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?

We remortgaged a few years ago to get a bigger place and with property prices as they are and people getting in the property ladder late and upgrading their properties later iin life also, means paying off in your 50s will feel early for some like me.

We made the decision to be super frugal to pay ours off.

I was about 37 at the time we cleared it and we didn’t have DC. We had one old car and kept bills very low and one cheap holiday. Five years later and we moved to another house but didn’t take out a mortgage.

The sacrifices were worth it for us. It has been very liberating and it makes things so much easier. I know that you can probably make more in interest nowadays that you pay on an old mortgage but that wasn’t the case for us. I don’t know if I would do it differently now.

It could have backfired and one of us could have gotten sick or anything, but we tried to have fun being frugal and it became a shared goal that we both worked hard on.

For me it’s not financial. It’s the security I want that we will always have a home: I know there is a debate on overpaying vs investing/saving. But after seeing family members try and rent in later life or lose their homes. The security wins.

We got our mortgage in our late thirties so we’re on catch up anyway. It’s a smaller mortgage and we overpay but we want it gone so we can go part time or even retire a little earlier as we hit our 60s. 67 is a long wait!

lLife isn’t guaranteed so we don’t put our eggs in one basket, so even though we over pay, we pay work pensions ( public sector so good), we both save too. But we also live now and enjoy our time together.

Also worth remembering that if one of you gets ill but not I’ll enough to qualify for continuing health care the house will be considered an asset and will be used to finance your care leaving you with £23,250. Heartbreaking if you really scrimp in the hope your family will inherit your home or savings.

We paid our mortgage off when I was early 40’s, dh 50’s.

It enabled us to save lots, dh has since retired and we can comfortably afford the exorbitant cost of 2 dses at university.

Once our dses are done with university, I will be looking to either give up my career for a low stress job or stay in the same carer but part time at a much lower level. I’m counting down the years😬

So definitely worth it for us!

I have a pretty low interest rate of 2.3% at the moment but even at that, paying an extra 200 a month will save me 19k over the course of the mortgage and get it paid off 10 years early.

I wouldn't be stretching myself to be every spare penny in at the expense of enjoying holidays and other nice things now but if you can afford to overpay a bit then it's a good idea.

We paid ours off when I was 40.
We overpaid each month and used redundancy to pay off a chunk.
It allowed me to take time out of work while my children were small, I'm back working now 4 days pw and have a great work/life balance.

It's very liberating knowing you own your own home.

Being mortgage free is amazing. You have so much more money and the knowledge that yoir houses is all yours so if for some reason you did need money, all of it is yours to keep. Not to mention the obvious thing about wasting money on paying interest on a mortgage.

It is true that it means less worry in retirement years (who knows how long that will be for) but I’m still being unreasonable to think that paying off early and saving on interest only benefits the government who will take it away through inheritance tax. We have only one child and the equity will outstrip the threshold.

I guess the biggest benefit from what many of you have said is the peace of mind in old age when income is limited.

This. We paid ours off 3 years ago. Feels wonderful.

When I met my now dh he already had a house ( mortgage ) and a reasonably well paid job. We married , he changed the house to 50/50 ownership and my salary paid for food , day to day living and his to ramp up paying extra off the mortgage. We paid it off in 5/6 years and around our mid 40s.
We moved to an nicer more rural area with a better standard of living but housing cheaper and purchased this house outright.
It worked for us.

From my own personal experiences being mortgage free is the best thing ever! There are a number of times since that I would have been in serious trouble paying mortgage/rent. I lost my job during the Covid lockdowns and couldn’t get another for ages, new job at much lower pay and various other ‘curve balls’ that would have seriously threatened having a roof over our heads (single parent). Every day I appreciate not having a mortgage or rent to worry about.

You’re acting like when you’re in your 50s and 60s you’ll be too old to go on holiday and enjoy yourselves.

I paid mine off around early 40s.

But before I did that I had saved the money in a better account than the mortgage rate. In my mind it was "paid off" but then I decided to just clear the last 30k for peace of mind.

It does mean I have freedom. I could go part time, and did -doing a masters for interest.

So I don't feel trapped by work. It's a lovely feeling.

That too. Hadn’t thought 💭 f that. Makes it even more pointless.😥

Another thing is when you don't have a mortgage, suddenly you don't need much money as your expenses are so much less. It's mentally freeing as you no longer "have to work", so either you can take it easy, or continue to work as you were, thereby accumulating savings. I really don't see why anyone would actively choose not to pay off their mortgage as quick as they can

I could have but didn’t pay my mortgage off early because in my particular situation it didn’t make financial sense to. The money I would have used was making more money elsewhere than the mortgage was costing me.

I let the mortgage run full term.

There are well trodden pros and cons to paying off a mortgage early but I'm not sure I followed your logic here.

If you live more frugally now in order to pay your mortgage off early, you will then have more disposable income once the mortgage is paid off, because you are no longer servicing the mortgage.

Whether or not you are more live-for-the-now or prepare-for-the-future is a very personal choice, there is no right or wrong. But the way you've described it sounds like you've actually missed the bit about having more disposable income later.

This is exactly our scenario. I am so glad that we are mortgage free as my husband’s career came to an end two years ago. He is mid sixties. I am in my late fifties and have been suffering from burnout/exhaustion so have decided to go part time. We would not have been able to do this with a mortgage.

If you are leaving your home to your child, the combined IHT limit could be £1million. If you have that kind of equity in your house you’d be better off getting proper financial advice rather than asking mumsnet.

I was mortgage free at 56. ( 8 years ago) It is a massive burden lifted.
I'm planning to downsize over the next 18 months ( currently 2 of us in a 2 bed) to a 2 bed, which should give me £200,000 of disposable income.

Seem to be against the grain here I don’t think it’s that important to pay it off, yes of course overpay if you can afford to but don’t sacrifice joy on the way. My parents were such savers and were planning huge adventures when they retired. Mum got dementia for 10 long years and died, then months later dad got diagnosed with stage 4 lung cancer and died. They were working class and worked so hard to pay off house and have a large amount of cash but always put off doing what they wanted in order to save. So we have an amazing inheritance but wish we didn’t and they had spent every bloody penny.

I've owned outright since I was 30, due to an inheritance, I'm a single parent so the thought of being ill or in an accident and not being able to afford a mortgage and losing the roof over our head was scary so instead of using the inheritance as a down-payment on a larger house I bought a small property.

What it has given me is a huge amount of security, during the pandemic and CoL crisis I've not had to worry as I don't have any housing costs (apart from maintainence ofcourse). Would I like a bigger house of course but not as much as I like being financially secure.

• we wish they had spent every bloody penny.