To be anxious about overpaying the mortgage?

[Toopolitetoask]

I know this is a disagreement me and DH are lucky to have. We bought a house 8 years ago, in a relatively affordable part of the country. We were late thirties when we bought it. Our mortgage is less than what we would be paying if we were renting (there's only the two of us so only needed a 2 bed).

We didn't overpay on the mortgage initially as the house needed quite a lot of work on it which we've now finished and managed to do without taking out loans. I'm keen to start overpaying the mortgage, DH feels we're better off enjoying ourselves (eg long haul holidays). He thinks we can't avoid having a mortgage for most our working life because of buying relatively late, so doesn't see there's much point trying to shorten it.

I'm anxious about having mortgage debt hanging over us for so long. DHs view is we should enjoy our disposable income while we're still relatively young (we do still both put some money into savings and that won't change)

Any thoughts? Fwiw I'm from a low income background and was brought up to be careful with money, eg not using credit. Whereas DH is from a more comfortable background and doesn't worry about money so much, though we both live well within our means.

I wouldn't overpay my mortgage if it meant compromising on the lifestyle that I enjoy. I would rather have a holiday every year than knock a couple of years off my mortgage down the line.

I do overpay my mortgage, but I only started that once my earnings made me comfortable enough to do so without any compromises.

We are set to pay off our mortgage before we retire without overpaying so currently we don’t; I’d rather enjoy life as I’m very aware that being here in 15 yesds to enjoy a paid off mortgage isn’t guaranteed

I'd overpay a bit. I've cleared mine before 50. But I'm a lone parent so I wanted it done. Never have holidays or nice things.

I would overpay it. You never know if/when redundancy, illness, or disability might affect you and you'd be most glad you overpaid if that happens. Also means paying less interest.

https://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator/

I'd throw numbers in here - see how much you'd save in interest.

However there's a balance to reducing debts like mortgages and managing to live well and where that balance is varies for people.

Can’t you balance it out so you do a bit of both?

Strike a balance - work out your total disposable income after rainy day savings (eg boiler breaks, unexpected car bill) which you could spend on holidays or over paying, one year spend 2/3 on holidays 1/3. On overpaying, then next year switch. Having a great holiday and not overpaying one year is absolutely fine too, but spending a lot on a holiday doesn't mean you're necessarily going to have a better time anyway, one of my favourite trips in recent years was to a mobile home in Scotland costing £520 for the week!

We are currently overpaying but just the diff on interest if we where at 6% that why when we come to end of current mortgage term it's not a scramble to find more money.

But think of the interest you'll not have to repay?

I'm not sure some people realise it's cheaper to overpay and you end up paying back less overall.

It's a no brainer to me. We overpaid by 100 to 150 a month, apart from the last 18 months where we chucked everything at it and payed it all in 15 years rather than 25. We also saved thousands in interest.

Still had holidays too.

I've been to too many funerals of people who weren't of pensionable age yet so I'm disinclined to compromise too much on living life in the present.
I'd mess around with overpayment calculators as PP suggested and see if theres a goal end date you and DH can agree on which you can afford without too much of dent in your lifestyle. When he sees how much interest could be saved in black and white, maybe he will become more motivated.
Without knowing numbers, it could be as simple as downshifting your food shop from the big brands to the supermarkets own and things like that to free up an extra £50pcm to chuck at the mortgage.
Or, once your savings hit a certain agreed amount, chuck every after that to the mortgage.
Keep enjoying your life though, we are only here once.

So much to consider as I am sort of ina similar place shall I overpay ir not bothers. I'll pay off my mortgage at 53 yrs old and I have a super low rate as it was fixed so 1.69%. Zero incentive to pay it off quicker however I've wat he'd my father's health decline in retirement my mum is now his carer and all their plans of holidays stopped.

So I've decided to balance things out and enjoy holidays etc and when my fixed term ends I'll cut bsck on enjoying a bit and use some money ti start to overpay as I know my interest rate will be higher.

The biggest unknown factor is your and ur OH health. It can change just like that. I either balance it or tske a year off to enjoy your life after that hard slog of renos etc.

Thanks all. I think you're right about striking a balance, and I like the idea of possibly alternating too, so a year where we try and be a bit more sensible and overpay more and a year where we spend money being a bit more adventurous.

I think I need to work out what we could pay every month that would be a manageable amount and not feel like too much of a sacrifice.

Can you do a bit of both? You get keener on slightly earlier retirement as you get older and you are not guaranteed great health until that point so I wouldn't be going on holidays to the point that I wasn't also saving and overpaying.

It's a long term purchase, not a race to pay it off. Spend a bit, save a bit, invest a bit

And I think it's the enjoy it now or enjoy it later that I find hard to decide on - on the one hand I had parents who died as they barely reached retirement so I don't want to wait, on the other hand I love the idea of having the flexibility to go part time in the future which I could only do if the mortgage was lower!

Can you do both? Even small amounts chip away at it.

Have you both got decent pensions? That's the priority above over paying the mortgage.

We overpaid our mortgage but did holidays too. I guess it depends on how much spare money you have. I don't subscribe to the view that you should only live for today as even though some people die before pensionable age most people don't. We aimed for early retirement and paying off your mortgage helps with that. We like holidays too but budgeted for those as well.

What we did when we bought a house is pay the same on the mortgage as we did on rent previously (the mortgage was cheaper). And then every time we got a pay rise or some money from somewhere we'd split it so half the raise would stay in your bank so you got the benefit, and then the other half we'd put a bit in the general spends/fun money and a bit on the overpayment

The MSE calculator really shows the value of even a small amount if you can pay it regularly

We knocked off 8 years and tens of thousands in interest. Really worth doing. But you have to have a life, have fun as well. So strike a balance. If you can put a figure on the overpayment you won't notice particularly and then up it now and then when you have extra.

@BrioNotBiro both reasonable pensions. DH earns more but his pension is less generous, he's private sector mine is public sector (not as good as it used to be, but still lucky to have it)

If you can afford it without it compromising other areas of your life its a good idea.

I think its about balance. Noone is guaranteed an old age, but equally as you say having the flexibility to go part time later would be nice.

You could start by overpaying just small amounts and see how it goes and increase as salaries rise etc ?

What we did when we bought a house is pay the same on the mortgage as we did on rent previously (the mortgage was cheaper).

We've done similar with repayment mortgage - kept amount the same even when amount we had to pay goes down. Plus end of year one of the saving accounts pays of Christmas and what's left goes on mortgage - making sure we hit no limits for overpayment.

I've been told with low interest rate we have it's mad to overpay - but we've looked and depending where interest rates end up in 18 months time the amount we pay will cover or only need to go slightly up with higher rates so it won't be a huge jump. It's also made a huge difference in amount left to pay.

It's definitely a balance, life is short and it's so important to enjoy whilst also having some security...I have an amount in savings that I'm happy with, that could see me through 6 months or so.

I also have several holidays a year, nothing super expensive but a couple of grand for 3 of us

I also overpay the mortgage by £100, not a huge amount but as the house will be sold in 8 years it's really just another way of saving

That's a good point about keeping the payments higher and then not being too shocked if rates go up! Fortunately our current fix is until 2027 so we've been protected from the big increases some people have had to deal with.
Neither of us are likely to go much higher salary wise unfortunately, and I'm sure many are in the same boat where annual pay rises aren't keeping up with cost of living increases.

Part of my worry is we've left it this late to overpay anything, I've heard lots of people say that you need to overpay in the first few years to make much difference - but then we can't start any earlier than now, and we could be looking back in five years and regretting doing nothing.

I think between us we could manage £150-200 a month and still save enough for emergencies and holidays, at least on our current mortgage.