We've paid off our mortgage .... err .... again

[Clariman]

Strange sensation just now. We first paid off our mortgage 21 years ago - almost to the day

We then moved to a more expensive house 15 years ago and took out a cracking offset mortgage deal at 0.95% above BoE. I can't remember when we got to a fully offset position but it must have been over 10 years ago. We decided to keep the mortgage deal open as a source of cheap money but rarely used it. It has 6 months to go and we definitely won't use it now.

So today I phoned up to formally close it down. After they moved my offset money across to the mortgage account, the Customer Services person said "it must feel great to have paid off your mortgage". Of course it should but I hadn't considered that we had a mortgage for years! But technically we did. The lender still had a hold over our property which was registered with the Land Registry.

I had also been puzzled for ages that we were still paying small amounts of mortgage interest by DD, despite being fully offset. I still didn't get a decent explanation why, but it has been reducing our outstanding loan so we now have a credit balance of about £1,500. A bonus!

So a strange sensation to pay off a mortgage that I always felt we had paid off, if you see what I mean.

[Dod101]

Strange sensation just now. We first paid off our mortgage 21 years ago - almost to the day

We then moved to a more expensive house 15 years ago and took out a cracking offset mortgage deal at 0.95% above BoE. I can't remember when we got to a fully offset position but it must have been over 10 years ago. We decided to keep the mortgage deal open as a source of cheap money but rarely used it. It has 6 months to go and we definitely won't use it now.

So today I phoned up to formally close it down. After they moved my offset money across to the mortgage account, the Customer Services person said "it must feel great to have paid off your mortgage". Of course it should but I hadn't considered that we had a mortgage for years! But technically we did. The lender still had a hold over our property which was registered with the Land Registry.

I had also been puzzled for ages that we were still paying small amounts of mortgage interest by DD, despite being fully offset. I still didn't get a decent explanation why, but it has been reducing our outstanding loan so we now have a credit balance of about £1,500. A bonus!

So a strange sensation to pay off a mortgage that I always felt we had paid off, if you see what I mean.

Well done anyway.

[DrFfybes]

Probably worth doing it now interest rates are on the rise. IIRC ours (Intelligent Finance) paid interest on the savings pot at the same rate as it charged on the debit, however the interest was taxable.

Not sure if they all did this though.

Paul

[scrumpyjack]

Yes, well done. I recall the feeling when I paid mine off in 1983, when the chancellor ended full tax relief on mortgage interest and introduced something called MIRAS. A different age but 12 years of huge inflation had wiped out most of the mortgage in real terms whilst the double digit interest rate was ameliorated somewhat by being tax deductible. Maybe we are heading back to that sort of inflation?

[Lootman]

Yes, well done. I recall the feeling when I paid mine off in 1983, when the chancellor ended full tax relief on mortgage interest and introduced something called MIRAS. A different age but 12 years of huge inflation had wiped out most of the mortgage in real terms whilst the double digit interest rate was ameliorated somewhat by being tax deductible. Maybe we are heading back to that sort of inflation?

I had the same feeling although I had to wait until 1998 before mine was paid off. One bonus was that the original paper deeds were delivered to me, showing every owner gong back to the 1760s. Many of the transfer documents were handwritten, later ones done on a typewriter, and gave clues to the commercial uses of the property in the 1800s. If the property is old it is worthwhile to try and get the physical deeds from the lender, although they do not have much legal significance any more.

My eldest son has to remortgage his property by the end of the year and is struggling. The rates he is being quoted are double what he currently pays. And getting a loan of seven times his income, as he managed in 2015, is just a pipe dream. At this rate I may end up giving him a mortgage myself, but am not sure that is wise.

[terminal7]

Lootman - What a coincidence - my son's (and d-i-l) mortgage had a low fix that run out in the Spring. As they were contemplating moving, we decided that they should move to the variable in the hope of buying/selling fairly quickly. Needless to say, though they had a buyer they could not find a suitable property within their means. Then of course rates started moving and their payments started rocketing. So for probably the final time the Bank of M&D opened for one last transaction in mid-September. We gave them the outstanding mortgage monies particularly as what we could get on this amount fell so far short on what we could get in a low risk investment. Their mortgage now paid off, IHT (assuming we live the requisite period and don't freeze to death because we can't pay the electricity bills) will be much reduced (of course Govt may change exemption levels) and they will need to hunker down and forget about moving in the near future as they could not afford 6%+ mortgage rate.

Interesting to note that asking prices are being slashed (10%+) in his part of London.

T7

[moorfield]

Strange sensation just now. We first paid off our mortgage 21 years ago - almost to the day

We then moved to a more expensive house 15 years ago and took out a cracking offset mortgage deal at 0.95% above BoE. I can't remember when we got to a fully offset position but it must have been over 10 years ago. We decided to keep the mortgage deal open as a source of cheap money but rarely used it. It has 6 months to go and we definitely won't use it now.

...

So a strange sensation to pay off a mortgage that I always felt we had paid off, if you see what I mean.

Very similar position Clariman. We got a cracking offset +0.75% 16 years ago (remember back when the banks were just throwing mortgages around) and will (tomorrow) have fully offset our savings vs. mortgage balance. Second one cleared in 23ish years. But we plan to keep the monthly (now over)payments running for another couple of years at least, until we're comfortable we can drop the liquidity of those savings.

It does feel rather anti climactic. Our week to week routine has not changed, Lady M and I are still working for a good many years yet. But with interest rates on the rise, I think I will sleep better. We are very lucky to have lived and worked through the era of low interest rates, I know.

[redsturgeon]

Very similar here too. Paid off mortgage first time in 2001 Then mortgage free for 17 years until we decided on a major extension to the property. Got an offset mortgage and now may pay it off before we have to reset the interest rate in a year's time.

As you say it all seems a bit anti climactic when it happens.

Interesting to note that the only way forward for young people to get on the housing ladder is via the bank of mum and dad. This does not bode well for the future for young people.

John

[Gerry557]

I had also been puzzled for ages that we were still paying small amounts of mortgage interest by DD, despite being fully offset. I still didn't get a decent explanation why, but it has been reducing our outstanding loan so we now have a credit balance of about £1,500. A bonus!

I found that offsets are quick to up the amount needing paying if you take out 3 pence or so but don't say anything if you put £10k into the offset.