[Closed] Paying off the Mortgage early.

I left a nominal amount in a mortgage I was paying off. That was when there was a charge to have your title deeds held securely by a solicitor. It was cheaper to leave a small mortgage and let the bank hold onto them. The bank simply recalculated my payments according to the new amount.

Check there are no early repayment penalties.

Also check to see if you can invest the money for a better rate than your mortgage (might be unlikely at the moment).

No need anymore as pretty much all lenders offer fee free re-mortgages now including mortgage free capital raising. This was not the case 10 years ago and keeping a very small balance kept the mortgage deed open to raise funds in future with less or no mortgage set up fees (valuation solicitors etc). Plus it used to mean the deeds would be kept with lender in a vault safe usually free or again small fee. Now all deeds are an image scan at Land Registry so no hard copy needed.

Also depends on how old your house is, when I paid my first house off the solicitor's kept the deeds in their care as we paid for a will with them. When I bought my 2nd house it was a newer build and didn't come with any deeds so no need to hold them anywhere.

The BS gave us the deeds a few years ago so that side of things isn't an issue, although I do need to sort out where to keep those stored safely.... 🙂

Well I never kept the mortgage going, I just wanted to get rid of it and not be tied to any debt. So I never saw any use of keeping a £1 mortgage and it's been 15 years now and it's never affected anything else.

As long as the property is registered you don't need to be too worried about where to keep the deeds because most of the key docs should be with land registry electronically. Handy to keep hold of in the very rare occasion there's some sort of conveyancing issue.

Also check to see if you can invest the money for a better rate than your mortgage (might be unlikely at the moment).

We're in the same position as the op and I can't find a 100% secure way to make more money per month than the mortgage costs. If we have 4 santander 123 accounts we just about break even on £80k so I'd rather get the whole mortgage paid rather than keep £80k in the bank.

Yep. Interest rates for folk who actually want to save some money for their future are shockingly low. Still, it encourages folk to spend and that's got to be good for "the economy", right?

I'm planning on being in the same position as granny & Gary in 1-2 years time. Currently putting all spare cash into the mortgage as it definitely seems the best, safest place for it over a short-ish period of time.

Paid ours off last year - amazing feeling of relief, especially now I seem to be ****ing up the rest of my life, but at least we have a roof over our heads.

That said, the roof, and various other aspects could really do with a few improvements/repairs etc, so maybe we should have extended the mortgage while rates were low and we could afford it to get these bits and pieces done.

(It was a low monthly payement/tiny mortgage anyway, so the actual amount we had extra doesn't look great compared to the cost of new kitchen etc....)

Paid off our mortgage last year, didn't even occur to us to keep a small one going, just didn't want to pay one more day of interest. As moredashthancash has said it was an amazing feeling of relief, like a massive weight had been lifted from our shoulders.

The only reasons it would be worth keeping open (with a nominal amount) is if 1. there was an early redemption charge 2. you think you will need to borrow a large chunk of cash in the near future.

I have a flexible offset tracker mortgage and choose to keep it as might want to access a chunk of cash at some point and no need not to keep it - the fact I have this debt doesn't bother me at all.

Could potentially pay ours off but we've decided to invest the money elsewhere as the returns are far greater and it'll hopefully allow us a bit of flexibility later. If we are talking a few hundred then I'd just clear it. Be nice to have it out the way.

Details please, of where returns are far greater, after tax, with no risk.

Details please, of where returns are far greater, after tax, [b][i]with no risk.[/b][/i]

He didn't say no risk though did he. Over a significant time period it is likely that the return in the stock market will outperform a current mortgage.

Details please, of where returns are far greater, after tax, with no risk.

My mortgage has 12 years left on it and my monthly repayment is 98 pence. That's right, for less than a quid a month I have instant access to £72,000 at base rate plus .75%. I also don't have to pay a £300 redemption fee and they look after the deeds.

Paid ours off years ago

Got some paperwork the deeds from the BS never heard from them since.

Our BTLs are returning around 8% not including growth so should be well over 10% after tax all in

Including capital gains tax when you sell?

I don't want the cash tied up long term so for me paying the full amount off is the best option.

Including capital gains tax when you sell?

I don't want the cash tied up long term so for me paying the full amount off is the best option.

FTSE's dropped so much, may well start using my mortgage to put more money in but not sure on timing yet.

I'd rather buy property than pay off the mortgage.

I already have a couple of rental properties so it's not an option I'd look at.

I just paid mine off asap and am now paying into SIPPs and ISAs instead.

[quote="gonefishin"]He didn't say no risk though did he.
He said "returns [b]are[/b] far greater". That's a pretty definite statement, as opposed to a more accurate "returns [b]could be[/b] far greater" 😉

I have BTLs too, 8% sounds about right, but I pay a marginal tax rate of 45% on the income and with the risk of sudden maintenance bills knocking a % or two off that return in any year it's debatable whether it's "far" better than the 2.5% mortgage I'm currently paying on my own house. There's a bit of capital appreciation, sure, but legal fees & capital gains will take a decent chunk of that when you sell. And until you sell it's just a paper profit anyway. There's your risk.

Anyway, my point is that unless there's zero risk then saying you can get much better returns somewhere else is a case of apples and oranges. Why pay off the mortgage ? You can get [b]far[/b] better returns by going down the casino and putting it all on red ! :p

He said "returns are far greater". That's a pretty definite statement

Its actually interesting to me to hear dissenting voices as I've no idea really if I'm doing the right thing so its good have a few opinions and options to mull over.

We (the missus) cleared ours a few years ago. Our solicitor kept hold of the deeds for a fee (£10?).

We have since moved and paying off the mortgage is not not likely to happen for a long, long time

Our solicitor kept hold of the deeds for a fee (£10?)

You don't need to worry about deeds anymore, they no longer count for anything. Ownership is determined by the central record, not who owns the deeds.

Yep. Interest rates for folk who actually want to save some money for their future are shockingly low. Still, it encourages folk to spend and that's got to be good for "the economy", right?

Government doesn't want people to save for the future because that's someone else's problem. Lifetime Allowance etc which the average worker saving into a pension from 21 can hit.

Some good points cheers.
@Matt, how did you manage to arrange that low amount each month?
Funnily enough I don't feel a sense of huge relief that we could finish the mortgage soon,seems a strange situation to be in as we're just used to the same amount coming out of the bank each month.

We do need to spend some money on the house, new kitchen and maybe boiler sooner rather than later hence the thought of keeping the mortgage ticking over as Matt has done so we have easy access to more money if the reserve fund dries up.

Reckon our mortgage should be done somewhere between June and October this year depending on how carried away we get on decorating, etc. around the house in the next few months.

I'm going to go for just getting shot of the whole thing, I already feel a sense of relief being close to paying it off. Once it's actually done, I'll be grinning from ear to ear, especially as it will be 23 years ahead of what apparently is the average age Britons become dept free.

This page is for the 1%, I see

This page is for the 1%, I see

The 1% bought a £m house with cash...

The rest of us were just born when houses were a lot cheaper.....

We (I) paid ours off a couple of years ago. 'tis a great feeling even now.

The Halifax sent us the deeds. As has been mentioned they're not really important any more. They were useful when a neighbour was telling us the the rather ropey fence was our responsibilty. I knew it wasn't but he insisted on arguing. I said "hold on a mo", popped into the house and came back out with the deeds, which clearly showed it was his fence.

The look on his face was priceless. Good to his word, he put up a new fence.

"I'll be grinning from ear to ear, especially as it will be 23 years ahead of what apparently is the average age Britons become dept free."

is that the same as the average age britons die ?

Probably. I'm not planning on dropping dead this year either!

It's ok to hate most of the people on this thread right?

That's fine, if it makes you feel better.

I hate most of them too, fwiw.

It's ok to hate most of the people on this thread right?

Crack on, hate won't pay your mortgage off though 🙂

So apart from hard work, being born into money or having a well paid job how the hell can you pay your mortgage off early.

(tbh im interested in this. One chap I used to work with ate nothing but sandwiches for every meal for 5 years and paid his off. It was substantially less than mine is now however)

[quote=andybrad ]So apart from hard work, being born into money or having a well paid job how the hell can you pay your mortgage off early.Reduce your other outgoings. Invest wisely. Don't keep "upgrading" your house every time you think your current one is worth a bit more than your current mortgage.

So apart from hard work, being born into money or having a well paid job how the hell can you pay your mortgage off early.

Don't drink, buy Apple products or go on holiday.

Seriously, you just need to analyse your spending and see where your money goes. Then overpay as much as allowed.

Bought our original house and insisted on a repayment mortgage rather than endowment which we were pressured to do.

When we moved 14 years ago, we didn't go silly and over extend ourselves. Yes, the mortgage went up a bit, but we also kept the outstanding term the same.

we also did the whole 'rate tart' thing looking for the best deal every few years. We got a better deal and then reduced the years left a bit rather than reducing payments.

Add into that a few over payments and bingo, the mortgage starts to diminish.

Yes we could live in a bigger house and have a bigger mortgage to pay off for years to come, but we decided we had enough space and we liked where we are. I'd rather be debt free rather than keep moving to bigger houses