Has anyone paid off their mortgage early?

[brick15]

If so, how did you do it? Our mortgage still has another 20 years to go and it’s daunting thinking about it so I’m thinking about ways to repay it early and wondered if anyone could share their experiences. I work full time already and don’t have anything left over to make extra payments. I could try get a better paying job. Any other advice?

TIA

Every time we remortgaged (every few years) we'd take some years off the repayment. It bumps the monthly payments up of course. And we'd overpay wherever and however much was possible. We paid our first one off by age 38. We bought a much more expensive house a few years later though so are now overpaying this mortgage as much as possible.

Yes, overpayment is the way to go. Also, we’re saving up a lump sum so that when we remortgage in the Summer we can pay nearly £20,000 off the capital. This lowers the monthly payments and means you then have more left over to save up another lump sum.

We think with this and overpayment we can get our mortgage finished in the next ten years.

Oh ok, that’s helpful. I hadn’t considered that so will look into it next time we remortgage, thank you @Petulia

I got a second job and worked in the evenings as well.

Cut my living costs by having free or very cheap hobbies. Didn't go to the pub or eat out but invited friends to my house for drinks or did pot luck meals. Didn’t buy take away food or buy coffee and sandwiches at lunchtime at work.

This enabled me to pay off my mortgage by the time i was 40. If I’d had a partner I could have done it sooner.

well mortgage payments tend to stay the same but wages generally go up gradually so as time goes by the mortgage is a smaller and smaller % of income
so in theory if your monthly income is 2000 and repayment is 500, next year you get a 2% payrise so monthly income after tax is 2030 , if you also give 2% rise to mortgage payment it would be £510 so if you increased your mortgage repayment in line with this it would slowly reduce term, if you threw the whole £30 a month rise at mortgage it would reduce quicker

Small amounts add up so we never switch out payments if they go down and aim to overpay a little bit each month

Definitely agree overpayments are the answer.

We paid our first mortgage off in 4 years by making the maximum overpayment each year which in turn lowered our monthly payments as previous posters have mentioned. Although this was only manageable in such a short timescale as we had put down a 40% deposit.

Tbh we made the mortgage a priority over that time and that obviously impacted on other spending but it was very much worth it.

Economise on something, cook more, use own label, change toiletries, walk to work,, take a packed lunch - and then pay the extra £30 a month off the mortgage.
It doesn’t sound a lot but compounded up over 20 years it will save you a huge amount. This is a (very) long game.

We've just paid ours off. We took advantage of the low interest rates by paying the same each month as we had been paying when interest rates were higher.

We could make over payments without penalties though

Economise on something, cook more, use own label, change toiletries, walk to work,, take a packed lunch - and then pay the extra £30 a month off the mortgage

Most of my colleagues spend about £4 a day on lunch and then another £2 on a coffee. That’s £120 a month alone.

Taking your own lunch is a big help. DH and I are on a really tight budget for the next four months to pay off the last a an old credit card and then save a big lump sum. Once this is done we will have more room for nice things like eating out.

But we’re also not going on a foreign holiday this year and I buy everything except meat from Aldi.

watch out that your mortgage company won't penalise you if you overpay.
We were with the Halifax, and you could pay up to 10% extra without penalty - so that's what we did. It also meant that we had the comfort that we could drop our monthly payment if needed, though thankfully that never happened.

I’m working on paying ours off at the moment. Firstly find out how much you can overpay without penalty. For us it’s 10% of outstanding amount per year. I overpay by 10% of the payment each moth- ours is huge so that’s £250 a month. Then 50% of any bonuses etc goes into the pot. We’re renovating so the rest goes to that. We’ve been here 3 years and have paid £80k off mortgage and added £100k in value. We only had 10% deposit when we moved in so hopefully that when we remortgage when this deal ends in 2years we’ll have about 40% equity so can get a better deal but continue higher payments.

Some good ideas on here. Thank you all, these have inspired me. I’m going to start by putting money on potential takeaways to one side and finding something to eat indoors. I’ll see how much that adds up to a month and use that as overpayment. Will also try and take lunch to work most days.

Make sure you check the t&c s of your mortgage deal - there are endless permutations and some have no overpayments allowed or very hefty penalties for doing so (balanced out by lower % interest or a longer fixed term).

We overpayed by the difference of our private rental with the mortgage (around £300) and its taken 5 years off the repayment term, we also could extend our borrowing when we bought up from a two bed to a three bed.

Hands down best finacial decision we made for our circumstances.

I heard of a person who every day paid down the mortgage to the next whole pound - barely notice it day to day but pays off a massive amount.

Go on the money saving expert forums there's a specific one for paying your mortgage off. I over pay regularly monthly only by £100 but it's amazing when you look at overpayment calculators what a difference it can make.

We are fixed in atm but to be honest I won't reduce the term and be fixed into higher payments in case of illness/redundancy etc. I'd rather have a smaller amount topped up by overpayments and then i can cancel if needed

Ours is due to be paid off in the next year or so- 11 years early.
We used a combination of overpaying and offsetting. Every pay rise we increased the mortgage payments and didn't adjust them down when interest rates fell. We also have our current and savings accounts offset against the mortgage so we aren't paying interest against the equivalent amount of mortgage. We are now at a stage where we are interest free as the money in the offset account equals the mortgage. Technically we could pay it off now but we want to keep our savings as a buffer for things going wrong so prefer to keep on with the monthly chipping away at the mortgage so we come out the end mortgage free and with savings.
It's been hard at times (especially with childcare costs for 3 kids) but it has been hugely satisfying to see the mortgage come down.

In the early years of paying your mortgage be a mortgage tart and switch deals/providers as soon as your existing deal comes to an end, looking for one that has minimal or no transfer fees. In the closing years of your mortgage stay with the same provider but get the cheapest deal that they offer (otherwise the transfer fees outweigh the savings).

I've been lucky in that I used to work in finance and had a staff mortgage. Then later when I was working for another company they relocated which involved a house move for which they covered my personal relocation costs.
We've also used money from missold PPI and a substantial gift from my DM to repay early.
We only have 6 years (5 years of which are fixed) . However I am looking at repaying early.

Wow @Dockray 11 years early?! That’s phenomenal.

We will have paid ours off this years over 2 years early, and we had already shortened the term by 10 years when we remortgaged. We are on a tracker, not a fix, so can overpay as much as we wish each month without penalties.

I'm not in the UK and I see time and time again about re mortgaging all the time.

How does it work towards taking down the term/balance quicker?

Generally were I live you take out your mortgage and stick with the provider and can switch fixed to variable and a remortgage is to pretty take your equity out which usually increaes the term/debt.

Banks are starting to advertise switching but it's not the norm as yet.

We overpaid and off set against our savings. We paid ours back decades early. We’ve been mortgage free for over 10 years.

Re mortgaging is basically moving your loan elsewhere. New mortgage pays off old mortgage. You can shop around for better deals and lower interest rates.

Even paying £10-£20 extra adds up over the years. I've taken 2 years off mine so far, LP so I think that's pretty good going.

I cleared mine with an inheritance.