Pay off mortgage or just have fun?
Discussion
Hiya, just pondering finances and stuff with girlfriend and thinking about best way to spend disposable over next few years. Sensible head says pour extra cash into paying off mortgage (max i can do is double current payments i think) and finish mortgage inside 9 years. That would maybe free us up to get out of the rat race a bit earlier or have more to spend once mortgage is done. Or should we just let the mortgage run its course and spend the extra on cars/hols/plasma tvs etc
Keep existing mortgage (assuming the rate is good) and use the spare cash to invest in a share ISA £7000 each, each tax year. You'll need to keep the ISAs for a long time to lower the risk.
That's what I have been doing and I am much better off now than if I had paid off mortgage earlier.
That's what I have been doing and I am much better off now than if I had paid off mortgage earlier.
Honestly, although it makes logical sense to pay off chunks of the mortgage capital, why not "make memories".
You could always spend half of the surplus cash on premium bonds - then at least you've got the emotional fall-back position that you 'may' strike it lucky and be able to pay off your mortgage as well!
That said, I paid off my mortgage some time ago and it really is liberating, but I'd still rather "make memories" (holidays, meals out, cars, etc.)
You could always spend half of the surplus cash on premium bonds - then at least you've got the emotional fall-back position that you 'may' strike it lucky and be able to pay off your mortgage as well!
That said, I paid off my mortgage some time ago and it really is liberating, but I'd still rather "make memories" (holidays, meals out, cars, etc.)
davey68 said:
Hiya, just pondering finances and stuff with girlfriend and thinking about best way to spend disposable over next few years. Sensible head says pour extra cash into paying off mortgage (max i can do is double current payments i think) and finish mortgage inside 9 years. That would maybe free us up to get out of the rat race a bit earlier or have more to spend once mortgage is done. Or should we just let the mortgage run its course and spend the extra on cars/hols/plasma tvs etc
Provided you can still put aside some savings for emergencies, I'd be tempted to say pay the mortgage off early, you'll save a packet on interest payments that way, and once your done you'll be living rent/mortgage free.... and at that point you can really start to save money fast.
Cars,hols and plasma's, IMO
Money is meant to be enjoyed and used and as long as you are comfortable with the size and term of the mortgage let it run, after all how much would you feel you had wasted your life and wish there were other things you had done and places you had seen if you were diagnosed with some terminal illness in 8 1/2 years time ? Nothing is sadder than couples in there 40/50's who are dead proud that they have paid their mortgage off by saving hard and being carefull and then they start busily building up "just in case" funds in the bank. The problem is that they have become so terminally dull that they couldn't spend the money if they wanted to because they have lost all imagination or desire. If you spend the next 9 years locked in the house clearing your mortgage you will come out the other end a wealthy dull person who doesn't know how to enjoy yourself, sure you and your girlfriend will be worth a few bob but lets be honest she'll have probably dumped you by then and buggered off with someone with an ounce of get up and go in their lives.
Money is meant to be enjoyed and used and as long as you are comfortable with the size and term of the mortgage let it run, after all how much would you feel you had wasted your life and wish there were other things you had done and places you had seen if you were diagnosed with some terminal illness in 8 1/2 years time ? Nothing is sadder than couples in there 40/50's who are dead proud that they have paid their mortgage off by saving hard and being carefull and then they start busily building up "just in case" funds in the bank. The problem is that they have become so terminally dull that they couldn't spend the money if they wanted to because they have lost all imagination or desire. If you spend the next 9 years locked in the house clearing your mortgage you will come out the other end a wealthy dull person who doesn't know how to enjoy yourself, sure you and your girlfriend will be worth a few bob but lets be honest she'll have probably dumped you by then and buggered off with someone with an ounce of get up and go in their lives.
Hmmmmmm on the one hand there is an argument for 'live today you might be dead tomorrow', but you need to be careful if you think that the only way to derive pleasure from life is by spending money.
.....because the problem is, if you spend all of your money 'living for today' you might find yourslef still alive 'tomorrow' but living a miserable existence on the breadline because hard times have come and you had no savings setaside.
A middle ground might be to save as much as possible whilst still experiencing the great things that life has to offer, many of which are free, or can be far cheaper than you might think.
.....because the problem is, if you spend all of your money 'living for today' you might find yourslef still alive 'tomorrow' but living a miserable existence on the breadline because hard times have come and you had no savings setaside.
A middle ground might be to save as much as possible whilst still experiencing the great things that life has to offer, many of which are free, or can be far cheaper than you might think.
mel said:
Cars,hols and plasma's, IMO
Money is meant to be enjoyed and used and as long as you are comfortable with the size and term of the mortgage let it run, after all how much would you feel you had wasted your life and wish there were other things you had done and places you had seen if you were diagnosed with some terminal illness in 8 1/2 years time ? Nothing is sadder than couples in there 40/50's who are dead proud that they have paid their mortgage off by saving hard and being carefull and then they start busily building up "just in case" funds in the bank. The problem is that they have become so terminally dull that they couldn't spend the money if they wanted to because they have lost all imagination or desire. If you spend the next 9 years locked in the house clearing your mortgage you will come out the other end a wealthy dull person who doesn't know how to enjoy yourself, sure you and your girlfriend will be worth a few bob but lets be honest she'll have probably dumped you by then and buggered off with someone with an ounce of get up and go in their lives.
Sound advice Mel, theres a job here for you if you want to be a financial adviser
Thanks for the comments guys...interesting stuff. Must admit im torn and have always in the past gone down the 'f**k it' route and blown it on cars/hols etc As was mentioned memories are there forever! i think whats driving this is that im totally fed up with the ratrace and job im doing at the moment. Id like to be able to get out and do something else...which leads to the next question..what do i really want to do!!! Sorry, am probably hitting my mid life crisis a few years early!
>> Edited by davey68 on Wednesday 11th January 10:05
>> Edited by davey68 on Wednesday 11th January 10:05
davey68 said:
Thanks for the comments guys...interesting stuff. Must admit im torn and have always in the past gone down the 'f**k it' route and blown it on cars/hols etc As was mentioned memories are there forever! i think whats driving this is that im totally fed up with the ratrace and job im doing at the moment. Id like to be able to get out and do something else...which leads to the next question..what do i really want to do!!! Sorry, am probably hitting my mid life crisis a few years early!
>> Edited by davey68 on Wednesday 11th January 10:05
Aha it's a mid life crisis thread.....excellent
timmy30 said:
Hmmmmmm on the one hand there is an argument for 'live today you might be dead tomorrow', but you need to be careful if you think that the only way to derive pleasure from life is by spending money.
.....because the problem is, if you spend all of your money 'living for today' you might find yourslef still alive 'tomorrow' but living a miserable existence on the breadline because hard times have come and you had no savings setaside.
A middle ground might be to save as much as possible whilst still experiencing the great things that life has to offer, many of which are free, or can be far cheaper than you might think.
sensible advice. paying off the mortgage, is the same as saving up - you can always release some funds in the future. maybe i'm a bit of an idealist, but i think you should try be happy without spending money.
maybe move to an offset mortgage. it will give you maximum flexibility, but you need a bit of discipline to operate these sort of accounts.
Remember that you can buy nice reliable cars for not-that-much-money that don't lose value either.
Spend £10-15k on a '70s/'80s G-series 911. It won't let you down, you'll be driving a Porsche 911, and it'll always be worth upwards of £10k at the very least.
Then look at repaying the mortgage.
Spend £10-15k on a '70s/'80s G-series 911. It won't let you down, you'll be driving a Porsche 911, and it'll always be worth upwards of £10k at the very least.
Then look at repaying the mortgage.
I'd echo Andy's thoughts - pay a bit extra on the mortgage and enjoy the remainder.
Going along with Mel's thoughts, I have a friend who is 36 years old. For the past five years it's been his goal to pay off his mortgage ASAP and he can talk about little else.
A bloke who used to be a right laugh and a beer is now so tedious I can't bear to go down the pub with him. All he wants to talk about is mortgages, pensions, insurance, double glazing and what how much money am I making in comparison to him.
In that time he's done nothing memorable other than one holiday that his wife dragged him on to.
Achieve some balance in life. Paying a mortgage off early has merits (i.e. saving money so you can enjoy life later too), enjoy some now, some later.
Going along with Mel's thoughts, I have a friend who is 36 years old. For the past five years it's been his goal to pay off his mortgage ASAP and he can talk about little else.
A bloke who used to be a right laugh and a beer is now so tedious I can't bear to go down the pub with him. All he wants to talk about is mortgages, pensions, insurance, double glazing and what how much money am I making in comparison to him.
In that time he's done nothing memorable other than one holiday that his wife dragged him on to.
Achieve some balance in life. Paying a mortgage off early has merits (i.e. saving money so you can enjoy life later too), enjoy some now, some later.
andy400 said:
Why not just find a balance between the two? You don't have to choose one or the other. How about one and a half mortgage payments or savings and blow the rest. The right balance is what I strive (and so far succeed, touch wood, fingers crossed etc) to achieve.
Totally agree with the idea of doing both.
You don't have to make that extra payment on the mortgage every month so if you fancy Jo'berg rather than Pisa next year just don't make the extra payments for a couple of months.
twincam16 said:
Remember that you can buy nice reliable cars for not-that-much-money that don't lose value either.
Spend £10-15k on a '70s/'80s G-series 911. It won't let you down, you'll be driving a Porsche 911, and it'll always be worth upwards of £10k at the very least.
Then look at repaying the mortgage.
Could get the dents out for only a couple of squid too
Money isn't everything. Owning your own home outright isn't either.
I know people who have finished their mortgage early, only to then decide on a family and get a new mortgage on a nice home in the countryside.
Chances are in 5 years you may want to move or circumstances change, and the real crux is that you'll want more. OK, you'll get more because you've saved, but just like a pay rise looks good, the money soon goes. The more you pay off your mortgage, the more inclined you will be to borrow more to further better your living!
Still, if you can do it (pay off mortgage sooner) and still get out and have fun and not restrict yourself, then go for it imho! I'm paying 10% more at the moment and it's a good long term investment. The best savings are paying off your debts ultimately! Just don't let your debts rule a big chunk of your life... better to let them take longer t pay off and give you more freedom
Dave
I know people who have finished their mortgage early, only to then decide on a family and get a new mortgage on a nice home in the countryside.
Chances are in 5 years you may want to move or circumstances change, and the real crux is that you'll want more. OK, you'll get more because you've saved, but just like a pay rise looks good, the money soon goes. The more you pay off your mortgage, the more inclined you will be to borrow more to further better your living!
Still, if you can do it (pay off mortgage sooner) and still get out and have fun and not restrict yourself, then go for it imho! I'm paying 10% more at the moment and it's a good long term investment. The best savings are paying off your debts ultimately! Just don't let your debts rule a big chunk of your life... better to let them take longer t pay off and give you more freedom
Dave
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