Don’t know how I’ll pay our mortgage off

[Dooon]

£358k - we are mid 40s 25 years and 3 months left. Not much left over each month. Will pay off £500 today and look forward to knocking of 20 days or so to the life of the mortgage.

Could you downsize?

Any overpayment helps knock off the total interest. We both do this as and when we can. Either that or as pp suggested, downsize?

If it has 25 years left to run, presumably it will be paid off around state pension age, so you will be able to pay it off then?

We’re a couple of years younger, similar amount outstanding and same mortgage length. We live in a 64 sq m 2 bed terrace, so no, we can’t downsize.
We’ll just keep chopping away at it each month and accept we won’t have it paid off until we retire. Which is fine I guess.

Small over payments will help. Even if it’s only 50 or 100 a month. When you remortgage consider whether you could reduce the term. We both had pay rises and so reduced the outstanding 20 years to 15. Currently overpaying a lot… current fix ends in 2 years, but with overpayments hope that we will have paid it off and don’t need to remortgage again.

Surely you'll pay it off by the end of the 25 years? I'm confused. Or are you on an interest only mortgage?

I don’t understand. You’ll have paid it off at the end of the term. You know exactly how you’ll pay oy off surely - just keep paying each month. Overpaying makes it quicker, and if you get pay rises you can do that regularly, plus if the interest rates drop a bit that helps to overpay.

The normal monthly payment pays if off. You might be able to overpay in future but it's not compulsory.

When you're looking to retire, your disposable income could be higher due to combination of state pension, work pension and lower outgoings.

I don't see the issue.MN is weird about overpaying mortgages even when it doesn't make financial sense to do so.

Surely when you remortgage you can opt for a shorter term and pay more or a similar amount to now?

Mortgages can feel massive but you are paying for something that you need I.e a roof over your head. Everyone has to pay something to do so but you are also paying to have an investment in future years through downsizing, care or passing on inheritance.

The alternative is to rent where you will almost certainly pay more than your mortgage, the property will never be yours to do what you want with it and your money is disappearing into someone else's back pocket . Look at it from a positive perspective, you're on the housing ladder which many will never achieve and you're investing in a property which will increase in value and will allow you to live rent free for the rest of your life. Give your head a wobble, you're in a much better place than many.

It’s good to overpay if you think that without the mortgage you could have the choice to retire early. Unless you are getting higher interest 9n any savings than you are paying on t(e mortgage it tends to make financial sense to put (genuinely) spare savings into overpayment. Not so much that you ruin your quality of life though - doesn’t make sense to sacrifice holidays etc.

As PP have said, the mortgage is arranged to if it’s a 25 year mortgage, at the end you will owe 0 (as long as it’s not an interest only mortgage). If you are mid 40s, that means you will have paid it off by the time you are 70. BUT (a) any overpayments will really help as it reduces the interest bill; and (b) your salaries will go up over the next 25 years to roughly keep pace with inflation, but the mortgage payments stay the same. £500 will be worth a lot less in 25 years than it is now.

Also interest rates are going down so if you are on a fixed rate for a couple of years odds are that you’ll be able to remortgage at a lower rate when that’s up.

I'm 59 with 19 years left on mine. I'll just keep paying I guess. Our plan when we took it out was to massively overpay every month and halve the term but of course interest rates went up so we can only afford a small overpayment now.

We have investment income that we can use to pay when we retire.

But I think everyone is in the same boat really- anything could happen to stop an income and thus the ability to pay a mortgage.

What is your worry OP, that you overstretched yourselves and really feeling it or that you'll have to work longer than hoped to pay it off.

Is there much equity in the house or is the value not much more than the mortgage.

Either way you can build a solid plan to ease your concerns. The amount isn't going to drop overnight but having a sructure that you are comfortable with will help you worry less

Isn't this the situation for most people with a mortgage?

We all just keep paying the monthly payment and any overpayments as and when we can. Surely the plan is the same as it always was - keep working up to and beyond the mortgage term to make the monthly payments from earned income and hope to have a lottery win or inheritance along the way!

Or is it interest only with no plan to pay off the capital?

Personally I plan to wait to DC to fly the best and then move to a much smaller/cheaper property to allow us to retire sooner if required

I'm 48 and we paid off the mortgage in 2019- I wouldn't want to be saddled with a mortgage into my older years either to be honest. It is a relief not to have to worry about it especially as DH and I both have health issues.

If you’re finding it tight to pay the monthly amount, instead of making overpayments now put any available cash in a savings account. Houses need you to have some cash available for upkeep, particularly roofs and boilers!

then there are cars … money overpaid on the mortgage isn’t easy to get hold of.

??

A 25 year mortgage when you’re mid 40s sounds long! When did you buy OP?

We overpaid everytime we could and paid our mortgage off 4 years early. It's worth doing OP.

Yeah, this is what didn't make sense about the OP to me.

With a normal (repayment) mortgage, paying the required amount every month will pay it off. Overpaying is of course good, but it's optional.

If it's an interest-only mortgage, then of course that's different - but surely someone wouldn't go out their way to get a (somewhat more specialist) interest-only mortgage without putting serious thought into how to repay? In fact I thought lenders required you to explain to them what your plan was?

Remember your mortgage repayment stays the same other than interest rate changes. So what seems like a large chunk of your monthly income today won’t be so bad in a few years’ time taking into account inflation.

Exactly this. Sure, it would be nice not to be paying a mortgage for the rest of your working life. But ultimately it will be paid.

If you work until the end of the mortgage term so around 65, you should pay it off by then?

We have 24 years left and will be 69 & 73 by then. We’re just plodding along with it, no extra payments as we don’t have enough going spare. At some point we hope to get a better deal when remortgaging or be able to over pay.

seems pretty normal to me as most of our friends are mortgaged until retirement or beyond.