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Original poster

Could we pay the mortgage off?

12 replies

Guitarcigar · 04/09/2023 20:31

So tonight I’ve been playing around with the mortgage overpayment calculator online.

if we were to pay £2500 for the next 35 months it would be paid off! Starting to think we could do this.

we earn 6k net between us. Our house bills are around £800 (excluding mortgage) and then £500 for food. Car cost £280. Paying £2500 would leave us with about £1900 for saving/ hols etc

would you do this?

OP posts:
LittleMrsPretty · 04/09/2023 20:32

Yes you will save loads on interest, you need to chexk if there are any realy repayment fees though

LittleMrsPretty · 04/09/2023 20:33

*early repayment fees

ModeWeasel · 04/09/2023 20:33

Yes I would and you could. You will feel amazing and have an ‘extra’ £2.5K a month when you’ve done it!

MSE forums has a mortgage free wannabe area - great for inspiration.

Temporaryname158 · 04/09/2023 20:34

I absolutely would if I were you yes. The amount of interest you save would be phenomenal. After that I would treat yourselves to a good hol/whatever you enjoy and then start putting extra into pensions

Bookish88 · 04/09/2023 20:34

What should your normal mortgage repayment be, relative to the £2500 you want to pay? Some lenders limit the amount you can overpay each month. With our (Natwest) mortgage I believe it's £1,000.

LadyBitsnBobs · 04/09/2023 20:35

Probably not based on this information.. I’d do more research, save and think about where the money will work hardest (are your pensions in good shape etc).

We have just paid off our mortgage (late 40s) and I’m honestly now not sure we should have. I think we panicked when interest rates rose and we came of our fixed rate. We should have got some independent advice.

I do definitely support saving though, as long as you don’t have to live a ludicrously miserly life to do it!

RJnomore1 · 04/09/2023 20:36

What’s your mortgage rate just now?

if you both bung it into an isa you would get about 5% which might be more than you would save in your mortgage, let you pay off a month earlier (!) and mean if anything went wrong you had the cash there too…

jallopeno · 04/09/2023 20:39

RJnomore1 · 04/09/2023 20:36

What’s your mortgage rate just now?

if you both bung it into an isa you would get about 5% which might be more than you would save in your mortgage, let you pay off a month earlier (!) and mean if anything went wrong you had the cash there too…

This is the all important bit. Mortgage rate vs savings rate

ImAHigherEarner · 04/09/2023 20:47

NC'ed for this.
We earn a similar amount , with similar expenses are are doing this.
However we're not overpaying - putting the money into ISA's with a higher interest rate than the mortgage. We will overpay at the end of our fixed term and most of it leaving a tiny mortgage by the time we TTC.

things to note:
a) early repayment fees./ We can pay up to 10% of the annual outstanding balance and this is further broken down into a monthly max (i think it's 3 times the monthly repayment) otherwise there's a 2% penalty
b) Emergency fund - do you have this? Our mortgage allows us to underpay as well as overpay so while we do have an emergency fund if things go tits up we can have a payment holiday. We do have an emergency fund it's not 6 months expenses, in any case we can just about manage on a single salary anyway.
c) Tax on savings. if you're a higher rate taxpayer you can only earn up to £500 interest tax-free. If you're already maxing out ISA's for the year then you need to the figures, paying off mortgage instead might be worth it.

I don't understand why PP are talking about holidays and 'life is short' 1.9K a month is some people's entire salaries! Even if you spent half of that on non-food expenses like transport, beauty etc that's still £800 a month, 7K a year for you to spend on a holiday. That's more than enough unless you have champagne tastes.

TeenLifeMum · 04/09/2023 20:49

I’d rather enjoy holidays than pay off my mortgage because life is unpredictable and short but technically yes you probably could with tight budgeting.

ImAHigherEarner · 04/09/2023 20:54

*950 a month 11400 a year that should say not 7! too late to edit

Littlemissweepy · 04/09/2023 21:30

Yes I would, if I had 2.5k spare (without cutting back to bone) after I had maxed my pension allowance and isa allowance each tax year.

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