Overpaying mortgage on joint mortgage

[unwashed potato!]

If this is your only aim, then the easiest and least complicated way to protect your money is to put it in to a savings account.

When you re-mortgage you can pay off any amount lump sum you want. The only saving you will have made between overpaying and not is of the interest you would have paid on the portion of capital you would have overpaid down. This is offset by the amount of interest you will earn on the money that is built up in savings. So for the minor cost impact you get all the protect you want without fuss, and you can deal with the hassle of paperwork etc all at the same time when you re-mortgage rather then piecemeal as you try and overpay.

In your case, not overpaying, but saving is the most sensible solution.

Thanks. Just checked and our interest is 2.34 percent.

Anyone able to recommend a savings account so I can compare? Hadn't thought to go down that route

 

[Syla5]

Even if you find a savings account that only offers 1.5%, the impact cost to you for wanting to keep your money safe is 0.84% overtime on the amount saved from when you may have paid off that amount.

You will need to look at savings options yourself, get in money saving expert for best savings accounts as it varies massively. You could get an isa at roughly 1.5% for example.

 

[Simon]

Not sure why everyone’s in such a hurry to pay off mortgages now a days. Money is cheap to borrow and keeping it out of a house offers liquidity and protection in this case.

 

[unwashed potato!]

keeping it out of a house offers liquidity

That's partly my worry. Money like that accessible is easy to spend on things I don't really need

 

[Psycho Sonny]

Not sure why everyone’s in such a hurry to pay off mortgages now a days. Money is cheap to borrow and keeping it out of a house offers liquidity and protection in this case.

It depends a lot on your own personal circumstances.

I know people who are overextended and they don't overpay anything and can just about barely afford their normal payments.

Some people just want it paid off ASAP or at a very comfortable level where they can do what they want.

I know if my mortgage was paid off. I could easily add to my income by taking a part of the equity and buying a flat outright to lease out. The income from the flat would more than cover the mortgage so essentially it would be a free flat once it's paid off. Essentially a free pension for me and free income for life to descendants.

I'd rather do that than overextend and try and cover 2 mortgages and buy another flat right now. Then if something happens I don't have the issue of ending up losing both.

Property is silly money nowadays and it's okay saying what you are if you bought 20-30 years ago for pennies and just paid it off normally. Buying today it's a lot more expensive so getting that paid off is a huge burden lifted and a milestone some want to achieve ASAP due to the cost of buying these days.

For example I know a woman at work who just paid off her mortgage. I was like well now think of all the money you will now have spare. She was like what a whole £200 a month? I was shocked but she did buy yonks ago and for peanuts. £200 a month doesn't even cover my council tax bill never mind the mortgage.

 

[Bounce]

It depends a lot on your own personal circumstances.

I know people who are overextended and they don't overpay anything and can just about barely afford their normal payments.

Some people just want it paid off ASAP or at a very comfortable level where they can do what they want.

I know if my mortgage was paid off. I could easily add to my income by taking a part of the equity and buying a flat outright to lease out. The income from the flat would more than cover the mortgage so essentially it would be a free flat once it's paid off. Essentially a free pension for me and free income for life to descendants.

I'd rather do that than overextend and try and cover 2 mortgages and buy another flat right now. Then if something happens I don't have the issue of ending up losing both.

Property is silly money nowadays and it's okay saying what you are if you bought 20-30 years ago for pennies and just paid it off normally. Buying today it's a lot more expensive so getting that paid off is a huge burden lifted and a milestone some want to achieve ASAP due to the cost of buying these days.

For example I know a woman at work who just paid off her mortgage. I was like well now think of all the money you will now have spare. She was like what a whole £200 a month? I was shocked but she did buy yonks ago and for peanuts. £200 a month doesn't even cover my council tax bill never mind the mortgage.

how old was she 60?

 

[Psycho Sonny]

how old was she 60?

I don't know but she's worked here for like 30+ years so she isn't a spring chicken. My house was built 20 years ago and cost less than half what it's worth today nearly a 1/3rd I think. So to triple your money within 20 years had you been born 20 years earlier must have been nice.

My home will never be worth 3 times what I paid for it in 20 years time. So a lot of older people don't really have a clue when it comes to newer and younger folk on the market and the commitment and hassle a mortgage is compared to back then.

 

[Simon]

Yes personal circumstance dictate but the OPs are pretty clear here and getting 2.3% a year from a a few dividend paying companies should be pretty safe to enable to money to remain his and not tied up in a joint owned property

Also You have not looked at buy to let tax changes if you think rental income can cover mortgage interest.

Interest is no longer deductible from april 2020 so you are taxed on the entire income.

 

[unwashed potato!]

Also You have not looked at buy to let tax changes if you think rental income can cover mortgage interest.

.

assume this isn't related to me?

 

[unwashed potato!]

just to update. i've opened a 1 year fixed rate savings account with metro at 1.85% aer. is close enough to the interest rate and much better for me after looking at things.

thanks all

 

[Psycho Sonny]

Yes personal circumstance dictate but the OPs are pretty clear here and getting 2.3% a year from a a few dividend paying companies should be pretty safe to enable to money to remain his and not tied up in a joint owned property

Also You have not looked at buy to let tax changes if you think rental income can cover mortgage interest.

Interest is no longer deductible from april 2020 so you are taxed on the entire income.

Would be buying the flat outright. The income would be paying the mortgage on home which would have low interest anyway. But off topic. There is no point in buying to let and you having a large mortgage on the rental property.

 

[unwashed potato!]

Would be buying the flat outright. The income would be paying the mortgage on home which would have low interest anyway. But off topic. There is no point in buying to let and you having a large mortgage on the rental property.

i don't get why. if i had a rental property with say a mortgage of £1100, but the rent i get was just £1000, i'd be happy.

in 5 years i'd be getting £1100 as rent goes up. in x amount of years, my mortage is paid off and it cost me just £100 per month.

Am I missing something?

 

[Psycho Sonny]

i don't get why. if i had a rental property with say a mortgage of £1100, but the rent i get was just £1000, i'd be happy.

in 5 years i'd be getting £1100 as rent goes up. in x amount of years, my mortage is paid off and it cost me just £100 per month.

Am I missing something?

Mortgages on buy to let are on much higher interest rates than properties you own to live in.

Also you need to pay tax on that £1K per month. You also need to pay for maintenance, management, marketing, factor fees, etc. So from that £1K you are lucky to walk away with £500 a month. So it's not as clear cut as what you think it is.

 

[unwashed potato!]

ah of course the tax. you're right. 40% to lose is a big wack and then costs etc on top. buying a property here, earning no income other than through property, and then having a job/life abroad certainly would help then in that case?

 

[EvilRob]

Mortgages on buy to let are on much higher interest rates than properties you own to live in.

Also you need to pay tax on that £1K per month. You also need to pay for maintenance, management, marketing, factor fees, etc. So from that £1K you are lucky to walk away with £500 a month. So it's not as clear cut as what you think it is.

There's not much difference in mortgage rates, actually. I'm currently remortgaging my BTL and have a BTL mortgage offer at 1.4% interest.

Fully agreed on your comments regarding additional costs and income tax, though

 

[D.P.]

yes if married that's true. at the time i'm making that commitment it'll be something i'd have considered and everything it means to get married

at the moment we aren't married and are what feels like a long way away. various reasons, but partly i'm not sure how much i believe in it, so should the worst happen, divorce and all that comes from that may never be an issue if we don't get married

Legally, if you live with a "life partner" as if you were married then come a split in the relationship then you may be at a risk of having to share 50% of assets anyway,.

You thow kids in to teh picture and any kind of pre-nup would be instantly ignored. Without children the courts may take a such a legal documentation in to consideration but it has no real legal weight.

One of the basic issues once you are in any kind of long term committed relationship is that it has to be considered in its entirety. There is no yours and theirs. However much you and her earn are irrelevant as there are so many factors that would not be the same if you were not together. The classic example if the women stops working to raise the children to effectively earns zero, but in the eyes of the law, and in a very strong moral sense, she is contributing equally to the running of the house hold. But this applies without children. One of you might have had much better job opportunity if you could move away/abroad or go by to college, but the decision to stay in a committed relationship alters the choices available.


But I can only agree with the others, you have some serious issues to work through and need to have a long hard think about your relationship regardless of marriage,

 

[Syla5]

i don't get why. if i had a rental property with say a mortgage of £1100, but the rent i get was just £1000, i'd be happy.

in 5 years i'd be getting £1100 as rent goes up. in x amount of years, my mortage is paid off and it cost me just £100 per month.

Am I missing something?

A physical asset is much more likely to get caught up in any separation dispute as well, regardless of it being in sole name or not.

 

[unwashed potato!]

But I can only agree with the others, you have some serious issues to work through and need to have a long hard think about your relationship regardless of marriage,

There are people on here that say they wouldn't buy a house with a girlfriend, we'd been together just 1 year at this point. Would you buy a house with a partner of just 1 year? If not why, too much risk? For me a I trusted her enough to do it. Now a year later and I'm told we have serious issues, when we are the ones who've been more risky with our decisions because of our solid relationship we felt confident our risks were minimal.

I don't feel this serious issues we need to sort out are any where but in your lots heads

 

[D.P.]

There are people on here that say they wouldn't buy a house with a girlfriend, we'd been together just 1 year at this point. Would you buy a house with a partner of just 1 year? If not why, too much risk? For me a I trusted her enough to do it. Now a year later and I'm told we have serious issues, when we are the ones who've been more risky with our decisions because of our solid relationship we felt confident our risks were minimal.

I don't feel this serious issues we need to sort out are any where but in your lots heads

and yet here you are trying to find a way to hide money from your partner instead of considering her absolutely equal and deserving of hlaif of everything.

if this is your forever partner then dont be a ****. and just accept that love will have a risk.

 

[D.P.]

another perspective is that you are posting a concern about your partner leaving you and the financial outcomes, but you haven't discussed other financial difficulties you might equally encounter, or other serious concerns. what if you lost your job and had to foreclose your house? What if you or your partner have a serious medical issue? what if your partner has a job their life opertunity abroad and you have to sell your property and simultaneously take a huge pay cut.

there are infinite possibilities but the only you have posted about is a concern about loosing money to your supposed life partner