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View Full Version : Opinions on Paying Off Mortgage Vs Good Lifestyle.



ChrisPackit
1st March 2011, 11:24
I know everyone has their own opinion on what's best, being mortgage free or having a good lifestyle. My situation was that two years ago, I decided to sell my old house, nice detached house c. £200K with small £40K mortgage, and could've paid it off in a few years and be mortgage free by early 40's. Then I decided to buy some land, build a house, get a £120K mortgage but have a house worth probably £450K now. But for me, I am more interested in enjoying life, that maybe owning a couple of nice cars, getting involved in an expensive motorsport hobby, having holidays etc rather than knuckling down and paying it off. I guess I could pay this one off in < 10 years but all of my pleasures would be out of the window. My thoughts are if I can have it settled by 50-ish then that would suit me, and maybe move abroard then.

What's everyones thoughts on this, and what drives you to get it paid off earlier (apart from the interest saving) ?

Churchill
1st March 2011, 11:27
What's everyones thoughts on this, and what drives you to get it paid off earlier (apart from the interest saving) ?

I can't speak for everyone but here's my thoughts. You're a :winker:

ChrisPackit
1st March 2011, 11:29
Cheers, nice and constructive...

EternalOptimist
1st March 2011, 11:38
There's no doubt at all in my mind, suffer now and relax later.

I know its better to enjoy life while you have your youth and stuff, and while your kids are young, but on balance, I think paying off your debts early is the way to go.

when I was about your age, i knocked up a little spreadsheet with a few scenarios. When I saw the difference in overall spendies, it was a no brainer.



:rolleyes:

Old Greg
1st March 2011, 11:40
There's no doubt at all in my mind, suffer now and relax later.

I know its better to enjoy life while you have your youth and stuff, and while your kids are young, but on balance, I think paying off your debts early is the way to go.

when I was about your age, i knocked up a little slate tablet with a few scenarios. When I saw the difference in overall spendies, it was a no brainer.



:rolleyes:

FTFY

d000hg
1st March 2011, 11:41
when I was about your age, i knocked up a little spreadsheet with a few scenarios. When I saw the difference in overall spendies, it was a no brainer.They had those back then?

sasguru
1st March 2011, 11:44
I know everyone has their own opinion on what's best, being mortgage free or having a good lifestyle. ?

Why are they mutually exclusive?
I've done both.
House is worth £1 million +, average for London.

shaunbhoy
1st March 2011, 11:50
Why are they mutually exclusive?
I've done both.
House is worth £1 million +, average for London.

Course you have sas. Course you have.

Now tell him about your fleet of virtual motorbikes too and really blow his socks off!!

:winker: :winker: :winker:

Old Greg
1st March 2011, 11:51
Why are they mutually exclusive?
I've done both.
House is worth £1 million +, average for London.

Not easy to sell on a bail hostel.

curtis
1st March 2011, 11:52
For me its a balance, I really want to pay my mortgage off asap so I can either retire early or not have to worry about being in constant work all the time and mainly just know if any major tulip happens in my life thats one major outgoing I don't have to cover but I don't want to pile so much in that I can't enjoy and make the most of 'the now' in case I get run over by a bus tomorrow!

I could if I piled all my cash into my mortgage have it paid off in 4 years but I'm choosing to pay a substantial amount off each month/end of fixed term rate but leaving enough behind to put in savings so I can have my holidays and a nice car on the drive and no major money worries for general everyday things.

alreadypacked
1st March 2011, 11:54
I know everyone has their own opinion on what's best, being mortgage free or having a good lifestyle. My situation was that two years ago, I decided to sell my old house, nice detached house c. £200K with small £40K mortgage, and could've paid it off in a few years and be mortgage free by early 40's. Then I decided to buy some land, build a house, get a £120K mortgage but have a house worth probably £450K now. But for me, I am more interested in enjoying life, that maybe owning a couple of nice cars, getting involved in an expensive motorsport hobby, having holidays etc rather than knuckling down and paying it off. I guess I could pay this one off in < 10 years but all of my pleasures would be out of the window. My thoughts are if I can have it settled by 50-ish then that would suit me, and maybe move abroard then.

What's everyones thoughts on this, and what drives you to get it paid off earlier (apart from the interest saving) ?

Read "Rich dad, poor dad" what are you going to live on when you are abroad?
Read some of the stories of people who have done what you are planning, didn't work out for most of them.

Because they made lots of assumptions:
Sterling would remain at the same exchange rate
Inflations would not increase higher than their pensions
Property would increase in value abroad at the same rate as the UK.
They would never want to come back to the UK.
Overseas property would be easy to sell, at a higher price than the bought it at and they could recover the cost of the ridiculous over-spend on decorating, pool, BBQ etc.

I think it's funny that people have these ideas on how they are going to spend the rest of their life, without any research.

AtW
1st March 2011, 11:54
Be smart - don't even have mortgage in the first place :smokin

Clippy
1st March 2011, 12:16
Be smart - don't even have mortgage in the first place :smokin

Yes, much better to pay off someones elses by renting instead. :laugh

DimPrawn
1st March 2011, 12:19
Anyone want my opinion?

DimPrawn
1st March 2011, 12:23
Well?

landl
1st March 2011, 12:24
Anyone want my opinion?

I'd like to hear it.

Mich the Tester
1st March 2011, 12:24
I'd like to hear it.

Stone him!

DimPrawn
1st March 2011, 12:27
I'd like to hear it.

It all here in my new ebook, now available on Amazon.

Simple Principles to Become a Millionaire eBook: Alex Lluch: Amazon.co.uk: Kindle Store (http://www.amazon.co.uk/Simple-Principles-Become-Millionaire/dp/B004JU0I04)

Enter "ILovePrawn" in the voucher box at the checkout for a limited time 15% discount on the list price.

landl
1st March 2011, 12:29
Stone him!

How bad could it be?

jmo21
1st March 2011, 12:30
For me its a balance, I really want to pay my mortgage off asap so I can either retire early or not have to worry about being in constant work all the time and mainly just know if any major tulip happens in my life thats one major outgoing I don't have to cover but I don't want to pile so much in that I can't enjoy and make the most of 'the now' in case I get run over by a bus tomorrow!

I could if I piled all my cash into my mortgage have it paid off in 4 years but I'm choosing to pay a substantial amount off each month/end of fixed term rate but leaving enough behind to put in savings so I can have my holidays and a nice car on the drive and no major money worries for general everyday things.

Are you me?!

Contracting is perfect for this too, I'm earning more money than if I was a permie, paying off 3 times my min mortgage payment just now, plus once the mortgage is gone, I can be more choosy about contract roles, and time off.

Unless the missus wants to buy a new house....then I'm ****ed!

:tongue

Old Greg
1st March 2011, 12:33
Are you me?!

Contracting is perfect for this too, I'm earning more money than if I was a permie, paying off 3 times my min mortgage payment just now, plus once the mortgage is gone, I can be more choosy about contract roles, and time off.

Unless the missus wants to buy a new house....then I'm ****ed!

:tongue

Don't worry, she'll just keep the current house for her and the personal coach. Not such a smart move working al those hours.

Mich the Tester
1st March 2011, 12:35
Stone him!


How bad could it be?

Hmmm, the little tiny stones will probably just sting a bit; you have to hope you get knocked out quickly so you don't feel it.

Top tip for people facing death by stoning; your brain copes quite well with impacts from the front or back, but if you're hit on the side of the head you're likely to lose consciousness as the two halves of your brain split apart from the sideways motion. Hence, try to turn your head to face the stoners side on!

landl
1st March 2011, 12:43
Hmmm, the little tiny stones will probably just sting a bit; you have to hope you get knocked out quickly so you don't feel it.

Top tip for people facing death by stoning; your brain copes quite well with impacts from the front or back, but if you're hit on the side of the head you're likely to lose consciousness as the two halves of your brain split apart from the sideways motion. Hence, try to turn your head to face the stoners side on!

I just thought, I'm a bit bored, let's see what the chap has to say. Little did I know that his secret to paying off a mortgage early was to try and sell us something. Have to admire the brazenness of it though...

TimberWolf
1st March 2011, 12:46
It all here in my new ebook, now available on Amazon.

Simple Principles to Become a Millionaire eBook: Alex Lluch: Amazon.co.uk: Kindle Store (http://www.amazon.co.uk/Simple-Principles-Become-Millionaire/dp/B004JU0I04)

Enter "ILovePrawn" in the voucher box at the checkout for a limited time 15% discount on the list price.

I initially read the cover as "Author of over 3 million books".

TimberWolf
1st March 2011, 12:52
Here's a top tip for becoming a millionaire.

Buy £39 worth of Vitenam đồngs, or take your pick from any of these more pricey ways of becoming overnight millionaire.

Least valued currency unit - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/Least_valued_currency_unit)

AtW
1st March 2011, 12:54
I'd like to hear it.

:mad

DimPrawn
1st March 2011, 12:56
Here's a top tip for becoming a millionaire.

Buy £39 worth of Vitenam đồngs, or take your pick from any of these more pricey ways of becoming overnight millionaire.

Least valued currency unit - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/Least_valued_currency_unit)

You can't beat being long on the dong!

milanbenes
1st March 2011, 12:59
There's no doubt at all in my mind, suffer now and relax later.

I know its better to enjoy life while you have your youth and stuff, and while your kids are young, but on balance, I think paying off your debts early is the way to go.

when I was about your age, i knocked up a little spreadsheet with a few scenarios. When I saw the difference in overall spendies, it was a no brainer.



:rolleyes:


I'm with EO Dad here :-)



Crissy,

it's all about assets, and your gaff and those motors are not assets.

I won't elaborate, you can do your own research.


Milan.

TinTrump
1st March 2011, 13:30
I've taken the view that it's better to pay things off sooner in the hope of a more relaxed lifestyle later.

Clearly I'm not in Sasguru's league but I'm 42 with £25k left on my mortgage, albeit on a modest 3 bedroom house. My investments are diversified.

When the opportunity has arisen I've travelled; as some of my elders have advised, that can get problematic with age. It's a question of striking the right balance.

Jog On
1st March 2011, 13:41
Where's the "Keep paying the mortgage normally, don't spend all your cash on having a good time and build up some assets with a view to becoming financially free" option?

Oh it's not a poll :igmc:

And I see AP already brought up the Kiyosaki thing.. :igmc:

That's what I'm doing.. Mortgage payments are currently about £220/month on an £80k loan - I'll put my surplus cash into the markets and property until I don't have to work - then pay it off in a few chunks. Whilst having a good time as well :D

I see so many people who earn less than me driving around in shiny BMWs (they don't own) looking down on my crappy 10 year old Honda - they need to play Cashflow 101 (http://www.richdad.com/store/ProductDetail.aspx?id=1)

MarillionFan
1st March 2011, 13:44
I've taken the view that it's better to pay things off sooner in the hope of a more relaxed lifestyle later.

Clearly I'm not in Sasguru's league but I'm 42 with £25k left on my mortgage, albeit on a modest 3 bedroom house. My investments are diversified.

When the opportunity has arisen I've travelled; as some of my elders have advised, that can get problematic with age. It's a question of striking the right balance.

That's because he's in the Talking Complete Bollocks Premiership League. :eyes

Old Greg
1st March 2011, 13:46
That's because he's in the Talking Complete Bollocks Premiership League. :eyes

But you will admit to a tiny crush on him.

shaunbhoy
1st March 2011, 13:46
Clearly I'm not in Sasguru's league


http://www.youtube.com/watch?v=1IBcxmo_DKw


And don't forget the "Eco-Shed" round the back that houses his virtual motorbike collection too..........

:laugh :laugh

lukemg
1st March 2011, 13:56
Answer is to do both. I would be chucking some at the mortgage, a decent chunk into assets that start generating returns while I sleep and make sure you have some to enjoy yourself on the way through...

DimPrawn
1st March 2011, 14:04
Answer is to do both. I would be chucking some at the mortgage, a decent chunk into assets that start generating returns while I sleep and make sure you have some to enjoy yourself on the way through...

How boringly sensible. Next you'll be telling us to diversify our investments and that the value of investments may fall as well as rise and that past performance is no indicator of future valuation.

Jog On
1st March 2011, 14:18
How boringly sensible. Next you'll be telling us to diversify our investments and that the value of investments may fall as well as rise and that past performance is no indicator of future valuation.

Ok then - go long crude until it tops out then short it all the way down.

Kiwi longs are looking quite interesting as well :tongue

sasguru
1st March 2011, 14:27
Course you have sas. Course you have.

Now tell him about your fleet of virtual motorbikes too and really blow his socks off!!

:winker: :winker: :winker:

Oi poor boy, we know you're a winker.
There's no need to sign off as one.

shaunbhoy
1st March 2011, 15:24
Oi poor boy

I'll take my 6-bed detached thatched cottage with its Devon sea views over your terraced tuliphole in some downmarket Laaandern crime-ridden suburb anyday.

If that makes me "poor" in your book, so be it. You never were one for recognising the difference between quality and cost price anyway.

:laugh

MarillionFan
1st March 2011, 15:32
I'll take my 6-bed detached thatched cottage with its Devon sea views over your terraced tuliphole in some downmarket Laaandern crime-ridden suburb anyday.
If that makes me "poor" in your book, so be it. You never were one for recognising the difference between quality and cost price anyway.

:laugh

Would that be the house with all the :tulip: seeping up through the floor boards? :rollin:

Old Greg
1st March 2011, 15:33
Would that be the house with all the shit seeping up through the floor boards? :rollin:

Oi, that's a design feature.

sasguru
1st March 2011, 15:35
Would that be the house with all the shit seeping up through the floor boards? :rollin:

I can just imagine SB sitting on his stool outside his run down, decrepit cottage, chewing a straw, while his missus draws water from the well and his snot-nosed kids run around with the pigs and chickens.

:rollin:

shaunbhoy
1st March 2011, 15:38
Would that be the house with the extensive front drive with all the tulip seeping up through the extensive front drive?:rollin:

Problem sorted. Marginally defective Victorian Interceptor. As Old Greg said..........design feature. :tongue

Where there's muck there's brass................apparently.

:wink

Still worth more than sas's compact and bijou Lower Wandsworth Broom cupboard.

sasguru
1st March 2011, 15:39
That's because he's in the Talking Complete Bollocks Premiership League. :eyes

Which bit of my claim do you think is bollux.
The fact that my mortgage-free house is worth more than a £1 mill?
And if so why do you think its bollux?

sasguru
1st March 2011, 15:40
Still worth more than sas's compact and bijou Lower Wandsworth Broom cupboard.

Wrong. Next!

shaunbhoy
1st March 2011, 15:41
Which bit of my claim do you think is bollux.
The fact that my mortgage-free house is worth more than a £1 mill?
And if so why do you think its bollux?

Your propensity for talking bollox preceding you I suppose.

shaunbhoy
1st March 2011, 15:54
House is worth £1 million +, average for London.

Hey sas? Which one is yours, and when did you take up the "Discounted Purchase" option?

:laugh



http://www.youtube.com/watch?v=lagXg5ogurs


"Vibrant Ethnic and Cultural mix"

:rollin: :rollin:

DimPrawn
1st March 2011, 15:59
"Vibrant Ethnic and Cultural mix"

:rollin: :rollin:

:spel

Violent

ChimpMaster
1st March 2011, 16:11
Ahem, paying off the mortgage leads to it's own problems ...

http://forums.contractoruk.com/general/62950-mortgage-paid-off-now-what.html

The point being: it never ends. So you pay off your mortgage, then what? You buy an investment property, put some money in high dividend paying stocks, or into emerging market funds, or gold or what? It never ends. There will always be someone richer than you. You'll never have enough money. It never ends. It never ends!

If it's not too much hassle, pay off most of the mortgage and then just put some away and enjoy your life. After all, that's one thing which will end one day.

al_cam
1st March 2011, 16:29
While I have been in the past accused of being a :winker: on here for it, my sig says it all.

I maintained the same level of lifestyle I had before I was a contractor and put the rest into my mortgage.

I don't like risk so having no debts really appeals to me.
After the mortgage I will focus on ensuring a comfortable retiral.

That said, it depends on your circumstances - I have a family to think about, if I were young free and single I would think differently.

DimPrawn
1st March 2011, 16:34
While I have been in the past accused of being a :winker: on here for it, my sig says it all.

I maintained the same level of lifestyle I had before I was a contractor and put the rest into my mortgage.

I don't like risk so having no debts really appeals to me.
After the mortgage I will focus on ensuring a comfortable retiral.

That said, it depends on your circumstances - I have a family to think about, if I were young free and single I would think differently.

Indeed.

It all depends on whether you think you will need to buy a bigger house in the future anyway, your attitude to risk, how near to retirement you think you are etc.

If you are young and living in a bedsit, but have a good income and like taking risk for big rewards it would make more sense to take any savings and buy a BTL in central London (Zone 1 if possible), taking on as big a mortgage as you can.

With unrest around the world growing, the rich are going to be looking at buying hard assets like property in safe places. You can't get safer than London for your assets.

If you are nearer retirement age, already have a big house and a not likely to move, like to sleep at night, pay off the mortgage. With any spare cash buy gold and shares in oil producers and food producers etc.

sasguru
1st March 2011, 16:35
Ahem, paying off the mortgage leads to it's own problems ...

.

Indeed it does.
You have so much money coming out of your ears you worry about where to put it.
Although I'd rather have that worry than the opposite.

DimPrawn
1st March 2011, 16:36
Indeed it does.
You have so much money coming out of your ears you worry about where to put it.
Although I'd rather have that worry than the opposite.

Do you have a good income source for your retirement?

Where will you retire to?

sasguru
1st March 2011, 16:41
Do you have a good income source for your retirement?

Where will you retire to?

Well some of the money is going to conventional pension pots (free money from firms).
Some to mixed assets fund.
Some will go to London BTLs (bought with cash), when the time is right, so that there is a steady rental income stream.
Going to Portugal in May to scope out retirement homes - I like Oporto (nice wines, mild weather, few chav brits)

DimPrawn
1st March 2011, 16:45
Well some of the money is going to a conventional pension pot.
Some to mixed assets fund.
Some will go to London BTL (bought with cash), when the time is right, so that there is a steady rental income stream.
Going to Portugal in May to scope out retirement homes - I like Oporto (nice wines, mild weather, few chav brits)

I reckon now is the time to buy in central London (note this does NOT apply to the rest of the UK, which is like a completely different market). Money from wealthy foreigners is pouring into London assets, and that is going to trickle down to smaller properties, rents are going to follow inflation.

I'd leverage and use your cash as a small deposit to take out a BTL mortgage, but get a Z1 property if you can, the bigger the better.

sasguru
1st March 2011, 16:53
I reckon now is the time to buy in central London (note this does NOT apply to the rest of the UK, which is like a completely different market). Money from wealthy foreigners is pouring into London assets, and that is going to trickle down to smaller properties, rents are going to follow inflation.

I'd leverage and use your cash as a small deposit to take out a BTL mortgage, but get a Z1 property if you can, the bigger the better.

I don't think the sort of properties in areas where foreigners are buying really adds up in terms of rental yield (although I haven't done my sums on this for a while)
I'm happy to sit on the main residence which is in a wealthy foreigners/bankers area and let that rise in value.
Later we will upsize to somewhere nice in Surrey, say, and use the freed up cash to buy 1 or 2 high yield properties (yes we can upsize and still pay less, London is so expensive:rolleyes:)

shaunbhoy
1st March 2011, 17:41
I'm happy to sit on the main residence which is in a rundown Somalian/Bangladeshi area (Hackney) and let that rise in value.
Later we will upsize to somewhere pretentious but not quite so overpriced in Surrey, say, and use the freed up cash to buy 1 or 2 more virtual motorbikes and a big old Eco-Shed for my train set

FTFY