[Closed] At what age do you want/envisage to be mortgage free?

2 years, 53

So, over-payers, how much extra (in percentage terms) do/did you pay and what does/did that do to the term of the loan?

@Jambalya, as you paid your debt off I presume you are single... but are you a british national (Domiciled in the UK)?

I only ask as british domiciles pay IHT on world wide assets (as far as i know) so an offshore home would be part of the IHTable estate.

It has been my number 1 obsession for the past three years, what with having essentially given two previous houses away 😈 and almost started again. If I hadn't done that I would be living the life of Riley now. I dream every day of getting rid of the mortgage. Technically currently it is the 1st August 2018, but I have an ambition to rid myself of its evil shackles sooner than that.

I suspect that a number of the ones above who were mortgage-free at a young age don't live in the south.....!

ourmaninthenorth - it's a function of interest rate, outstanding and amount / time that overpayments are made. One of my greatest pleasures is adding an overpayment to my chart and watching the date come in closer......hmmm, I'm sou nding scarily obsessive now.....

Over payments? why do this when mortgage rate at 2.5% when cash ISA rates at 4%, which are "safe as houses"
Save separately and when the investment value grows to the reduced level of mortgage pay it off

A question for the STWers with investment properties if you have 100%, or there about, mortgage and you bought fairly recently and your charging £500/600 mth is it covering your costs bearing in mind house prices still appear to be falling!

I suspect that a number of the ones above who were mortgage-free at a young age don't live in the south.....!

Must be at least one lottery winner on STW......

Changing mortgage at the moment to offset. On basic terms it will be 25yr repayment which will take me through to late 50's. Wife and I currently thrashing out a plan to cut down outgoings and really hammer the overpayments, looks like it can be cleared in about 6 years.

Offset is definately the way to go.

Smarty> because not everyone pays 2.5% on their loan?
& even cash isa isn't totally "risk-free".

smartay - the depositor insurance scheme has an upper limit. And ISAs are limited to an increase of £5,600(ish) a year.

what loan rate do you pay on your offset Franksinatra?
Who with?

Still £5600 /year at 4% ( I agree at the moment) x 2 gives £11648ish off the sum per year, not bad

I suspect that a number of the ones above who were mortgage-free at a young age don't live in the south.....!

North east Scotland, the particular bit I live in is nowhere near as cheap as someone taking out a mortgage would like. The big advantage is that there are places not too far away that can provide awesome properties for the same cost.

As per smartay, all my capital is paid off through shares (mainly maturing employee share schemes) and ISAs

I am offset, but there are also other things you can do like take out 0% purchase credit cards and max them out for the period. All helps keep money in the offset pot.

I do take money out of the offset pot to put into cash ISAs as the interest rate is higher.

With offset, you pay everything you earn less costs into the offset, its highly motivating to keep it all there and watch the interest payments drop.

RBS, variable rate, currently 4%. 80% LTV, £500 set up fees.

Wife is tecnically self employed so saves her tax, using this and kids savings for the offset. Overpayments can be made at any time and interest is calcualted daily so instant saving for any overpayments. (I don't work for RBS, just think it seems a great deal and the only offset I could find for 80% LTV)

why do this when mortgage rate at 2.5% when cash ISA rates at 4%, which are "safe as houses"

Because current mortgage rates are not that low - my recent lending was at around 3.5% - and if you use an offset mortgage you're avoiding interest on taxed income. As a higher rate tax payer you'd need to be getting 5.83% on your ISA.

My household wont go without to do it but im about 6 months in a 25 year term and paying in 250 extra a month seems to save me such a crazy amount(several 10s of thousands) in interest over the term and 8 years early that it seems like a better prospect than sticking money into my savings. - interest rate on my mortgage is about twice that of my best savings rate ( still have a couple of isas open with emergency money but ive stopped paying into them.

8 years early would see me 42.

But Best laid plans of mice and men, nothing can be relied on in this life !

61I think, no pension either. Meh, got more important things to worry about 🙂

paying in 250 extra a month seems to save me such a crazy amount(several 10s of thousands) in interest over the term and 8 years early

Saves us £87k over term of mortgage if we can actually pay off as quickly as we think we can. Not going to earn that in interest anywhere else! It is a no brainer.

Only disadvantage I can think of owning, is that round these parts mid priced houses just arent selling.. So I'm trapped in a property that I've lived in for 20+ years, thats way too big for our needs now the kids have all flown the nest.

Completed the re-mortgage on our house yesterday -
If we stick with the current arrangement (30-year loan!) for the lifetime of the mortgage i'll be a month short of my 70th birthday when I pay it off!

However, this crazy situation is a tactical move to raise funds to extend (and add lots of value) to our scabby 2-bad bungalow.
When the 2 year fixed rate is up we'll re-mortgage and shorten the terms, then start over-paying when my youngest daughter starts school.

Longer term we hope to be Mortgage free in our mid 50's, however as others have said, I won't be slave to it, if it stops us doing other things.
It is all subjective anyway - we could move somewhere not quite as nice tomorrow and massively cut our loan, but I'm prepared to pay a premium to live where we live.
I'd rather be paying out a few hundred quid a month right up until I retire if it means I get more holidays/good life experiences etc..

Currently i will be 51. Im 35 now. I keep toying with the idea of increasing the term to make life easier now, any views on this? I know it will increase the overall interest but the up side is i wont be struggling as much now. Its not that we would rush out to buy new things but not having an overdraft would be nice.
Ive a modest house in a nice area, 2 cars paid for and 2 kids were constantly paying for! Smallish overdraft and No cards.
Interested to know if Inheritance helped any of you. I have been told i will inherit money from an uncle, he told me himself and often jokes about how he keeps his house tidy for me so it will sell well when he has gone. 😥

Interested to know if Inheritance helped any of you.

hmm 🙁

Sorry.

But renting for life will be very expensive, especially on a pension (as the days of generous pensions are well gone).

The UK has been pushed into home ownership, but jobs are no longer secure, ownership is starting to hit a lot of people hard, and IMO its going to get worse. It may still only effect a minority, but its not a small minority.

We're in the process of buying a bigger place so our term is being extended for to 20 years meaning I'll be 56. I'm OK with that but of course I'll be paying it off quicker if I can.

Paying off quicker is a good idea (I had been to get the term down to 16) but remember the interest savings are in today's money, in 15 years time that £30k interest saving wont be worth so much.

For those who decide* to rent for life I hope you are putting any savings from your descision aside for yor retirement / going into care. *As opposed to being forced.

@croctchroket - married with grown up kids, I have a mortgage but could buy a smaller place mortgage free, we don't need a big family house any longer so it's an option.

I am a UK citizen. Yes if resident in the UK I would pay IHT on my assets, but not if I were resident abroad. That was my point, it's a very real option for me to reside abroad and IHT is a factor.

For those who decide* to rent for life I hope you are putting any savings from your descision aside for yor retirement / going into care. *As opposed to being forced.

What are you doing to plan for when you are 50 and jobless and lose your lifes investment?

And what savings, renting isn't cheaper, its just more flexible.

nosemineb - Member
hmm

Sorry.

I bought an iPad, had 'Mum and dad' engraved on the back then put the rest in the offset mortgage account.

i'll be a month short of my 70th birthday when I pay it off!

My Parents in law were in a similar situation until FIL hit 65 upon which the bank demanded he repay the mortgage instantly! After a lot of arguing he now has 6 months grace.....

On target to have it settles in 5 years, when I will be 48 but it may be a bit sooner.

Originally, when it was set up, it was on target to end when I was 55 but we got one of those offset mortgages that means you dont pay interest upon part of the loan equalling the amount of money in your account. (eg 100k mortgage, 5k in the bank, pay interest on 95k)

We paid the same amount every month regardless so the amount of money necessary from not paying interest has slowly chiselled away at the actual amount thereby reducing the term

Just by having a few grand in the bank (and I mean only a few) the term has reduced nicely by 8 years.

I keep toying with the idea of increasing the term to make life easier now, any views on this? I know it will increase the overall interest but the up side is i wont be struggling as much now.

A good friend of mine who is also a financial adviser tells me he talks to lots of people who aspire to pay off their mortgage early hoping for the holy grail of a worry free retirement and ridding themselves of the stress of losing their job and being out on the streets etc.
He tells me it rarely happens however and that many of his customers make a great deal of sacrifice today in terms of missing holidays and working extremely hard while their children are young to be in a position later on where they are financially secure but lack the health/energy/motivation to do the things that they deprived themselves of earlier in life.

The trick is to find a balance because you are a long time dead!

To answer the question I am 48 now I expect to be mortgage free in around 8-10 years.

The trick is to find a balance because you are a long time dead!

I wouldn't let the 'paying off your mortgage' dominate your monetary thoughts too much......after all you might be dead next year!

Don't forget to smell the flowers along the way!

[i]I bought an iPad, had 'Mum and dad' engraved on the back then put the rest in the offset mortgage account.[/i]

makes a change from a bracelet I suppose!

What are you doing to plan for when you are 50 and jobless and lose your lifes investment?

And what savings, renting isn't cheaper, its just more flexible.

makes a change from a bracelet I suppose!

The trick is to find a balance because you are a long time dead!

That's true of pretty much everything in life. No-one ever died wishing they'd spent more time in the office

+1 Surfer's advice, it's a balance. Either extreme is painful.

Obviously trying to get rid of mortgage early as possible. but like most people on here hope to down size pocket the cash and enjoy life.

However with the number of people in temporary positions there could be a severe knock on as the housing markets shrinks as less people can buy but only rent.
Not my ideas one of these think tanks

3 more years - at 46 - unless she persuades me we actually do need a conservatory. And another 10 years of debt. When we clearly need more bikes and no debt!

no inherritance here thankfully.

I did a heap of working abroad to raise the deposit - 2x 6 month stints in west africa and in europe.

I am almost 40 and I work hard 45-60 hrs a weeks random hrs at my job. I get 6.60 hr. I don't get a full time contract even after working here for 5 years. I am one of the majority of workers that do unskilled labour for massive corporations. I will never be able to afford a mortgage, never mind how hard I work.this is life for many ,many hard workers. and what you lot are describing above is anathema to me.
I like riding a bike cos it's what I can afford to have fun on.

Currently i will be 51. Im 35 now. I keep toying with the idea of increasing the term to make life easier now, any views on this? I know it will increase the overall interest but the up side is i wont be struggling as much now. Its not that we would rush out to buy new things but not having an overdraft would be nice.
Ive a modest house in a nice area, 2 cars paid for and 2 kids were constantly paying for! Smallish overdraft and No cards

Mine should have been sorted at 50, now more likely to be 62/65. It would be nice to be able to say I'm mortgage free, but I got over that. I pay way under £200 per month now, so no need for an overdraft or cards ( I have a £500 card though) no pressure to earn, in fact I've stepped back. If I need something I buy it. So since extending the term my finances have been far healthier.
I've never been a big earner, probably what you call average.
Wife gave up work when we had kids.
No inheritance, son of a 60s single mum.

Oldgit mode on. What really helped was early saving and cutting back or not buying luxuries i.e drove an old banger and didn't buy lots of new stuff for the first place. Young guys I work with can't afford a deposit, but buy BMWs Audis and have three overseas holidays a year as well as spaffing £££££ in the pub each week. Off.

Edit; I meant to say I've been divorced as well, I can't tell you how much that hurts finacially at the time. So paying it off early might help if that happens to you or your job goes tits up or your health fails. Otherwise pay as little as possible, I could survive selling on Ebay.

"Young guys I work with can't afford a deposit, but buy BMWs Audis and have three overseas holidays a year as well as spaffing £££££ in the pub each week. Off. "

My mates and my boss are the same .......my boss actually commented the other week "i dont know how you can afford that house(although he has no idea what i paid) on your salary" ..... urm cause i dont smoke , drink much , drive a flash car , have kids ,go on holiday to 5 star resorts in exotic places , drive to work.

another of my collegues aspires to buy a house but spends 100 pounds each friday/saturday night at the weekend as a minimum he says. My mind boggles at that thought. spends monday and tuesday like a half shut knife.

My plan was not to get trapped in the Cant sell for a loss must rent out flat problem that quite alot of friends and colleagues are trapped in at the moment , far to many flats on the market in my area.

Anyone any good at maths? I'd like a formula that shows me:

Monthly payment, interest rate, repayment term, <enter monthly overpayment here> =effect on repayment term.

Or the reverse, basically so I can work out how much to overpay to end my mortgage 5 and 10 years earlier respectively.