Paying off your mortgage early: a numbers-based look

L'auteur partage son expérience de remboursement anticipé de son hypothèque et explique pourquoi cela peut être une bonne stratégie financière pour certains

The wisdom of this subreddit is generally that it's not worth paying off your mortgage early. I disagree. We just paid off our mortgage early, and I wanted to share a quick breakdown of why it made sense for us from a financial point of view. Let’s say your mortgage payment is £800/month. In the early years, due to how amortisation works, easily 50% or more of that is just interest. So you're paying £400+/month straight to the bank, not reducing your loan by much. Now ask yourself: are your savings or investments generating at least £400/month after tax and inflation? For most people, that’s a no. especially if your savings are in cash or low-risk assets. In that case, it’s often smarter to throw surplus cash at the mortgage rather than let it sit around earning 4% while you're paying 5-6% interest. In our case, we had a smaller mortgage (~£300/month), and we realised we were handing over thousands per year in interest just to maintain a low balance. So we paid it off. It wasn’t a huge monthly saving, but it stopped the interest clock And gave us a guaranteed return equivalent to the mortgage rate. No regrets. Even if you don’t pay it off all at once, small overpayments can save you thousands over the life of the loan. Would love to see what the maths looks like for others who've done similar! Unless of course there is something I've missed? EDIT: I since understand that many folk are on legacy low-interest fixes. In which case I completely understand why you'd not rush to pay it off. In our case, our rate was 5%+ , so less attractive hoping for investments to outperform it.