To not want to pay off my mortgage?

[IProbablyAm2024]

My DH and I are very fortunate to potentially have a nest egg of about £50K. MIL has also offered to pay off the remaining £50K if we put it in our mortgage so we are "debt-free".

I am struggling with this for a few reasons:

• mortgage is manageable and not a problem (although has increased)
• our house is old so don't really want to "invest" in it - we might move
• money is then trapped in the mortgage and unavailable
• I think a lump sum/nest egg would be more use for large purchases and rainy day problems
• it reassures me to know this nest egg is available for emergency medical or other expenses
• I feel exposed knowing it's all in the mortgage
• we'll be better off each month but only by the amount of the mortgage payment
• what if we fritter it away each month?
• I feel bad having my MIL pay off my mortgage- a failure as an adult and a parent (backstory alert)

Husband is on board with the plan and is excited to save £30k of mortgage interest over the life of the mortgage. I think you don't save what you might never pay.

Should we do it?

Op I would just take the money and pay the mortgage off..there is no better feeling and the money you pay on your mortgage now you can set a standing payment to another account to save it so you don't waste it.

It didn't feel like anything to me.

But anyway, a better feeling would be investing £100k and making £10k per year on it while only paying £5k mortgage interest, to be honest.

Seeing OP's second post:* *

It always comes with strings. And the strings often put me and my DH at odds. PILs are very selfish, self-centred and "help" us in ways that often don't help at all and make things worse. MIL giving us the money gives her more entitlement to our time and energy.
I can't really be specific as it could be outing but it's bad enough that a bit of me would rather go without. In the past, we have taken the money and the consequences and its never been painless.

This is enough for me to extrapolate that the gift may not be just for generosity's sake and will have some downsides to OP, not least, dictating what OP uses her own money for.

"very selfish, self-centred " people do NOT giveaway £50K

I don’t completely understand but if she’s basically manipulating you about what to do with “your” 50k, by adding money but only with conditions, you’d be justified in saying no. Though I’d be tempted to take the 50k, pay off the mortgage and then remortgage for 30k or something. Technically you’d have kept to the bargain…

Also if you think this is a way to maintain a relationship with her then that’s another totally justified reason for saying no. But equally if you’d be seeing her anyway most likely you might just be cutting your nose off to spite your face…

Only if the person looking for advice went to a commission based advisor or one tied to a particular organisation. This belief is why independent fee based advisors are best - they get paid the same no matter what advice they give so there is no benefit to them recommending one thing over another.

100% op

Selling your soul for 50k... Is it worth it?
Def would be a no from me.

I agree, it makes financial sense as the interest is wasted money. We’ve had advice and have Been told to pay off mortgage.

I think you need your savings accessible, mortgage is only one of your expenses if something were to happen.

I felt confused by you saying "trapped in the mortgage" because if you paid it off there would be no mortgage! But I think you mean "trapped in the property value of the house". Is that right?

What do you mean by that? Would your MIL act as if it was then partly her house? And would expect a say over whether you could ever sell up? Or maybe demand to move in?

My MIL was a bit like that. Lots of money but she used it to gain and maintain control. Easier to go without!

Naive. Controlling people will do anything to control, that doesn't make their motives pure.

If you take the MIL she will brag she paid your mortgage for you, not immediately but at some point it will be used against you. I wouldn't want to that floating over my head..If she wants to put it in an account for her grandkids university fees then fair enough.
If you are moving, it's best to keep some mortgage active and borrow some more, If you pay off the mortgage you will need a brand new loan which isn't a massive issue but you are just re-applying, deeper credit checks and getting older etc

Personally I hate debt and looking to clear the mortgage independently (lots more joy in that) whilst I'm on a low rate 1.19% I put extra money on 5% ISA accounts, then use all that lolly to smash the mortgage and save a bundle on interest. As much as I like Escape to the Country, don't think I'll be moving anytime soon from a 4 bed detached. If anything, could downsize near 60 and live on the equity.

Oh, they do, if they insist you do exactly what they think you should do with the money.

If I understand it, the OP has 50k in savings. MIL wants to give them another 50k, but only if they put the full 100k in savings meaning OP then has no savings in reserve if they need them.

That is the request of a controlling, manipulative shrew, not an unselfish gift and would be entirely reasonable grounds to refuse the money.

It wouldn't surprise me if the MIL, if OP sells the house, went on to insist on getting the money back and a share of any profit made on the sale.

I would take her £50k and do wtf I wanted with it.

Is using the money to move an
option?

It would be madness to leave yourself without a financial buffer.

I'd accept the gift on the understanding that it alone would be paid towards the mortgage.

This.
My savings rate is 4.65% (easy access.)
Mortgage 1 is 2.5% approx
Mortgage 2 is 4.3%
I over pay mortgage 2 a litte each month, but I'd still be better off saving it. It's an emotional thing.

😂I find the number of "awful" "controlling" "selfish" PIL on here threatening to pay off mortgages, offering to look after DGC etc bizarre.

Hi. I'm not going to quote figures here because I'll have to start charging😜.

Firstly, liquidity. The money is tied up in the house, end realising this capital is a long, expensive, and disruptive process. So if you are mortgage free, but zero in reserve and the boiler packs up. You can't sell a bedroom to fund your boiler. You'd have to go into debt to fund the boiler. And that might be difficult, expensive or even impossible depending on the circumstances. Yes, eventually, your surplus income will help build this, but you will be initially quite vulnerable, and it will take some time to get back to the liquid position you had previously.

Secondly, return. If the return on savings/investments exceed the APR on the mortgage, you'll be better off.

Thirdly, savings discipline. This is a bet more woolly, but if your mortgage goes out each month as a non-negotiable, arguably, you'll repay this faster than you'd accumulate savings. Depends on how good you are at saving.

I know people have an instinct to repay debt, and that is good. But its not automatically the right choice, especially if it leaves you with little or no emergency cash.

Can't you just put her £50K into the mortgage and keep your £50K as a nest egg? She doesn't need to know.

I would turn down the gift, I have a similarly manipulative DFIL who has offered money and then strings have emerged, I’ve always turned him down because I would rather have less money than him interfering in my business. Thankfully DH is on board.

It's not a true gift if you then want to control what happens to every penny of someone's savings.

It's a massive control grab. Especially from someone who has already caused problems in the past.

I wouldn't accept her money in your shoes.

Haven't read the whole thread but, after our mortgage was paid (end of term), my DH opened an account so all the money we'd have paid for the mortgage went into that!

That’s what I understood from your first message. Glad I understood correctly.

You need to weigh up the strings together. MiL will probably be a controlling pain anyway. You can easily sell a mortgage-free house or remortgage should you need to. A lot of mortgage rates are going up at present, making people feel poorer. Being mortgage free will give you more disposable income that you can spend / save / invest as you see fit. It’s certainly not an offer to be disregarded without careful consideration.

Very generous of your MIL to offer to gift you 50k towards your mortgage but if it comes with conditions then it's not really a gift, is it? It's control. So no thank you.

edited to say sorry for quoting the whole OP, didn't mean to!