To mortgage or not to mortgage?

[Darr3nG]

1 hour ago, GoldDiggerDave said:

They have to go to work,  I have a choice if I want to work.  

Goes back to what you proposed as the most valuable asset... Time.

[Roy]

Good topic!

Not over paying on your mortgage and using free cash for investment, can be a good way to make money, but it is gambling.

'Your investment may go up or down'

I like Dave's comment that he'd never gamble with the roof over his head. 

Add a wife and children to that, and the risk becomes intolerable.

Get it paid off Darren. You've plenty of time to get rich (er) 😊

[GoldDiggerDave]

@Darr3nG pay the mortgage off, and then continue to pay yourself the mortgage payment every month, you go from -£1,200 per month (or whatever it is) to +£1,200. 2.4k swing every month is massive for your quality of life! 
 

 

Edited September 26 by GoldDiggerDave

[Gruff]

Overpayments are a great way of saving yourself from giving the bank any more interest that what they can steal from you.

I can provide a spreadsheet that shows how much you can save with over payments.
In the 11 months we've had a mortgage, we've over paid monthly and it's reduced the mortgage term by an additional 29 months, will be over 30 months in October as we come to the full year of paying. That means in a year, we've reduced the term from the initial 25, down to 24, but then down to 21 years and 5 months (2 years and 7 months saved and that is all interest saved as well, based on that, we've saved just under 10% of the original mortgage principle value in interest to the bank)

[GoldDiggerDave]

@Gruff you are gonna see me say something that I would not normally say...." Inflation can be your friend"  when it comes to long term commitments like mortgages.  Start of in year 1 earning 35k for sake of argument,  by year 10 your wages are likely to to be 50k+ and so on, your increasing income can  inflate your debt away providing you don't borrow more.  

started my mortgage in 1999 by 2009  my wages were 3.5-4x more and ploughed all of my extra income back into the mortgage, its very easy when you earn more just to spend more and in real terms you are not better off earning more.  

 

 

 

 

 

[GoldDiggerDave]

3 hours ago, MancunianStacker said:

I like to have a safety net I can access, so I save in gold (cash too easy to spend). Then once my gold stack value equals my mortgage, I will likely pay that off and continue stacking but using my old mortgage repayment amount on top of my gold savings amount to buy gold again, re-starting the stack. Then target the BTL mortgage with the same idea, unless I decide to sell those.

Governments keep changing the rules on everything from Pensions to ISAs and maybe even the state pension will be means tested when I get there.

A gold stack is invisible really. 👍🏻 

100% theres so many unknowns, are we gonna get shafted with the pension age will we even get one?    If it goes pear shaped my plan is to either sell up or rent it out and then just buy a small holiday type home where I can live out my life forever off the rent or the sale of the house.  

 

[Gruff]

24 minutes ago, GoldDiggerDave said:

@Gruff you are gonna see me say something that I would not normally say...." Inflation can be your friend"  when it comes to long term commitments like mortgages.  Start of in year 1 earning 35k for sake of argument,  by year 10 your wages are likely to to be 50k+ and so on, your increasing income can  inflate your debt away providing you don't borrow more.  

started my mortgage in 1999 by 2009  my wages were 3.5-4x more and ploughed all of my extra income back into the mortgage, its very easy when you earn more just to spend more and in real terms you are not better off earning more.  

 

 

 

 

 

I 100% get that and understand that. My plan is to over pay as much as possible in the fixed 5yrs we have to then reduce it down the most. Interest rates wouldn't cover the increase costs. I'm on 4.06%.
Based on the savings, I'd need to have about 20% plus growth on the savings to offset the savings on the interest on the mortgage. I'd need to to be that high as I'm a higher rate tax payer, so would get caned the additional tax on interest.

[Darr3nG]

I know I started the thread as a question, but it was more to open the conversation away from the Gold Monitoring Thread.

I've committed to paying this off, just interested in hearing alternative views.

 

53 minutes ago, Gruff said:

I can provide a spreadsheet that shows how much you can save with over payments.

First thing I did, and I'm now using it to track progress against.

Currently overpaying +10% every month without any penalty. Mortgage is up for renewal, August next year and I plan to have the balance, ready to pay.

According to my spreadsheet, I'm actually 3 months ahead of target

 

[Gruff]

3 minutes ago, Darr3nG said:

I know I started the thread as a question, but it was more to open the conversation away from the Gold Monitoring Thread.

I've committed to paying this off, just interested in hearing alternative views.

 

First thing I did, and I'm now using it to track progress against.

Currently overpaying +10% every month without any penalty. Mortgage is up for renewal, August next year and I plan to have the balance, ready to pay.

According to my spreadsheet, I'm actually 3 months ahead of target

 

Excellent stuff! I'm hoping that I can get a decent payrise to then get to the point over the next 4 years of over-paying the 10% I can without penalty. With the hope that I can then get some modest increases there after and put those into a savings account of some sort. Then at renewal time, make a decent payment and reduce it down further, reduce the interest rate if I can and then the term. Aim to see if I can then pay it off under 10 years. 

[ArgentSmith]

Sometimes overlooked, money earn't through work, investment, whatever is taxable, money "saved" is not. For many tax payers a £1k mortgage payment is really £1.6k (gross), and how much of that is paying down the debt?. That money would better go in a sipp or some other tax advantaged scheme.

A penny saved is 1.6p earned.

PS Only buy Bitcoin with money you can't afford to lose.

[Darr3nG]

12 minutes ago, ArgentSmith said:

Bitcoin

What's that?  

[ArgentSmith]

1 hour ago, Darr3nG said:

What's that?  

New fangled magic internet money backed by nothing, it’s a scam 😀

[27carrots]

14 hours ago, Darr3nG said:

mortgage company refused to accept payment in the interim

How do they get to do that? Is that to sometimes force a repossession when the new home owner can easily afford to make the payments? Sounds crooked as hell to me.

[Roy]

2 hours ago, 27carrots said:

How do they get to do that? Is that to sometimes force a repossession when the new home owner can easily afford to make the payments? Sounds crooked as hell to me.

They are not your friend. 

it's best to part company as soon as possible.

[GoldDiggerDave]

Anyone who can conformably pay a mortgage, hold PM's and other investments and over pay has to be in the top 10% if not higher of the wealthiest people in this country.  

Theres millions of mortgage payers today would not be able to pay  their next months payment if they lost their job and   millions more if they had no income for 3 months.  The precariousness of many people is frightening,   I could not live like this, this is one of the reasons I never moved up the property market while I had a mortgage, as I would not be able to sleep at night. 

 

 

[Gruff]

15 minutes ago, GoldDiggerDave said:

Anyone who can conformably pay a mortgage, hold PM's and other investments and over pay has to be in the top 10% if not higher of the wealthiest people in this country.  

Theres millions of mortgage payers today would not be able to pay  their next months payment if they lost their job and   millions more if they had no income for 3 months.  The precariousness of many people is frightening,   I could not live like this, this is one of the reasons I never moved up the property market while I had a mortgage, as I would not be able to sleep at night. 

 

 

100% agree, I've got enough of a cushion to see me through a while if I were to lose my job. But I'm not taking that for granted. Hence the desire to pay off the mortgage as soon as. Once that's gone, monthly living expenses will be relatively cheap. So then the risk of not earning for a few months is then no where near as stressful

[treetop1280]

14 minutes ago, GoldDiggerDave said:

Anyone who can conformably pay a mortgage, hold PM's and other investments and over pay has to be in the top 10% if not higher of the wealthiest people in this country.  

Theres millions of mortgage payers today would not be able to pay  their next months payment if they lost their job and   millions more if they had no income for 3 months.  The precariousness of many people is frightening,   I could not live like this, this is one of the reasons I never moved up the property market while I had a mortgage, as I would not be able to sleep at night. 

 

 

Exactly , @GoldDiggerDave“ and the truth will out “  pay them off as fast as you can , “ there real goal  is to let you pay for 20 years , hope you lose your job , then steal it from you after 3 months,  f kin parasites they truly are 👎

[treetop1280]

5 minutes ago, Gruff said:

100% agree, I've got enough of a cushion to see me through a while if I were to lose my job. But I'm not taking that for granted. Hence the desire to pay off the mortgage as soon as. Once that's gone, monthly living expenses will be relatively cheap. So then the risk of not earning for a few months is then no where near as stressful

Even @Gruff has it worked out , and he grew up in a tribe in some swamp in South Africa , WINNER 👍

[GoldDiggerDave]

1 minute ago, treetop1280 said:

Exactly , @GoldDiggerDave“ and the truth will out “  pay them off as fast as you can , “ there real goal  is to let you pay for 20 years , hope you lose your job , then steal it from you after 3 months,  f kin parasites they truly are 👎

No wonder they are pushing 35 year mortgages over 25.  on a typical 300k average-ish mortgage over 35 years,  20 years in of paying £1,600 per month £384,000 in total   they still owe 190k out of the 300k they borrowed.   

I'll say that again

year 20 paid £384,000   still  owe £190,000   on the initial 300k (if rates remained constant)   what a one sided deal for the bank.  year 35 total repaid £596,000!!!!!!!!!!!!!

 

 

 

 

[treetop1280]

4 minutes ago, GoldDiggerDave said:

No wonder they are pushing 35 year mortgages over 25.  on a typical 300k average-ish mortgage over 35 years,  20 years in of paying £1,600 per month £384,000 in total   they still owe 190k out of the 300k they borrowed.   

I'll say that again

year 20 paid £384,000   still  owe £190,000   on the initial 300k (if rates remained constant)   what a one sided deal for the bank.  year 35 total repaid £596,000!!!!!!!!!!!!!

 

 

 

 

Even the biggest gamblers in the world would not take that bet , in Dublin they are offering 50 year mortgages , WTF 👎

[Gruff]

5 minutes ago, GoldDiggerDave said:

No wonder they are pushing 35 year mortgages over 25.  on a typical 300k average-ish mortgage over 35 years,  20 years in of paying £1,600 per month £384,000 in total   they still owe 190k out of the 300k they borrowed.   

I'll say that again

year 20 paid £384,000   still  owe £190,000   on the initial 300k (if rates remained constant)   what a one sided deal for the bank.  year 35 total repaid £596,000!!!!!!!!!!!!!

 

 

 

 

Our 5yr fixed is 4.06% over 25 years, if it remained constant at that, the bank would get a smidge more than 100% the value of the mortgage in interest. This is why you over pay. I've already prevented them from getting about 10% of that because of the way the interest compounds over that period.
I have a fixed amount I overpay each month as a minimum and then any Premium Bond winnings get stuck in as well

1 minute ago, treetop1280 said:

Even the biggest gamblers in the world would not take that bet , in Dublin they are offering 50 year mortgages , WTF 👎

Holy smokes! That is the eternal debt cycle and hope you default on it.

[GoldDiggerDave]

Just now, treetop1280 said:

Even the biggest gamblers in the world would not take that bet , in Dublin they are offering 50 year mortgages , WTF 👎

50 years might as well be a 500 year mortgage.     Anything to keep working people to death with the promise of a pot of gold at the end, it's very effective at keeping people turning up to work on a Monday morning.  

Taking mortgages over decades longer barely makes any meaningful difference in the monthly repayments.  Once they go over 30 years the repayments start to level out and people are just paying 98-99% interest every month. 

300k over 25 years = £1660   

300k over 35  years =£1420

300k over 40 year = £1350

300k over 50 years = £1250  

300k over 75 years =£ 1165

300k over 100 years =£1140

300k over 200 years =£1125

300k over 500 years =£1125 per month 

 

 

 

 

 

 

 

 

[Darr3nG]

5 hours ago, 27carrots said:

How do they get to do that?

They would only accept payment from the name on the mortgage, or executor - some anti money laundering BS. Their bereavements dept. claimed to put a freeze on the account, but conveniently forgot to tell us this would still incur a charge (with interest).

Everything about them is sleazy and I can't wait to be done! 

[ZRPMs]

I paid one of the mortgages off with the funds from my business account to the mortgage company that was a subsidiary of my bank. I did it whilst in my bank with their assistance. I had pre told the mortgage company that I had intended to settle the mortgage. The amount was just under £35k. The mortgage company weren't that happy about it they tried to get me to sign up to a deal. The bank tried to tell me it wasn't a good idea to pay it all of whilst trying to get me to put the funds in accounts that paid less that the mortgage interest. Ran me through all sorts of Money laundering checks for the funds and then tried to spin it that the mortgage company might not be genuine. Finally conceded and made the payment but had to do it as a Telegraphic transfer that of course incurs a fee to the bank. Took hour and a half possibly two. And this was for one of their own companies. It then took about two months for them to release the charge on the property. However that could have been Land Registry.  

[Darr3nG]

3 minutes ago, ZRPMs said:

had to do it as a Telegraphic transfer that of course incurs a fee to the bank

I've been trying the figure this bit out... when I come to make the final payment, how do I do it?