Paid off our mortgage

[Mumoftwoyoungkids]

If you are struggling for money then please don't read this thread - I don't want to upset people!

We paid off our mortgage last week. We are mid - late 30s. (To be exact I am mid and dh is late ). Paid it off by over paying every month as much as we could.

Nobody knows. So I thought I'd tell on here.

It feels a bit weird. My brother is planning on buying a new house ATM so we were all discussing mortgages and mortgage rates over Xmas. It kept hitting me that we no longer have a mortgage rate. Felt a bit of a fraud.

Feel like we should have a party or something. Except we can't tell anyone!

Anyone else in the same boat?

Wow well done op! That's an amazing achievement and something I can only dream about! I'm 26 and am hopefully exchanging in the next week or 2 and will be taking on a £150000 mortgage on my own! I would love to overpay but want to get some savings first. I'm already slightly obsessed with the mortgage overpayment calculator though!

haha banananugget I was the same with the overpayment calculator - still am after two years

I've sort of paid ours off. We have an offset account and the offset account just about covers the total mortgage as of this month, so while we still make a payment each month it's now all principal and no interest.

My maternity pay stops this month though, so we will go backwards for a little while as we start to use savings, but it was lovely working out it was paid off!

I have been sick and a high risk pregnancy for the last few years, so no travel, no nights out, no dinners out, no impulse spending etc. Worked from home a lot, spent a lot of internet shopping, but that's what made a big difference to saving up 50%. The other 50% was a critical illness insurance payout. It's a silver lining to being a bit trapped and mistake, but now I'm healthy with a lovely little boy so just in time to enjoy the freedom!

Tip: get critical illness insurance if you can. It's not expensive and since a huge proportion of people will get cancer, more than half of which are now survivable, it's money well spent. It will literally change my life.

*miserable. Not mistake

Technically, we were mortgage free 3 yrs ago but then grabbed the opportunity to buy a doer-upper in a great location. A renovation overhaul plus major extension later with the help of a mortgage, we will not be needing to upsize anymore. We do overpay and live relatively modestly in relation to household income and are on target to pay off our mortgage before I hit 50, just in time for dc1 to hit uni.

I have friends who have always paid down their mortgage by just living on one salary (dual income household with one school aged dc). We have a similar household income and had similar sized mortgages 8 yrs ago. The main difference between us is that they have been more frugal and not moved house like we have and have been content with a more modest house. Basically, they pay a mortgage of £200 PCM whereas ours is £1200+ (We actually pay £1600 so overpay by £400 PCM!). They are certainly reaping the benefits of having more disposable income since they are spending christmas/new year in Hawaii!

Well done op, that must feel fantastic!

When I was living with/married to my oh we bought a house in the early 90s for £47k. Had two reasonable salaries, but frittered our money away, borrowed more and more, eventually moving to our dream house with a mortgage of £180k (gulp). We then split up, divorced, sold the house with a bit of a profit and had £20k each to start again. I now have a 3 bed semi which I love but have about 19 years to go on the mortgage so that's not good. Especially as I am now 49! I have a goal this year to pay more off every month, but am currently job seeking as I am unhappy in my current contracting role, so not sure what my income will be.

Anyone got any advice on what to do re making improvements to your current home whilst also overpaying? I would like a new kitchen (actually the kitchen is terrible and needs to be replaced) and there are 2 bathrooms which could do with updating, but how does this work if you're overpaying? Do you just forget about improvements until you're mortgage free?

Hi,

Well done and congratulations. It is such a relief to pay the mortgage off and you can really start living now.
We almost paid off our first house (pre-kids) but moved to a bigger house. We are due to finish ours in March 2017 and we overpay, like you did. We hardly paid anything extra when the children were pre-school age as childcare fees were scary.
I can't wait for ours to be finished!

Chimi It's a balance I think. It took us 8 years to pay off the mortgage here although we bought our first house in Dec 2001 and have always overpaid where we could. 13 years is far too long to live completely frugally unless you have no choice.

We picked a monthly amount for our mortgage that we treated as our "mortgage payment" and we always paid that - almost convincing ourselves that we would lose the house if we didn't. That amount was our original payment on our original mortgage when interest rates were at their highest then rounded up to the next £100. This was good in 2 ways - first it meant that we were paying more and more off the capital each month as the interest payment was much ess than the amount was calculated. And secondly it meant that we weren't worried about interest payments going up - because we would still be paying the same - it would just be annoying that the mortgage went down less.

Other money we tried to be a combination of sensible with whilst still enjoying our life.

One thing we found was that the more we paid off the easier it was to pay more off. Partly because you are paying less and less interest as your capital went down. And partly because once our mortgage became less than 40% of the value of our house we were able to change lenders and get a really low rate on our mortgage.

One thing I do regret though is that I think that sometimes we were a bit too sensible. With hindsight I wish that we'd had a couple of extra pre-kids holidays and been due to pay the mortgage off in February. But we wanted to get as much paid off as we could at the time as we didn't know how money would work out once we had the kids.

There's definitely a tipping point, about half way through I'd say, where it gets easier to overpay because each overpayment is knocking almost the whole amount you've overpaid off the mortgage. You begin to see the mortgage going down.

Just keep chipping away at it Chimi. We've always rounded up to the next £100, put any payrises toward overpayment and if we got any unexpected money (tax rebates, inheritance etc) they went straight to the mortgage.

Congratulations OP!! That is great. My DH will be so jealous, he is very keen obsessed with paying the mortgage off.

We are in our early 30's, and have around 5 years to go. We have overpaid by almost double over the last few years. We moved a couple of years ago, and had to increase our term. We were lucky that we bought our first house before a massive boom and made around £80000 on it.

All sounds good doesn't it, but we got a shock last Xmas to find out we were expecting baby no 3!! So we are currently in a 3 bedroom house with 3 dc's, but due to my dd's disability we are going to need to upgrade to a four bedroom.

But we have a solution that we can buy in laws house and extend, they are divorcing. DH has been busy on his mortgage calculator working it all out!!

Congrats OP! We paid ours off, and enjoyed having a bit of extra money for a year or two, then decided to move to a bigger place/better location, partly using money we'd saved during that couple of mortgage free yers.
We only told dh's parents & my dad when we paid it off - both could be pleased for us/not worry about our finances, but wouldn't tell anyone. I agree that it's the kind of thing where I'd feel 'judged' ('if they can afford that why don't they ....') so wouldn't tell friends/peers/siblings.

We took a very similar approach to you, OP - always overpaid, didn't decrease the amount as interest rates came down, and I work freelance, so any money I have 'spare' goes straight into the mortgage - as I get paid in lump sums, that works well, and it's money we don't miss, as dh's salary goes into the joint account, whereas mine is officially for savings/emergencies.

We were going to pay our mortgage off but decided to move to a bigger house instead - our worry was two fold.

Firstly we didn't want priced out the market by not moving as soon as we found a bigger house we liked and...

secondly we didn't want to get used to spending the money we used to pay a mortgage with on other things then a few years down the line decide we do want a mortgage but don't know how to find the extra money every month for a mortgage because we had upped our spending on other stuff.

In fact we are kind of back in the same position we were 6 yrs ago but this time have decided to wait until we see what's going to happen to the market over the next yr or so. For the time being cash is king and if the market moves one way or other we have the luxury of having cash to buy instead of borrowing additional funds.

We are aiming to be paid off in about 3 years time. As the rates dropped over the credit crunch, we were lucky enough (despite paycuts) to be able to keep paying the original repayment level and asked that the BS not reduce the payments in line with interest rate drops. So we will end up paying off our 25 year mortgage in just over 15 years. We will be early and mid 40s.

We won't be saying it either though. DD will be going into secondary school, we will probably buy a holiday home at some point (to escape the city), and we will continue to put away most of the repayment amount on a monthly basis (after a gap of maybe 2 months to treat ourselves) into some sort of savings plan to facilitate that.

I know my aunt retired 3 years ago and was telling me recently about the day they paid over their last cheque (went in person to do it) to the BS - only 18 months ago!! (She turned 60 last year). And I know my parents have still not paid off theirs (they keep remortgaging to extend or buy yet another house - they bought a 4th over the summer!!) - both late 60s and DF retired (DM was SAHM since marriage).

Well we've ordered new wardrobes and booked a holiday!

"Mortgage money" now spent for January, February and half of March!

It seems we are quite good at spending.

Hi OP
I was initially feeling pretty green-eyed and then I realised that I would have been you in 10 years if we hadn't moved!

Old house- small mid-terrace would have been mortgage free at 43 (or earlier)
New house- semi with heaps of potential and divine kitchen extension in nice location and will be mortgage free at 63 eek!!! MUST begin those overpayments!

Well done you.

When the childcare costs come down I intend to overpay too. Assuming interest rates stay manageable and we aren't paying extra to cover that anyway!

Oops - sorry - just saw this was a zombie thread poked by a media bot.