What does it feel like to be mortgage free?

Picture of our front door covered with wisteria

Living mortgage free

Paying off your mortgage can feel like an impossible dream.

The sums involved are so huge. With house prices so high, most people have to borrow enormous amounts to get a toehold on the housing ladder. Typically, mortgage loans last for 25 years, but nowadays you can stretch them right out to 40.

For most homeowners, their mortgage is their biggest bill each month. That’s a hefty chunk of cash disappearing from your current account, month in, month out, for decades.

But imagine clearing your mortgage. Shedding that burden. Using the money for something else.

I thought about this recently, because a friend paid off her credit card debt, freeing up money previously used for repayments. The question came up about whether to use the spare money to invest, or towards her mortgage.

Right now, mortgage rates are much lower than historic returns from investing. On paper, the choice is clear: invest those extra pounds rather than paying off mortgage debt. If your mortgage rate is only 2% but you might earn more than 5% by investing, head straight for the stock market!

Trouble is, those numbers are not set in stone. I’m a big fan of investing, but there’s no guarantee that mortgage rates won’t rise, and there’s always a risk that investments might plummet. But if you clear your mortgage, no-one can take your home away.

Personally, as someone in the incredibly fortunate position of having paid off their mortgage, I reckon the decision is more emotional than financial. It’s not just about the numbers. It’s also about how you feel.

Short of a lottery win or massive inheritance, clearing a debt as big as a mortgage takes a long time and a lot of work. So holding on to the dream of what it might feel like, clinging to the vision of living mortgage-free, is particularly important.

Here’s what it feels like to me:

Picture of Wray Castle for my post on what it feels like to be mortgage free

Safe as houses

Safety from life’s uncertainties

Shedding our mortgage brought a huge sense of safety and security. No-one can take away the roof over our head. It’s ours.

Perhaps everything is going swimmingly, with no problems paying your mortgage.

But few of us skate through life completely unscathed by illness, unemployment or relationship breakdown. If your income stopped, how many months could you carry on with your mortgage payments?

Can’t get stitched by rising interest rates

Right now, interest rates have been at historic lows for 10 years.  That’s brilliant for borrowers, but it also means the only way is up.

Currently, you can find Best Buy mortgage deals for less than 2%. That’s tiny!

I’m old enough to remember my parents stressing when mortgage rates hit 15%. Rates soared so high so fast that thousands of people lost their homes, unable to afford the repayments.

I don’t have a crystal ball. I can’t predict when rates might rise, and how high. But I do know that making a dent in your debts is much easier when rates are low, and that clearing our mortgage means I’m not afraid of bigger bills in future.

Picture of red skies above cottages for my post on what it feels like to be mortgage free

Fewer storms ahead

Can’t get trapped by changing mortgage rules

Back in the 2000s, I used to write articles encouraging people to remortgage at the drop of a hat.

Come to the end of a mortgage deal? Don’t get stuck on your lender’s standard variable rate, hop onto a new deal and save a ton of cash. Mortgage companies were handing out money right, left and centre. Make a quick call, and it’s all done and dusted.

Right up until it suddenly stopped, broken by the credit crunch from 2007.

Nowadays, mortgage rules are way tighter. You can’t borrow so much. You may need a bigger deposit before you can borrow. You need to show much more evidence of how you can afford repayments, sharing bank account data, ‘fessing up about child care costs, with  greater proof of income. People who merrily hopped from one remortgage to another got stuck when the music stopped. Almost 150,000 ‘mortgage prisoners’ are trapped on higher rates, unable to nab new loans under tighter rules.

So I know that mortgage companies can move the goal posts, and turn off the tap of cheap money. Paying off our mortgage means I never need to worry about rule changes breaking our budget.

Previous post: What does it cost to buy a house?

Freedom to choose different jobs

I stuck with my first job way longer than I would have liked, so I could qualify for a mortgage on my first flat.

But borrowing less, and then clearing our mortgage completely, gave my husband and me the freedom to pursue different careers. With lower bills, we could get by on less money. We weren’t trapped in jobs just to meet our mortgage.

Back in London, I was able to go freelance after maternity leave. Ploughing money into overpayments meant we had a smaller mortgage, so I wasn’t forced to return to a full-time salary.

Moving to Suffolk, and shedding our mortgage completely, meant my husband could go back to working for the charity sector, with shorter hours and less stress. I could continue working as a freelance journalist and then blogger, with variable income and no worries about whether my accounts would meet stricter rules on borrowing by the self-employed. We could both spend more time with our children.

Picture of a turret on a roof for my post on what it feels like to live mortgage free

No turret required

Freedom to use that money elsewhere

My husband and I made the choice to free up time, rather than extra cash, once we paid off our mortgage.

But if you’re happy to stay in the same jobs, slaying your mortgage leaves you with spare money. Suddenly you can choose whether to splash the cash on clothes, holidays and home improvements, salt it away in investments and pensions or hit some happy medium.

Previous post: what does being rich mean to you?

Happier marriage

I’m going to fly the flag for marital harmony.

Money worries are regularly identified as a leading cause of marriages splitting up. Paying off your mortgage removes a massive chunk of that financial pressure (even if it won’t do anything about say snoring, or eating cereal in a particularly irritating way).

For my husband in particular, the only good mortgage is no mortgage at all. So he’s definitely much happier  living mortgage free!

 

Clearing our mortgage has given us safety, security, freedom and less stress. No sleepless nights worrying where the mortgage money will come from. No ‘what ifs’, concerned about future rate rises, rule changes or the uncertainty of investment performance.

A true entrepreneur might prefer to seize cheap money while they can, borrow up to the hilt, and invest elsewhere.

Personally, paying off our mortgage brought enormous peace of mind. To us, that’s priceless.

Now – over to you. What would it feel like to pay off your mortgage? What are the benefits, if you already have? Do share in the comments, I’d love to hear!

Pin for later:

Pinterest size image of front door with wisteria

Leave a Reply

Your email address will not be published. Required fields are marked *

13 Comments

  1. 2nd May 2019 / 4:09 pm

    Interesting viewpoint and something to think about. You are not making my decision easy on what to do with my now spare cash! Thanks for the link

    • Faith
      Author
      3rd May 2019 / 11:39 am

      Great position to have some spare cash though! Good luck with whatever you decide to do.

  2. Tony
    2nd May 2019 / 10:48 pm

    I paid off my mortgage 13 years ago when I was in my mid 40s. Lack of a mortgage enabled me to retrain, take a job that I loved but which was at a much lower salary, and salt away money into my pension. This lead to early retirement at age 57, and I’ve never looked back. I haven’t travelled the world, drive a modest car and live fairly frugally. However, I’m free, not owned by any bank or financial institution and most importantly have time. Prioritising life to pay off my mortgage and invest in my pension was the best choice I’ve made, and can’t recommend it highly enough.

    • Faith
      Author
      3rd May 2019 / 11:38 am

      Brilliant that paying off your mortgage meant you could pursue a job you loved! And many congratulations on retiring early. So glad that clearing your mortgage and investing in your pension worked so well. So agree that time is more important than slaving away to fund an expensive lifestyle.

      • Moira Sutherland
        9th May 2019 / 7:19 am

        Paying off your mortgage might be too big a step, start by looking at paying it off early by paying a little extra each month. I looked at paying ours off in 15 years instead of 25 and found it was not much more each month. But to pay it off in 12 years was way to much money . Over the years we were able to put extra payments in when funds aloud and we paid it off in 10 years.

        • Faith
          Author
          9th May 2019 / 8:15 am

          Hi Moira, Great that you were able to pay off your mortgage so much quicker. Amazing how all the small payments add up. Did you ever work out how much interest you saved by cutting it from 25 years to 10? Must have been thousands of pounds!

  3. Mrs G
    3rd May 2019 / 5:49 pm

    We paid off our mortgage in 2015 (aged 45) – 8 years early. It wasn’t the most sensible decision financially – investing the money would have given us better returns – but the benefits on mental health of knowing we own our home are huge 🙂 We’ve since had our 2 eldest go to uni and been able to help them (and carry on helping them for the next few years – probably until numbers 3 & 4 are due to go!) We’ve also been paying off the mortgage on our investment property, although that’s getting smaller payments for the next couple of years whilst we save for a big family holiday – 3 weeks in USA for a family of 6 during school holidays is not cheap!!!
    Paying off our mortgage means we have choices and the ability to assist our eldest children without it impacting massively on our life 🙂

    • Faith
      Author
      3rd May 2019 / 6:17 pm

      Really interesting point that clearing your mortgage may not have been the best decision financially, but had mental health benefits. Glad it gave you the financial freedom to support your children at uni too. Hope you have a fabulous time in the US when you get there!

    • 11th May 2019 / 1:42 pm

      Totally agree with the sentiment regarding mental health. I loved the feeling of security when we knew there was no mortgage any longer.

  4. 11th May 2019 / 1:40 pm

    As soon as we could afford to we overpaid on our mortgage; just a tiny bit to begin with, then each year we increased it more. We saved 5 years and 7 months off the term. It’s absolutely the best thing to do.

    • Faith
      Author
      11th May 2019 / 2:54 pm

      Amazing what a difference overpayments can make. Saves so much interest!

  5. Chris
    11th May 2019 / 5:21 pm

    Now both in our 60’s, we scrimped & saved really hard for a couple of years in order to buy our first house when I was 21. Carried on with the discipline of saving & investing then paid the mortgage off completely at age 38. This enabled me to change to a less stressful job, walking to work & back in just 30 minutes instead of commuting by train for up to 3 hours a day. Any spare cash was then diverted into the pension pot. After a few years we fulfilled an ambition to resign full time work & go travelling around Europe in a camper van for a few months. Then we discovered that it was possible to work on a casual basis in a variety of jobs during the summer here in the UK, save hard, then go away in the camper & enjoy our winters in the sun. Did that for over 10 years, then took our pensions at 55 & stopped working completely, so now we also travel as much as we can during the summer too. Mortgage freedom is a wonderful thing!

  6. 16th May 2019 / 12:20 pm

    Thanks for sharing a informative post. It is really helpful to everybody. The content in this blog is really wonderful. If you are in the UK and are struggling with debts, you can overcome them safely by availing suitable debt reduction services, & live a debt-free life.