Reply to: Paying Off the Mortgage

[brianrhill]

Consider remortgaging to a flexible mortgage that you can move money in and out of as you like. In the event that you need to get another mortgage later on, it's easier to do so if you have a mortgage in place rather than an "unencumbered" property (no mortgage), and you'll find getting credit etc later on won't be affected.

Brian

[DimPrawn]

mortgage rate + inflation rate, presumeably ?

Only if your house price is going up > inflation.

If you pay off your mortgage and the value of your house is going down 10% p.a and inflation is +10% per annum, when you retire it will be worthless, so no worse than paying it into a pension.

Who cares anyway?

[Platypus]

CGT is payable on disposal of assets, not when you've paid for them.

Also your main residence is exempt from CGT

[Moscow Mule]

Do you not pay capital gains on a property if you've paid off the mortgage? Or is that a wife's tale?

CGT is payable on disposal of assets, not when you've paid for them.

[moorfield]

Yes. but seeing you ain't paying 40% tax and the rest will pay for an income for life, it's a good idea if you can find SIPP investments that beat the mortgage rate for returns.

mortgage rate + inflation rate, presumeably ?

[Incognito]

Do you not pay capital gains on a property if you've paid off the mortgage? Or is that a wife's tale?

[DimPrawn]

Er... presumeably you will need to accumulate 4x mortgage amount if you want to pay it off with the 25% tax free ?

Yes. but seeing you ain't paying 40% tax and the rest will pay for an income for life, it's a good idea if you can find SIPP investments that beat the mortgage rate for returns.

And New Labour don't steal you money 6 months before you retire, or put retirement age up to 105.

[moorfield]

Er... presumeably you will need to accumulate 4x mortgage amount if you want to pay it off with the 25% tax free ?

[ChimpMaster]

I hope you don't work in finance.

If your pension is growing by the same rate as your mortgage payments, you are getting to pay the mortgage and have all your money tax free to pay it off.

Agreed in principal, but pensions aren't guaranteed to grow.

[DimPrawn]

huh? Pension better than paying mortgage, BS

Pay off the mortgage, the 40% is a one off thing, you can make it up by working a couple of months extra next year (if you are planning to take time off), or divide the payment over 2 years to pay less tax.... the 6% interest sounds less than 40% but don't forget its repeated every year over the whole term.

I hope you don't work in finance.

If your pension is growing by the same rate as your mortgage payments, you are getting to pay the mortgage and have all your money tax free to pay it off.

[SandyDown]

huh? Pension better than paying mortgage, BS

Pay off the mortgage, the 40% is a one off thing, you can make it up by working a couple of months extra next year (if you are planning to take time off), or divide the payment over 2 years to pay less tax.... the 6% interest sounds less than 40% but don't forget its repeated every year over the whole term.

[expat]

Sadly that's the downside with pensions. New Lie may raid the pots of "wealthy greedy people" who worked hard all their life, were prudent and law abiding.

They might make the retirement age 105 years old. They might take the tax money back. Who the fook knows.

Then again then will likely make owning any property illegal in a few years time to "protect the poor".

You sound like you're suffering from the delusion that New Labour are socialist.

[DimPrawn]

Except that the SIPP pension age will likely be 60 or 65 for many of us.

Sadly that's the downside with pensions. New Lie may raid the pots of "wealthy greedy people" who worked hard all their life, were prudent and law abiding.

They might make the retirement age 105 years old. They might take the tax money back. Who the fook knows.

Then again then will likely make owning any property illegal in a few years time to "protect the poor".

[chicane]

Or put the money into a SIPP pension that grows at 6%. In this way, Gordon Brown actually gives you the 40% tax back.

Then at 55 yrs old, take a lump sum of 25% of you pension pot and pay of the mortgage with that.

Except that the SIPP pension age will likely be 60 or 65 for many of us.

[expat]

Or put the money into a SIPP pension that grows at 6%. In this way, Gordon Brown actually gives you the 40% tax back.

Then at 55 yrs old, take a lump sum of 25% of you pension pot and pay of the mortgage with that.

WHS.

<cough!> I mean, "Hear! Hear!"