The Drawbacks of Paying Off Your Mortgage Early | Home Owning Advice
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- Опубліковано 25 чер 2024
- Is paying off your mortgage early always the best financial decision?
In this episode, we discuss the potential drawbacks of paying off your mortgage early and explore alternative strategies to manage your mortgage effectively. Learn about the financial considerations and options available to make informed decisions about your mortgage.
👉 VIDEO TIMESTAMPS ⏳
00:00 Introduction
00:25 Drawbacks to Consider
00:28 Limited access to available cash
00:53 Is it a smart investment?
01:34 Early repayment charges
02:14 Ways to reduce your mortgage payments
02:20 Increase monthly payments
02:46 Consider an offset mortgage
03:26 Consider a shorter-term
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Repaying your mortgage early provides a wonderful feeling of financial freedom, that you have to experience to appreciate.
Whilst there may be more remunerative uses for the money, none bring the same peace of mind and feel good factor. There are so many options going forward.
Absolutely. Especially with the high mortgage interest rate, the only party winning here are the Banks or mortgage lenders if we don't pay off the mortgage early. Not everything is about Maths/financial logic as some people actually want peace of mind. The borrower is slave to the lender.
You're saying the money is tight up in your property: not entirely true, you can always downsize or release your equity. That's unlike money into pension funds, that is tax free when you deposit it but it can't be accessed until the age of 67 (for now). They should allow to use that money at least as a deposit for your first home, at they do in New Zealand. That's how we've managed to buy here in the UK, using our kiwisaver money!
Our home mortgage has nearly come to an end and the bank keeps sending us loan accepts at 19.9 % I wonder why mmmmm, do they think we are mad, banks just love trying it on, ,,,,,,,,,, why not pay the mortgage off if you’ve got the money what else would you do with the money,
There is no such thing as good debt.
If you had to decide between paying off a mortgage in 30 years having additionally paid £200000 in interest versus making investments in 30 years it just makes viable sense to remove all debt and then any money you have afterwards is yours. Offset mortgages are not common nowadays and having an interest only mortgage may be easier but still requires you to pay off a large capital at the end of the term.
I would say only when the mortgages have low interest i.e. before 2022, then I would consider putting more emphasis into savings and investments. Otherwise I would always be overpaying the mortgage and achieving financial freedom.
In an otherwise great channel I don't think this is good advise. The roof over your head is not yours until what is just a loan is paid off. OK so you pay it early and then you boiler goes bang and you need to find 5k. Take a small unsecured loan at a much higher interest rate but that will be far less than 10 years of mortgage interest or whatever. Any loan will always cost you more than the money. Just make the loans as small as possible and your mortgage is usually the largest by a country mile
5k for a new boiler that’s a lot, you must have an expensive plumber,
Faster u pay it of the less interest you pay! It is a huge differeance and saving when paying of as soon as can! Love channel but awful advice.