to Uni. That became our mortgage. It’s really expensive to see students through Uni so if you still have a mortgage, you might find it hard?

Depends on when you're planning on working til. Our mortgage is 1k a month and will be paid off in 7 years, all being well. I can't bloody wait.

It means we get an easier job with much less stress and telling current employers to go fuck themselves (I've technically just done this as am leaving for pastures new but I've put up with a lot of stress I didn't have to because the mortgage needs to be paid)

Or go part time or quit all together and enjoy life more with travelling and fun and just enjoyment we haven't had.

If that can happen one year earlier then great!

Also means you could save than additional while working to further enjoy retirement.

I think it brings freedom! All for it.

i Think there is always an advantage- if you want to retire early - or if you don’t!

We put all of our 'spare' money into our mortgage and are lucky to have bought at a time when house prices were much more affordable.

The amount of interest we have saved is huge, we would have saved at least 100k in interest, I don't know the exact number off the top of my head but it really is a huge figure with regards to what we can do with the money that would have gone straight to the bank once the mortgage is fully paid out.

I guess it does make a difference what age you can get your mortgage paid out. We will be early 40's hopefully.

We’ve had to pay for 2 kids at the same time through Uni (accommodation costs). Couldn’t have done that if we still had a mortgage. We didn’t scrimp on holidays or doing fun things when the kids were growing up but I didn’t buy designer hand bags like my friends or spend lots of money on Botox ect (though I am thinking of that now).

For me it was just the fact that the house couldn't be repossessed if either of us fell ill, could no longer work etc. We didn't have to worry about where we would live in the event that a tragedy happened. But I used to be a homeless officer and, for me, having a roof over my head was the be all and end all. I've seen too much misery caused by losing a home.

We paid off our mortgage when DH retired (I was still working) using his retirement lump sum. Perhaps it would have made financial sense to keep on with it but we have never regretted it - it is such a huge comfort knowing we own the house 100% and when/if we downsize we can buy outright. I honestly sigh with relief every week

Also, we have a redraw facility on our mortgage so even though there's a lot extra paid we can access the lot if we wanted. Anyone who can afford extra should do the same. It saves you interest while still being your money to access.

we became mortgage free in our mid 30s. We saved £80k in interest, and it allowed my partner to retrain (taking a massive hit in pay for the first few years). It has also meant that the recent COL crisis hasn’t hit us so hard, and we are putting all the money we’re paying on mortgage in to ISAs etc. We will probably be moving again soon due to bad neighbours, but it has given us the ability to be able to afford a much bigger detached house with a LTV of about 25-35%, which we will be able to pay off in about 5-7 years.

nothing but positives for us in paying it off early

All it means is that we will have less disposable income now but no better off when we retire.

I don’t see how this is true. If you don’t have to pay a mortgage when you retire then you will be better off as your outgoings will be less.
Weird that you think paying your mortgage off in your 60s is “early”.

@Gtsr443 has hit the nail on the head.

So many things kicked off for me and my peers in our fifties. I almost died and spent some time having treatment, another friend became seriously ill and has never really recovered. So many of us had parents become ill or die it was unreal. I had three friends who all had a parents get dementia in the same year. One spent every weekend for two years up and down the M1. Both my parents died when I was in my early fifties and DH Dad died around the same times. A couple of my friends had really awful menopause’s , one had to have a gynae op and another is about to have an hysterectomy.

I know you say holidays but not how many a year or what type. Do you mean take one two week holiday a year instead of three. Is it Skegness or The Seychelles?

We've overpaid and are now mortgage free 8 years early, that's 8 years of holidays with the monthly money we would have paid in repayments if we want to.