Becoming mortgage-free has been the BEST financial decision that we've ever made personally partly because of the alternative life that it has created. Nothing compares to it and it's hard to articulate it properly. Where do you stand? Comment below 😀
I am struggling with it - mortgage is only 1.49% but it is not our forever home. Focusing more on investing in index funds £500 pcm but still can’t resist overpaying the mortgage by £100 pcm. Having no other debt does really help. Thanks for the vid Sue 😀😀😀
I did not pay off my mortgage as I was concerned I would not be motivated and focused in further investment. I really wanted to be mortgage free as it’s priceless however I recognised it was not the best long term investment decision. Instead I used my cash to buy an investment property. I did not believe in the future I would have a notable cash sum saved up as a big down payment (30%) to buy a second property so it was a unique opportunity. I occasional overpay the mortgage on my main home without penalty and still aim to pay it off early. My decision to use my cash for other investment has helped me expand my portfolio and helped me work harder to invest in equity and my pension as part of the journey of greater diversification.
This is really useful. I extended my mortgage term to reduce my outgoings since it was not my permanent home. The extra £200/month is now being invested and the return is 25% while my mortgage rate is 1.4%.
Good video. One aspect that wasn't considered was the rate of inflation. The way I see it, inflation erodes debt. If you take a £300k mortgage and say have £200k outstanding after 10 years of payments you might think that's a lot left. But £200k today is not the same as £200k in 10 years where it is essentially less debt due to inflation. I'm not mentioning this to talk anyone out of overpaying. I think the video made a really interesting point about the mental side and freedom. I'm just saying it's that it should be considered, since most people will pay off a mortgage over a long enough period that inflation is a factor. If hyper inflation occurred as well then the equation definitely changes.
Really enjoying your videos. I'm looking at passive income at the moment. I'm a foster carer. The children I cared for have moved on so looking for something that doesn't take me away from children we have next. It's been a really difficult time at the moment for a few personal reasons but your videos are giving me hope. Wishing you all the success.
I just released a video on basically exactly that! Not paying off your mortgage! I’m on the investment side of the fence! So many good points here. Nice one Ken. 😀
I don't fully understand point 2. Why not pay off the mortgage and then move? As long as you're buying a home off a lesser or equal value? I don't understand what would be wrong with that? Can you explain please?
I'm paying off my mortgage but have already been thinking about lowering my extra payments and put more into my ISA. The % example of comparing mortgage rate and investment return was really useful to give a perspective on this decision, so THANKS!
I’m not in my ‘forever home’ but still I am making overpayments to repay my current property early. The way I see it is when I sell my property and buy my forever home, I will be transferring the equity, so essentially paying off my forever home earlier. Thoughts?
I've been overpaying my mortgage with a relatively small amount and it allowed me to take out a bigger mortgage for a higher value home I wouldn't be able to afford otherwise. The sale still hadn't gone through but at least the mortgage wasn't a problem.
I was lucky to get one of the older fully flexible mortgages with a low rate, borrow back features, portable etc. I’ve cleared it all down to the minimum amount possible, therefore paying the lowest payment. This gives me the freedom to have funds for, moving house if I choose to, low loan rate eg home improvements, I have no need to pay the admin fee for closing the loan. However more importantly the bank is looking after the title deeds safely which in itself can add up to quite a bit!!! I know I could drawdown the loan and invest and probably get a higher return but I prefer not to have debt & payments to deal with. Besides I now salary sacrifice the highest % I can go to and therefore put the most I can per month into my pension. This means I pay less income tax and my employer gives me 1/2 the national insurance saved as an additional benefit to my pension giving even more free money! I calculate just under 34% of my salary (inc company contributions) now goes towards my future and the net difference is surprisingly low and in reality I’ve got used to living with a lower net income. Gotta play the system!!
I love your videos Ken, but this is so far from my reality. My husband and I have not been money wise AT ALL over the years. Focused on lifestyle. Now 38 with three children, renting a house, paying off loan debt. Anyway, inspired by a few things, including your videos, I’m overpaying my loan and trimming my life style as much as possible. I feel like it’s gotta be without my children feeling the pinch though, as it’s not their fault I didn’t screw my head on earlier. It’s not great, I know, but I have to start somewhere 🤷♀️ If we can save enough for a house deposit, then that’s a start. Problem is prices of the size home we’d need now are obviously huge, and would stretch us A LOT! Am I still right to aim to be a homeowner do you think?
I love your reflection. Thank you for sharing honestly. Yes to home ownership (if you can). It's a great base for building more wealth. Stay encouraged though. You're not too late at 38 😊. Now you need a strong vision and actually sticking with it.
Mortgage overpayment; such a debate with so many other modes of investment available now, which were non existent years ago! I don’t have enough capacity to follow and keep up to date with stocks and crypto, so I may be best to overpay with my 10% allowance, over saving it in my bank account, but would be interested to know your thoughts and others perspectives, as always open to new ways of thinking!??
Great video mate. So many FI RUclipsrs obsess about paying the mortgage off. Me, I will only pay the mortgage off when the lender will not extend the term any longer. So long as interest rates remain so low, I’m happy buying more property rather than pay off my mortgage. If you ‘feel’ better with no mortgage, then all the logic and maths in the world won’t convince you otherwise. Emotions will trump logic every time
Thanks for watching, Man! 😀. I definitely hear you on buying more property. It makes sense for you and some other people but it won't for most people. There is definitely a case for paying off the mortgage and this will suit many people for reasons beyond the feeling of paying it off. Especially if they can pay if off quickly and early on their wealth building journey. I can see the optionality that this has created for us and can't place any value on that. Even the ability to take more risks is something that I didn't touch on. There is so much capacity to be more successful at other areas because there is no worry about not being able to pay the mortgage. That list carries on. But this is an individual thing as everyone who has watched this video so far and those still to watch it are all very individual with individual problems, net worths and opportunity sets. Hence, it's important to see all paths as valid depending on people's current circumstances and future goals and life expectations.
What about if the early repayment charge is less than the interest for a year? APR at 1.75% and early repayment charge of 1% - doesn't it make sense to pay it off?
@@exerciseisantidote9337 I believe a lot of them are only repayment fees when you're tied into your term, once you're not on your on the base variable rate, you tend to be able to pay off as much as you like.
Thanks Ken this is very informative, I am personally paying off my mortgage and also investing, this will give me extra resources to wipe out my mortgage should I wish. Thanks for sharing knowledge.
Hi, im thinking about paying off the mortgage early but also this may not be our forever home. Off topic..but can anyone advise on what to do if when i come to remortgage in 2 years my partner and I maybe down to one income due to maternity leave or i may just quit working to raise children. Is it hard to remortgage based on one income? Im already worrying about the future :/ thank you in advance
Bank mortgage lending is entirely based off your income at time of application ( last 3 months payslips) so it would only be an issue as such if you are looking to change provider and borrow more than bank would lend on that sole income. Use 4/5 times gross salary as rough guide for amount you can borrow.
You can pay off your mortgage early. We did. But there are circumstances where it MIGHT serve you better to invest elsewhere. Or to payoff mortgage and invest elsewhere at the same time. That's what this video is trying to highlight.
Becoming mortgage-free has been the BEST financial decision that we've ever made personally partly because of the alternative life that it has created. Nothing compares to it and it's hard to articulate it properly. Where do you stand? Comment below 😀
We're working on paying off our mortgage early too even if this isn't our forever home we can make it rental property when we're ready to move on.
I’ve been doing the math and researching. Got a few other things to take care of first. We have 18.8yrs left but want to cut that down quite a bit.
I am struggling with it - mortgage is only 1.49% but it is not our forever home. Focusing more on investing in index funds £500 pcm but still can’t resist overpaying the mortgage by £100 pcm. Having no other debt does really help. Thanks for the vid Sue 😀😀😀
I did not pay off my mortgage as I was concerned I would not be motivated and focused in further investment. I really wanted to be mortgage free as it’s priceless however I recognised it was not the best long term investment decision. Instead I used my cash to buy an investment property. I did not believe in the future I would have a notable cash sum saved up as a big down payment (30%) to buy a second property so it was a unique opportunity.
I occasional overpay the mortgage on my main home without penalty and still aim to pay it off early. My decision to use my cash for other investment has helped me expand my portfolio and helped me work harder to invest in equity and my pension as part of the journey of greater diversification.
This is really useful. I extended my mortgage term to reduce my outgoings since it was not my permanent home. The extra £200/month is now being invested and the return is 25% while my mortgage rate is 1.4%.
Good move, Marie 😉
Thanks for the video. I am on the side of paying off my mortgage early.
Hi Haneen, we're on your side. It has been the best decision that we've ever made financially.
Really enjoyed the sensible advice provided here. Definitely taking it on board!
Much appreciated, Yinka! Please share with others 😀
You definitely know your stuff Ken, this was excellent
Thank you! 👊🏾
Good video. One aspect that wasn't considered was the rate of inflation. The way I see it, inflation erodes debt. If you take a £300k mortgage and say have £200k outstanding after 10 years of payments you might think that's a lot left. But £200k today is not the same as £200k in 10 years where it is essentially less debt due to inflation.
I'm not mentioning this to talk anyone out of overpaying. I think the video made a really interesting point about the mental side and freedom. I'm just saying it's that it should be considered, since most people will pay off a mortgage over a long enough period that inflation is a factor.
If hyper inflation occurred as well then the equation definitely changes.
Really enjoying your videos. I'm looking at passive income at the moment. I'm a foster carer. The children I cared for have moved on so looking for something that doesn't take me away from children we have next. It's been a really difficult time at the moment for a few personal reasons but your videos are giving me hope. Wishing you all the success.
I just released a video on basically exactly that! Not paying off your mortgage! I’m on the investment side of the fence!
So many good points here. Nice one Ken. 😀
@@TheHumblePenny following your advice for creating multiple income streams!
I don't fully understand point 2. Why not pay off the mortgage and then move? As long as you're buying a home off a lesser or equal value? I don't understand what would be wrong with that? Can you explain please?
Great topic Ken. Congrats on your ever growing subs.👏🏾👏🏾
I simply love these videos around mortgages. I’m was over paying standard 10% every year. Now I think it’s best I put it into the isa! Cheers Ken.👍🏾
I'm paying off my mortgage but have already been thinking about lowering my extra payments and put more into my ISA. The % example of comparing mortgage rate and investment return was really useful to give a perspective on this decision, so THANKS!
I’m not in my ‘forever home’ but still I am making overpayments to repay my current property early.
The way I see it is when I sell my property and buy my forever home, I will be transferring the equity, so essentially paying off my forever home earlier. Thoughts?
This works! Provided you're happy with and able to free up that equity through a sale.
I've been overpaying my mortgage with a relatively small amount and it allowed me to take out a bigger mortgage for a higher value home I wouldn't be able to afford otherwise. The sale still hadn't gone through but at least the mortgage wasn't a problem.
I was considering this too but I think I'm going to rent my place out and release some equity rather than sell it.
@@maries2140 that’s a great suggestion To. There are loads of options once you’re on the property ladder :)
Thanks for this video i'm still on the side of paying the mortgage off early
I was lucky to get one of the older fully flexible mortgages with a low rate, borrow back features, portable etc. I’ve cleared it all down to the minimum amount possible, therefore paying the lowest payment. This gives me the freedom to have funds for, moving house if I choose to, low loan rate eg home improvements, I have no need to pay the admin fee for closing the loan.
However more importantly the bank is looking after the title deeds safely which in itself can add up to quite a bit!!!
I know I could drawdown the loan and invest and probably get a higher return but I prefer not to have debt & payments to deal with.
Besides I now salary sacrifice the highest % I can go to and therefore put the most I can per month into my pension. This means I pay less income tax and my employer gives me 1/2 the national insurance saved as an additional benefit to my pension giving even more free money! I calculate just under 34% of my salary (inc company contributions) now goes towards my future and the net difference is surprisingly low and in reality I’ve got used to living with a lower net income.
Gotta play the system!!
Great discussion points - you dont have to always pay off your mortgage
I love your videos Ken, but this is so far from my reality. My husband and I have not been money wise AT ALL over the years. Focused on lifestyle. Now 38 with three children, renting a house, paying off loan debt. Anyway, inspired by a few things, including your videos, I’m overpaying my loan and trimming my life style as much as possible. I feel like it’s gotta be without my children feeling the pinch though, as it’s not their fault I didn’t screw my head on earlier. It’s not great, I know, but I have to start somewhere 🤷♀️
If we can save enough for a house deposit, then that’s a start. Problem is prices of the size home we’d need now are obviously huge, and would stretch us A LOT! Am I still right to aim to be a homeowner do you think?
I love your reflection. Thank you for sharing honestly.
Yes to home ownership (if you can). It's a great base for building more wealth.
Stay encouraged though. You're not too late at 38 😊. Now you need a strong vision and actually sticking with it.
Mortgage overpayment; such a debate with so many other modes of investment available now, which were non existent years ago! I don’t have enough capacity to follow and keep up to date with stocks and crypto, so I may be best to overpay with my 10% allowance, over saving it in my bank account, but would be interested to know your thoughts and others perspectives, as always open to new ways of thinking!??
Great video mate.
So many FI RUclipsrs obsess about paying the mortgage off.
Me, I will only pay the mortgage off when the lender will not extend the term any longer. So long as interest rates remain so low, I’m happy buying more property rather than pay off my mortgage.
If you ‘feel’ better with no mortgage, then all the logic and maths in the world won’t convince you otherwise. Emotions will trump logic every time
Thanks for watching, Man! 😀. I definitely hear you on buying more property. It makes sense for you and some other people but it won't for most people. There is definitely a case for paying off the mortgage and this will suit many people for reasons beyond the feeling of paying it off.
Especially if they can pay if off quickly and early on their wealth building journey. I can see the optionality that this has created for us and can't place any value on that. Even the ability to take more risks is something that I didn't touch on. There is so much capacity to be more successful at other areas because there is no worry about not being able to pay the mortgage. That list carries on.
But this is an individual thing as everyone who has watched this video so far and those still to watch it are all very individual with individual problems, net worths and opportunity sets.
Hence, it's important to see all paths as valid depending on people's current circumstances and future goals and life expectations.
Very useful video!
Much appreciated! 😀. Please share with others
What if you are in a shared ownership property? Should I pay it off early
What about if the early repayment charge is less than the interest for a year?
APR at 1.75% and early repayment charge of 1% - doesn't it make sense to pay it off?
I personally wouldn't. Think of the opportunity cost of that money. Best to wait till you're out of that ERC and invest that money.
Hi i have a £5500 early repayment fee on the mortgage, when im due to re-mortgage could i then change this to 0 repayment fee?
Not possible, most mortgages have an early repayment fee
@@exerciseisantidote9337 I believe a lot of them are only repayment fees when you're tied into your term, once you're not on your on the base variable rate, you tend to be able to pay off as much as you like.
Thanks Ken this is very informative, I am personally paying off my mortgage and also investing, this will give me extra resources to wipe out my mortgage should I wish. Thanks for sharing knowledge.
Hi, im thinking about paying off the mortgage early but also this may not be our forever home. Off topic..but can anyone advise on what to do if when i come to remortgage in 2 years my partner and I maybe down to one income due to maternity leave or i may just quit working to raise children. Is it hard to remortgage based on one income? Im already worrying about the future :/ thank you in advance
Bank mortgage lending is entirely based off your income at time of application ( last 3 months payslips) so it would only be an issue as such if you are looking to change provider and borrow more than bank would lend on that sole income. Use 4/5 times gross salary as rough guide for amount you can borrow.
Good video
You mean we should not pay off our mortgage early ?
You made me confused
You can pay off your mortgage early. We did. But there are circumstances where it MIGHT serve you better to invest elsewhere. Or to payoff mortgage and invest elsewhere at the same time. That's what this video is trying to highlight.