Originally posted by d000hg
View Post
- Visitors can check out the Forum FAQ by clicking this link. You have to register before you can post: click the REGISTER link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below. View our Forum Privacy Policy.
- Want to receive the latest contracting news and advice straight to your inbox? Sign up to the ContractorUK newsletter here. Every sign up will also be entered into a draw to WIN £100 Amazon vouchers!
Build savings or chip away at mortgage
Collapse
X
-
-
Originally posted by d000hg View PostWe did our budget recently and council tax + utilities + groceries are easily pushing a grand a month. Hardly free from financial pressures - our rent was only about 1/3 of our monthly outgoings.Comment
-
Try and get the mortgage payments down to very manageable levels, i.e. £400-200 a month. You can do this quickest by down sizing and getting the lowest rate possible. Then just forget about it and save very penny whilst still having a decent life. Invest the savings to get a decent return. Then as your savings grows you can start taking months off until you only need to top up the savings say working 6 months a year. This is my plan and I will be at the last step in 2 years.Comment
-
Originally posted by SandyD View PostIn the old days people didn't bother paying off the mortgage because they didn't have much surplus money and relied on property market increasing the property value to offset the mortgage value (or in some cases makes the mortgage insignificant compared to the property value) but I am not sure in the future the property values will increase in the same way. Hence, paying off is a good option.
Like NLUK says, try so a few online calculators and play with some scenarios of offset vs fixed, even if offset mortgage % is higher, you are still saving a huge amount on the total debt.Comment
-
Originally posted by aussielong View PostOk I'm half asleep, but this makes no sense to me. You want to pay more to own something faster that is decreasing in value? Surely better to pay less (effectively rent) , invest elsewhere , then pay off the loan if the property comes back into the black? So, if you have negative equity rent the place out , don't sell it unless you have to.
i.e. in the late eighties / early nineties a big farm house with an acre of land in the south would have cost around £180K which was quite expensive back then, same house would be around £800K nowadays
So the original mortgage even if it was 90% would have been a very good investment, but if one buys the same house nowadays for £800K the likelihood of it being worth 2 millions in 15 years is not high (but I could be wrong)Comment
-
Historically we've had wage inflation which has meant that a mortgage becomes relatively cheaper over time, whereas rents tend to rise. I know people who bought in London ten or fifteen years ago whose mortgage payments are now less than my weekly shop, and the places can be rented out for several times that. Obviously they have gained from the rise in property values as well.
We are unlikely to see the same sort of rapid rises in house prices for a while imo, historically after a downturn they bumble along for a protracted period. Rents are still going up in the longer term, so the advantages of buying are still there to be had imoWhile you're waiting, read the free novel we sent you. It's a Spanish story about a guy named 'Manual.'Comment
-
I can understand the keenness to clear a mortgage, I chuck one other thing in to the pot -
Inheritance Tax is prompting some people to maintain a significant mortgage on their properties. It's relatively easy to transfer more liquid assets to others but if your house uses up your whole IHT allowance your dependants could be a bit stuffed.
Ok, some won't care but preference for me would be an offset with a chunk of capital in - same return but more flexibility.Comment
-
Originally posted by lukemg View PostI can understand the keenness to clear a mortgage, I chuck one other thing in to the pot -
Inheritance Tax is prompting some people to maintain a significant mortgage on their properties. It's relatively easy to transfer more liquid assets to others but if your house uses up your whole IHT allowance your dependants could be a bit stuffed.
Ok, some won't care but preference for me would be an offset with a chunk of capital in - same return but more flexibility.Comment
- Home
- News & Features
- First Timers
- IR35 / S660 / BN66
- Employee Benefit Trusts
- Agency Workers Regulations
- MSC Legislation
- Limited Companies
- Dividends
- Umbrella Company
- VAT / Flat Rate VAT
- Job News & Guides
- Money News & Guides
- Guide to Contracts
- Successful Contracting
- Contracting Overseas
- Contractor Calculators
- MVL
- Contractor Expenses
Advertisers
Contractor Services
CUK News
- Streamline Your Retirement with iSIPP: A Solution for Contractor Pensions Sep 1 09:13
- Making the most of pension lump sums: overview for contractors Sep 1 08:36
- Umbrella company tribunal cases are opening up; are your wages subject to unlawful deductions, too? Aug 31 08:38
- Contractors, relabelling 'labour' as 'services' to appear 'fully contracted out' won't dupe IR35 inspectors Aug 31 08:30
- How often does HMRC check tax returns? Aug 30 08:27
- Work-life balance as an IT contractor: 5 top tips from a tech recruiter Aug 30 08:20
- Autumn Statement 2023 tipped to prioritise mental health, in a boost for UK workplaces Aug 29 08:33
- Final reminder for contractors to respond to the umbrella consultation (closing today) Aug 29 08:09
- Top 5 most in demand cyber security contract roles Aug 25 08:38
- Changes to the right to request flexible working are incoming, but how will contractors be affected? Aug 24 08:25
Comment