Paying off mortgage early

Hi,
Inspired by that programme on bbc about paying off the mge early I have just embarked on a project to clear the mge in 12 years. I am paying it off 440 extra pm now and plan to put the SSIA's into it as well as a few other things as they mature over the next couple of years. Also will increase mge repayments by the amount I was saving into the SSIA. Using karls mge calculator I hope to have it cleared by 2018. Does anyone think I am mad? life is for living and all that. The key thing is all this extra prepayments, while could be spent on luxury items cars, hols etc, do not leave me hugely broke or anything. I know I am lucky to be able contemplate this project but what do people think?

club92 said:

Does anyone think I am mad?

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Nope. Perfectly sane, in fact.

Have you asked your lender about the option to revert to normal repayments in the future, if you hit a tough patch or need/want to free up funds for other purposes?

No I haven't but will do - thanks

We're doing the same, if we manage to stick to the plan the mortgage will be cleared in another eight years. We were going to put the pension on hold and put the premiums into the mortgage but decided against it.

Think it's a good idea. if you find yourself overstretched you can reduce the payments a little. I would certainly agree with putting the SSIA money in when that finishes. You will obviously have got used to not having it now so it won't make any difference. I want to do the same but i would first suggest you have some savings put aside for emergencies in an easily accessible account but earning as good an interest as you can. No point overpaying your mortgage if you lose your job one month and have no money to tide you over for a while.

Thrifty said:

i would first suggest you have some savings put aside for emergencies in an easily accessible account but earning as good an interest as you can. No point overpaying your mortgage if you lose your job one month and have no money to tide you over for a while.

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Very good point, i have read a recommendation that you have 6 months income available to tide you over a rough patch. How this was suggested was six six-month no access term saving products maturing on sequential months, to simulate income for six months. when it's not needed to roll them over for another six months.

So long as any other higher rate loan is cleared first..

An so long as soon after clearing the mortgage you don't find yourself borrowing at higher than mortgage rates. If you need credit then mortgage credit is usually the most cost effective. If you can comfortably be debt free and don't need credit for anything then by all means clear the mortgage. That's what we did 7 years into our 20 year mortgage about 6 years ago. Never looked back.

cheers - the idea of having no mge repayment every month is so enticing as well as all the interest saved

Thought I'd mentioned it before here but seemingly not - to gauge the potential savings achievable through accelerated repayment strategies use Karl Jeacle's mortgage calculator.