If you are mortgage free...

[DarthVader]

how did you achieve this?

We were lucky and my parents helped us out

We're THINKING about trying to get it all paid off but our mortgage is enormous (live in London and only bought house 2 years ago). Don't think we have problems with cutting back on things - like nothing more than cooking dinner for friends rather than eating out etc. - but it's more that we need to make a conscious effort to save that money somewhere so we can make regular overpayments and have goals to aim for around how much overpayments should be.

However, am expecting DC1 in March so not sure if we really will be able to cut back (am intending to get lots of second hand and basic bay stuff though so hopefully it won't be as expensive as people have led us to believe!)

We have bought horrible places and done them up five times in past nine years. We were lucky that we bought (and sold) at right times and that I got a big redundo pay out that helped with last place. Now we will sit tight until dc are at school and I can work more fully before we move again and have to consider a mortgage - joy of not having one is very hard to articulate. Completely disagree with Minty that it is daft to pay off mortgage, one should always stretch oneself - freedom plus living in moment worth far, far more IMO.

Added to churn of buying/selling, we are also very unextravagant in our spending - cars we have had are ones other family members no longer wanted; we don't eat out very often; holidays are fairly basic. This hasn't been in order to keep the mortgage down but simply because we're not madly keen to spend time in overhyped restaurants or oversubscribed hotels. If I see something in a magazine or shop I really want, I always wait for it to come up on ebay - so far, so undisappointed. Try to bear in mind that personal loans - and the people who offer them - are evil.

Agree totally re personal loans and their evil peddlars!

HQ, don't buy ANYTHING above and beyond mere basics. You will be overwhelmed with gifts and things that friends/relatives/people you meet at the bus stop have and are looking to get rid of. Kitting out a baby really needn't cost very much - it's the subsequent childcare and/or reduced earning capacity that hurt like mad.

Ah Yes, Minty, but we're not all talking about just one property here.

Unlike most property speculators who happily mottgage their own home to the hilt, we aim to be mortgage free on our own residence and leaving us to continue to play the leverage game with the rental properties, all tax deductible interest obviously. Unfortunately the rental income to property price ratio no longer makes it worth the effort to increase the portfolio in our neck of the woods at the moment due to an extremely silly rise in property prices over the last 10 years.

We did seriously stretch ourselves over more than one mortgage several years ago and we couldn't afford to buy the same properties now but hey the mortgages are easier to manage the smaller they get.

With hindsight of course we could all have increased our retirement pot by maxing out on the mortgage some years ago but now......

Hindsight is a wonderful thing. People maxed out in the 80's in the belief that property prices could only increase. They still did increase over the last 20 years but you had to hold your nerve and be able to find the resources to deal with some massive interest rate rises in the meantime. Maxing out then bankrupted many people and led to loads of repossessions.

BTW Minty, you're not related to a Ms Millard are you ?

I hear she maxes out on the property debt and then has to write ever more tedious articles for the weekend papers to fund the nanny.

Up until a few years ago I seriously hadn't heard of anybody in their 30s or 40s paying their mortgage off. A mortgage was something you got, paid into steadily and sensibly for 25 years and finally shed in your 50s or even 60s. The idea of us paying ours off is total comedy at the moment. I honestly don't know how people do it. We don't live "extravagantly".

The only thing is that we had to get a bigger one than we would have wanted just to live where we do. In Sheffield you pay through the nose not for a "posh" area but for somewhere which is reasonably nice. I imagine there are other parts of the country where an "average" area would be OK to live in, but I don't want to live in "average" South Yorkshire, as by the standards of the rest of the country it's grim.

Rich PILs.

The joke is this. You spend years accumulating investments and paying off your mortgage. You then realise you have a huge inheritance tax bill on your hands unless you start divesting yourself of your investments and property as soon as possible. Or pray for a Tory victory at the next election and for your old body to hold out til then.

Well, since I spend my days dealing with people in severe financial difficulty, I am extremely happy to currently have no mortgage or any other debt. I see lots of people mortgaged to the hilt and people who have been burned in the buy-to-let market.

Also, as I mentioned before, my dh was out of work for a year and if we had still had our mortgage we would have been stuffed.

swedes - It may come as a shock to you, but you won't pay inheritance tax whichever party is in power because you'll be dead. have you considered that? most people howver invest for their retirement instead.

i'd gladly mortgage my soul for a cool car.

any takers?

Senorpostrophe - Actually you are wrong. If your DH or DP pre-deceases you and you own your home as joint tenants - as most married couples do - you might have to sell your home in order to settle any IHT bill arising from your DH?DP's death.

you could always leave it to a trust and then appoint your children as life-long renters so they won't have to sell your home to pay your nursing home costs.

not if you're married you don't.

expatinscotland - that would not work. It is called deprivation of assets. You can read about it here www.taxationweb.co.uk/tei/article.php?id=161

expat, really? you think it's OK for someone to do that? it'd serve them right if their children evicted them.

as the thread has morphed a bit - can i ask - do youthink its better to be mortgage free - in a poky little place ( or v. small mortgage)

or get an afordable mortgage with a large deposit?

am thinking the latter would afford a fabbo house and more equity in longrun? waddya think.

We paid our mortgage off about 10 years ago - by just over paying. In the early 90s interest rates went up to about 15% and when they came down we carried on paying over the odds until it got down to about 6,000 and then we paid that off in a lump sum.

With hindsight it might have been to our advantage to take on huge mortgages after this point, but I feel we have always had an easy life with little stress about money and I don't think that I would have changed that. We have always saved quite a lot of money, invested mainly in equities, etc and I can't say that I regret this as we have made a tidy sum from it. Okay - we don't rent out 10 houses, but I don't really want that hassle. Being a "property developer" doesn't really appeal - I don't want to uproot my family every year for the sake of money.

As an aside, I would question the wisdom of excessive leverage at this point with the property market - prices can go down as well as up - but who knows!

I'd rather be mortgaged forever than pray for a Tory government...
Yep for sure

SP, I do not know enough about it to know if it's okay or not.

In fact, I read about about it in an article in The Scotsman online a week or so ago. An Edinburgh man, a solicitor in a prestigious firm, apparently did this with his £600,000 house, and the article said this was apparently not uncommon amongst the wealthy.

Needless to say, I would not know myself.

Swedes, let me dig up the article.

Because there is a loophole to this.

Obviously, the chap being a lawyer, he was able to plan his will accordingly.

I meant morally.

Age
Girth (little known inverse correlation between waist size and mortgage value)
Mildly obsessive behaviour

Some people I know lived on threepence ha'penny - did the whole no car, no holidays, no clothes, no food unless it was homegrown (the last point is a bit of an exaggeration but not much - an allotment was involved) no children until most of the mortgage had gone ,,,,