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

Very surprised at the amount of people who are mortgage free or close to finishing, my wife explained it with the statement that most on STW are sad loners who live with their parents and by default it’s their parents who paid the mortgage off

To save for my deposit I lived with my parents till 27 and had a very frugal life, putting nearly all my take home into a savings account.

mtbmaff – Member
my wife explained it with the statement that most on STW are sad loners who live with their parents and by default it’s their parents who paid the mortgage off

does she taste of lemon when you kiss her?

I should be clear at 58, I’m only 2 years into a 25 year loan for £157k. However, since the original loan agreement I’ve had a couple of pay bumps, maybe it is time to stop enjoying those and making some over payments.

As to why did I buy, I watched my parents rent for too long, then decide to buy right at the peak of the market, it was a disaster. I decided to buy earlier than they did and to buy a house I don’t need to upgrade from for a long time. It may not have been the decision that everyone would have made, but I am free to make my own choices.

“Why do people buy houses?”

1. CGT free investment
2. substantial gearing from a 20-25% deposit
3. You can live in (plus keep secure & improve the investment property).

Have I missed any?

I am not so confident buying is the way to go these days, unstable housing market and especially the lack of job security make it a risk.

I am not so confident buying is the way to go these days, unstable housing market and especially the lack of job security make it a risk.

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

About 3 years ago, and at 35 quite happy about that. In a reasonable 3 bedroom detached house with decent value.

I’d like to say it was as a result of my careful financial planning and hard work, but it wasn’t. Somehow the girlfriend managed to pull it off, and i’ll ever ever complain. No mortgage, no car finance, no debts at all, beautiful.

Not sure, perhaps never. If we downsized we could buy a house outright but I am positive on property values which are still increasing in/around London.

Even if I do pay off my mortgage I intend to take out another in later life as there is no point owning a property valued over £350k (or what ever the inheritance tax threashold is) without a mortgage as the tax man will take his cut. This is based upon me living in the UK which I may well not do, the best IHT planning is probably to live elsewhere.

crotchrocket – Member
“Why do people buy houses?”

1. CGT free investment
2. substantial gearing from a 20-25% deposit
3. You can live in (plus keep secure & improve the investment property).

Have I missed any?

Security – A land lord cannot just hand you your notice and ask you to move out.

Freedom to modify the house. Yes you can paint and decorate a rented house but you can’t knock down walls, build extensions and do other serious mods.

Able to look after the house yourself – no need to wait for someone else to fix something. Can do it how you want rather than the cheapest possible bodge.

Basically control of your own space – there are some big downfalls too. It was nice to phone up the landlord a few winters ago and tell hime “you should send someone round to have alook at the gutters, the snows bought them all down.” Less fun when it was my own house and responsibiity.

11 years time – at 49. But my tenants pay it anyway… 8)

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.

Yes – from parents 🙁

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.
Don’t be – it happens to us all. At least they had something to give us.

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.