[Closed] Paying off mortgage?

If we had an offset mortgage, we'd never pay it off...

I'd watch the early redemption fee even if leaving a small amount on the mortgage.

There'll be a maximum amount that you can overpay in a given year. I think we can only overpay by 10% of the balance without incurring penalties, but that might just be because we're still within the fixed deal period?

Sundayjumper - Member
"Returns of 5-9% should be achievable"

After tax, with no risk ? I think we'd all be VERY interested in this

An offset will let you sit on your cash ofsetting your interest payments. A 4-9% return, before tax, would be lovely. I've got a decent investment portfolio which would squeak in at the bottom of that - just but took a lot of personal management to get there.

footflaps - Member
I could just do odd jobs for neighbours and make enough to pay the rates / utility bills

I fear I'd have to do some [i]very[/i] odd jobs to pay for mine.

Always get rid of debt if you can afford it

Depends on the terms of your mortage, we are with nationwide and we paid off a big chunk off ours and left a little bit in and let it run on. We can get the overpayment back within 3 days if needed. We can't get a loan that quick and not at such a good rate. Worth a look into it if you can do it, I think its the best of both worlds.

shares (i.e. a diversified index like the FTSE) typically return 4% over cash/bonds over the long term.

It very much depends on which long term you choose, bonds are closer than that. Management fees are invariably higher on shares so you can deduct that from the difference. Now you have to find a fund that your crystal ball says will do as well as the index. Tracker funds generally fail because when a FTSE company loses market cap it drops out of the index thus losing money for the tracker fund when they sell, they then buy the new entry at the inflated price that results from entering the FTSE.

Risk = outcome x likelihood.

There is risk with keeping money under your bed, you may get burgled. There is risk walking down the stairs..

Nothing is risk free

We paid ours off early. I had a chat with our accountant and he suggested other ways of making more money, but also said it's down to how you feel. Makes me feel good. 😀

heres a strong heads up done this . when paying off the mortgage leave just under a grand owing on say 25 a month repayment.. you ll soon get a letter from the lender saying thier letting you off the outstanding loan... never pay it off in full when they ll let you off..

For 20 years my mum had returns like that - much higher than market consistently. The investment was recommended by a very close friend (retired chief accountant of a major company). The investments were with a well known reputable company and she received yearly statements on headed paper.

Turns out it was a Ponzi scheme. Half the funds were invested by the scammer (not my mums friend) in the reputable company. The other half were "invested" in running the Ponzi scheme. The scammer worked for the reputable company and used its letterhead for the fake statements.

If it sounds too good to be true, it is.

jambalaya - Member
A word on offset mortgages, I had one and was asked to repay it in full after a year after the bank concerned decided to withdraw from the market. Check the documentation as they are not like normal long term mortgages.

Mine's just a flexible mortgage that is a standard long term mortgage that just allows you to make over payments and those go into a reserve pot which you can optionally borrow back if you need to, otherwise reduces payments or the term. But they did tell me they no longer offer the reserve pot option for new borrowers. Can still over pay, but just not borrow back.

Aside from the financial side, be careful of the pscyhological effects. I was effectively mortgage free until last summer and whilst it gives you a brilliant sense of freedom, the temptation to pack in work and downsize was almost overwhelming. I became completely demotivated and uninterested as I was always just thinking that I could walk away from it whenever I wanted. Now I have the opposite problem in that I'm up to the eyes in debt and feel trapped in an unfulfilling, but secure job but am too scared to look elsewhere in case it all goes t*ts up! Maybe pay half of it off and keep the other half liquid to give you some options in future?

Ive already paid one mortgage off and it felt great until 18months later I was saddled with another one when the wife up and left. My 2nd mortgage will be able to be paid off in May this year, Ive been overpaying for years and saved myself load in interest. I wish Id paid the maximum overpayment off, mine was £500 per month + the mortgage, as Id have even less to pay off come May.
My worthless advice is pay it off if you can 😀 I`ve swapped my mortgage for a new car with a pcp rate of 2.8% now 😀

Agree totally with dazh, feel your self becoming more confrontational with senior managers, over their decisions/ instructions, once that mortgage weight is lifted

In a strange way you do lose direction, paid ours off early.

No more debt as yet