Is paying off as much of your mortgage as possible best here?

[Chahat]

I am due to renew my mortgage at the end of the year. I am overpaying 600 a month. I have saved 150k to put towards it when it comes to renew. This will leave a balance of 120k, so will
vastly reduce the repayments and could probably clear it quickly after that. The overall market value of the house is estimated 550k.

I am a single parent and have nobody to talk about this with. I feel so much weight with these decisions and simply dont know if it’s best. Sometimes I read paying off mortgage early is silly as it’s low interest. I am late 30s and feel like I am approaching middle age totally alone in every sense. What is best? I looked at a financial advisor but they are so expensive.

We paid ours off. We now save the mortgage payments. We also haven’t told any of our friends so we don’t get the constant pressure from them to go on holidays we don’t want to go on etc or treated like a sudden cash cow.

Those “payments” soon add up.

OFF THE TOP OF THE HEAD...

There is a number of advisor types on youtube you could consider.
Personally, I’d consider a combination accessibility, monthly disposable cash, tax relief and interest rates with mechanisms of investments, savings, mortgage and pension contributions.

In terms of accessibility, reducing a mortgage will probably mean you lose access to the money until you sell your house, though I suspect that this might not always be so black and white with some mortgage types. Paying off a fixed rate mortgage fully usually comes with fees, though reducing a mortgage usually doesn’t. Putting additional money to pension will lose access to it until you are late 50s though that age is only likely to go up rather than down. Investments (shares, bonds, funds, etc) and savings are usually much easier to access.
Interest rates are higher for borrowing than saving, so paying off a loan is generally better than holding both a loan and savings. That would suggest that paying off a mortgage is a good idea. It would also increase your monthly disposable income in a way none of the other ideas would.

Presuming you are a wage earner the maximum return you would get would be putting more into pension as you will get tax relief. You are limited to how much you (including employer contribution) can put into pension, which is either 60k per year or your gross wage, if lower. There are fiddly rules too on how you can make this more with carry back allowances.

Perhaps a balance of a little of all of these might be best.

BUT DO MORE RESEARCH!

If you are easily saving as well as overpaying id definitely pay the lump off. Then continue overpaying until you get it cleared. Good luck x

Depends. How likely is it that your job will be eaten up by AI? As a single parent, I'd hold more in my emergency fund (around 12 months if I could). I just don't see capacity for REAL growth in the economy as it is at the moment. Many people are investing in the same things and it's inflating the value of companies without their output being very much increased. That can't go on forever. I think paying off a mortgage is a noble goal and likely to give you comparable, if not higher, return to investing in the stock market (as it is at the moment).

Looks like you could maybe pay the whole mortgage off in 4 years if you continued with £600/month overpayment and also added in the savings from holding a reduced mortgage. Could save you £40000 in interest paid over the life of a mortgage (not including money saved already from previous overpayments). That's enough to cover 4 years of university tuition and leave you mortgage free in your early 40s. At a guess (very much a guess), you might have around £2500 free per month to look after your future/pay university fees/put into pension to retire early? That would be an incredible position to be in.

we have invested our windfalls as our investments yield min 8% plus tax efficiencies and our mortgage interest is fixed below 2% (soon to go up but still not worth cashing in investments).

It's about deciding where to put the money you have. Paying off your mortgage will save you that interest rate per year per £1 paid. Putting that £1 elsewhere for a higher return means your money is working harder for you. We overpaid out mortgage quite a lot when we took it out when the rate was about 2%. I now realise we should have invested that money for a much higher return.

There are mortage calcuators you can play around with - see what effect paying different amounts off has for you.

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

You don't consider the rate on the whole balance, just what you want to overpay. So say you had 10k and your mortgage was 2.1% like mine is - you'd pay £210 interest for the year on that amount of the mortgage. My ISA is 4% so I gain £400 over the year on it. That is very very simplistic as an example but is why we are not overpaying (10 year fix with 6 left).

if OP can reduce amount to 120K by adding 150K saved she must currently have a mortgage for 270K typically on a 25 year mortgage that would be £1350 a month @ 4%(maybe less if mortgage was taken out 5 years ago) she is adding £600 extra making 1950 a month
if you then repay a 120K mortgage at £1950 a month it will take 6-7 years to pay off
if you are in late 30's I would suggest you re mortgage with a 10-15 year term max as you are already overpaying
you want to keep a good emergency fund etc as you don't want to have to take out a loan for a new car at consideralby higher interest because all your assets are tied up in the house