[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

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.

I moved to Manchester, bought a large ex council house in a shitty area that was about to get new transport links and got lucky!

I should hit 50% LTV this year, just over 2 years into the mortgage from an original 90% LTV.

The motivation to overpay is strong though, being a proper muppet about this sort of things i'm on a 5 year fix at 4.7%, i needed a mortgage and a house pretty damn quickly.

They really do screw you on low LTV ratios

So, we have a small amount left on our mortgage and are unsure how to clear it. It is £28k . It is on interest only and the wife wants to save every month and twice a year bung a couple of grand at it. I know I have a bike habit and she likes shopping, so I am thinking to remortgage and pay over 8 ish years ( not decided) to guarantee money clearing !! . I have tried the Nationwide, who currently have our mortgage account to try and change to repayment. I feel from their response, it would be easier for me to ride a bike round the world in 24 hrs. They are not interested and sent me paperwork over an inch thick advising I needed now to be a new customer , even though I have never missed a payment in over 25 years , as rules have changed FFS. They are also too busy to see me in branch as I gave up with the paperwork filling in !! HSBC are my bank, they don't have anything current to swop over too, although they did about a year ago and we missed the cutoff. So, where do we go from here?
I suppose my ability at 45 to be getting rid of the mortgage was due to being a mortgage payer at 19 years old, which means houses were cheaper and the ladder was being climbed, although I didn't party for 2 years and slept on a mattress on the floor for a year until I could afford a bed and I wasn't into biking then !!

Marry well. Not sure I did but seems to be earning more than she spends so suppose I can be happy with that.
On 3rd house, I would like to move again but flippin' stamp duty puts me off.

I get a lot of people got lucky with the property market. I didn't and subsequently my mortgage is well over 200k. Im struggling to see how paying it off early is worth it tbh as the gains over the long term vs impact are marginal imo

Funnily enough we got a letter from the BS informing us the Mortgage is nearly done and the last payment due which is a small amount so think we'll wrap it up and be done with it! 🙂

And yes we were fortunate with house prices 16 years ago but we have also lived within our means and made over payments now and again which has helped.

That being said I do feel for those starting out in the last few years...

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.

The best strategy is being born in the 60s, that way you'd be buying your first house in the late 80s / early 90s before the huge increase in house prices (vs wages) took off (1996 ish).

how the hell can you pay your mortgage off early.

Luck, in my case.

First house bought in 1990 for £36k. I was 21. Sold in 1996 for £30k losing all my own money when I moved down south and bought another for £75k. Sold it in 2001 for £125k after being made redundant and taking a wild jump to the East Midlands with no job lined up.

Bought up here with a £50k deposit and a £35k mortgage, paid off in 14 years on average wage, plus wife's part time earnings since kids came along. We just prioritised clearing the debt over holidays, luxuries, childcare costs that other friends seem to spend on.

how the hell can you pay your mortgage off early.

1. Get a tracker mortgage 0.45% above base when everyone tells you not to
2. Remember when interest rates were 8% ? Get used to paying that amount & keep (over) paying it when interest rates drop
3. Go without stuff that you really don't need or want & save that money & throw regular lump sums at the mortgage on the basis that no saving can match the one you get from paying down your mortgage early

Well that's what we did.

how the hell can you pay your mortgage off early.

As above, part luck, part putting every spare £ into the mortgage.

Will be 25 this year and at the current rate we will be mortgage free at 30ish. Neither of us were born rich, but we have 2 things:

1) a super strict monthly budget that we both set out and signed up to, we always weigh up purchases as to if they are actually really needed etc. we do go on holiday, but not for 2 weeks in the sun etc. this results in every spare penny going into the mortgage. I worked out the amount we could save in interest by overpaying and that has scared me into cutting out other luxuries!

2) a small mortgage based on just the wife's salary 2 years ago when we lived apart. Now with 2 incomes we can afford to overpay to the max each year. Luckily with Halifax the overpayments can be up to 10% of the remaining loan each year.

The downside is we will only own a 2 bed flat in swindon. Thinking of moving out to the countryside into a proper house, but don't want to take on a big debt and feel like we have lost a lot of our hard work.

when ours with nationwide got down to about 1500 they just waived it.. you dont get deeds anymore nowt to show but no more monthly payments so mrs only works 3 days a week now..

we have other properties paid off and with mortgages and we just chuck money at them when we can as we did with our home.. overpaid at least double every month amd lump sums as and when.. no foreign holidays only a weeks holiday away each year in yarkshire no posh clothes or trainers just cheap frugal living.. ( cept for bikes and motorcycles and cars)

A lucky child of the sixties but made a determined effort to live within means. An offset mortgage and as much overpayment as possible, I now have just under £20k to go, and an identical amount in a parallel account offsetting it, so I pay zero interest, but have an emergency pool of cash to draw down if the wheel comes off.

a super strict monthly budget that we both set out and signed up to, we always weigh up purchases as to if they are actually really needed etc. we do go on holiday, but not for 2 weeks in the sun etc. this results in every spare penny going into the mortgage. I worked out the amount we could save in interest by overpaying and that has scared me into cutting out other luxuries!

Sounds like fun 🙂

To be honest we could have paid it off even earlier if we put 'all' the spare cash in the account but we went for the 'balanced approach' which has knocked off about 4 1/2 years of a 20yr mortgage.

First time buyer here with the missus. Mortgage taken out two years ago with a 5% deposit on fixed rate for two years on a 30 year term. 28 left if we left as is.
In the process of remortgaging with another provider. Equity in the house is that good after two years (village outside York is a mini bubble according to folk) we are able to drop it to 17 years with an affordable increase in the monthly payment.

we moved in 4 years ago with slightly over 10% deposit and made overpayments and modernisation for the last 4 years on a 25 year term - and we had got to the point where we had 25% into the house.

We then had revaluation at +60k over the previous value which dropped the LTV considerably which inturn droped the rate and the min payment - its a play on numbers the value doesnt exist but so long as it drops the interst rates

We just remortgaged and kept our payment+repayment the same with a view to finishing the mortgage early and we are on track to finish up in 12 years.. nearly 10 years early.

now i dont believe for a minute the level of payments we are putting in will be sustainable once kids arrive on the scene but im hoping that by putting in the hardwork and sacrafice now it means that my options will be open once i have kids to reduce the hours i work - if my mortgage min payment is only 300 quid a month ( even if its for the next 25 years) it will be much easier to drop back down the wage scale than if my mortgage payments were the typical 1200-2000 my peers seem to be paying as a minimum on their mortgages.

mortgage payments were the typical 1200-2000 my peers seem to be paying

Stone the crows, that's scary amounts of money to stump up each month.

I'm an old git, but our first mortgage was £125 a month for a £16,000 house. We moved 7 years later (having sold the old place for £64,000) and the new payments were £350 a month.

I guess the downside was when the mortgage ended the spare money each month was not a great deal, Still, better in my pocket that the building society's.

I struugle to see how youngsters these days can hope to get on the property ladder.

The Zanette rents and reckons she's going to wait for us to croak and then just move in. 😀

I cannot see anyway for her to buy otherwise.

scarier part is ....

i pay less on my mortgage that the equivalent rent on an equivalent property ....and have the fear of being thrown out or the rent increasing every 6 months...

rents are coming down slightly locally but its still 400 quid a month for a single room in a shared flat... an 700 for a 1 bed flat - 1200 for a 3 bed house...

Its a catch 22 really .... obviously highly area dependant !

It's the area my mortgage is in.

Yes it's scary for us oldies that were late to the party

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.

The scarier thing is that most of our friends are either on interest only, or interest plus the nominal sum. Some won't ever be mortgage free.

I didn't get on the ladder until my mid 30's, unfortunately at a highish point in the UK housing market, and i should still be able to sign it all off before i hit 60 (if i'm lucky) or 65 if we have to do any significant spending.

Though obviously, if you are up against it paying the mortgage anyway. Overpaying isn't going to work...............

Just did some sums, we [b]could[/b] pay our mortgage off in 5 years if I stopped spending money on bikes, bike bits, motorbikes, my camper van (that I never camp in), and cut general spending down to a sensible minimum.

Pretty enticing to be mortgage free at 35.... The job would get sacked off for a part time one straight away! Just think how much riding* could get done!

Like many people, I think learning to not splash out on shiny stuff needlessly can be a good thing....

In terms of managing with house prices, I would have struggled big time to buy a house without my wife. Our 2 bedroom stone house with a garden, big drive, workshop and double garage was only just worth what we paid for it (£150k) in my mind. I don't know how you lot down south cope with the cost of houses/flats. 😯

(*watching TV)

I don't know how you lot down south cope with the cost of houses/flats.

You get used to it....

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