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To pay off or not to pay off- that is the question

I flew home to wonderful NI last week specifically to pay off the mortgage. Working here in PRC has afforded me that luxury quite quickly. It was a bit of a faff trying to persuade my bank and mortgage company that the cas was legit earnings/savings but it is done.
It's a relief for sure and now I have new targets ....Kitchen and bathroom and some outside works over the next three years.

Like I say it's a relief though no fireworks and I guess I'll really start to notice in a few months as I realise I'm a little better off each month.

In other news I managed to fall for a rather elaborate scam whilst flying back to PRC involving fake Scandinavian Airlines customer services and I am now almost £4000 lighter from one of my bank accounts! Bastids!
 
we paid off our mortgage a few months ago as part of a journey towards my retirement. Incredibly liberating. We had no early redemption penalties.

Interestingly despite expecting queries from my bank, moving 5 figure sums of money around never attracted a single question as to its origin.
 
James said:
Paying off the mortgage in full makes you £1,000 a month richer by way of disposable income, plus the unbeatable sense of liberation from the shackles of debt.
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Indeed it does. Most people, particularly high rate taxpayers, will struggle to a beat a guaranteed after tax return greater than their mortgage rate. Of course, you can achieve all that with an offset mortgage and maintain instant access to the funds should you require.

You could pay the grand a month saved on the mortgage into a pension and receive further tax relief, or work a grand a month after tax less. For a higher rate tax payer, that pushing £25K a year less graft to put in.
 
Mortgage paid off five years ago now for me, it really is a lovely feeling.

Not always the best option for everyone but it certainly was for me.
 
Surprised to see so many emotional responses here. To me it's a simple question: all things considered, would the interest on the cash be more or less than the cost of servicing the loan? Where does the extra peace of mind come from when you know you have the means to pay off the loan any time you please?
 
1] this 100k mortgage potentially needs life insurance to cover which as you get older becomes very hard and expensive to get . so thats an extra cost
2] if you die your family will have to pay off the debt and that 100k windfall will be stuck for months in probate potentially leaving them a real burden
3] in 3 years the interest rate will probably quadruple [ if its a cheap deal now ] so thats a real worry and stress

so pay it off for all those reasons
 
kensalriser said:
Surprised to see so many emotional responses here. To me it's a simple question: all things considered, would the interest on the cash be more or less than the cost of servicing the loan? Where does the extra peace of mind come from when you know you have the means to pay off the loan any time you please?
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Your response is logical but emotional responses on a music forum shouldn’t surprise (Mr Spock 😂)

Felt quite proud when we paid off our mortgage and it is good to know for certain how much we can afford to help out our daughters from our remainIng funds.
 
I’ve been in a similar situation and had 105k left on the mortgage when I took redundancy and went into early retirement. I could have paid a large chunk of my mortgage off or invested but spent most of it on my hifi/holiday. Silly me as I had an offset mortgage and the payments went up and up with the interest rate hikes, It’s been a tad uncomfortable. Luckily the stock market has been kind so now I’m paying a chunk off and will downsize. However, no regrets and have a dream system with tons of music but if I had a chance to do it again then maybe paying the mortgage off would have been wiser.
 
Ponty said:
Of course, you can achieve all that with an offset mortgage and maintain instant access to the funds should you require.
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[Pedant mode on] A mortgage refers to the lien a lender has over the title of real estate property, as security for the lending. Paying off the loan does not mean one is mortgage free. The bank still has security over your title until the mortgage is discharged. [Pedant mode off]

Whilst I no longer have any loans, my bank still has a mortgage on my property. I did not want to pay a lawyer for the conveyancing work or the bank their discharge fee. I'd need do that only when selling my home. The upside is, I can easily get a new loan to buy another property or car without needing a lawyer. I see no downside other than the existence of the bank's interest in a title search.
 
I don't know enough about this kind of thing (that is what a good financial adviser is for), but I paid off my mortgage in 2015 and have not regretted it.
 
Paid mine off in my early 30's and never borrowed again!

Obviously I haven't gone on to live in an enormous detached mansion but......

It's incredibly liberating and gives you total freedom to take risks such as setting up your own business (which in fairness I'd already done anyway) or more importantly once you've saved up a bit more you have the flexibility to tell any future employer of customer to "stick it where the sun doesn't shine" if they start treating you like sh1te.

I'd suggest that the option of an offset would be very appealing (they didn't exist when I paid mine off). Obviously you could re-mortgage again in the future but that requires you to have borrowing power when you need it, whereas the offset effectively guarantees availability of finance.
 
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