StepOne wrote:I'm looking forward to paying off the mortgage as much as the next man, but I currently have both a mortgage and an HYP. We come out of our fixed rate next March, and I have considered cashing in the HYP and paying off a chunk of the mortgage.
I would be better off each month (mainly because the majority of the mortgage payment is capital repayment, not interest), but when we reach the original mortgage end date, I won't have my HYP sitting in my ISA - instead I will have nothing.
And I can't help thinking that if we did have a bit of extra money each month, it would just go on stuff we don't really need.
If we can get by on what we earn at the moment, then why pay off the mortgage. Just keep the HYP, going and possibly use that to retire a bit earlier.
I understand what everyone says about the psychology, but I keep thinking, why take a course of action that makes me worse off?
Apologies for hijacking the thread
I confess that when I had a mortgage, I also had an ISA. Usually spare money went into the ISA, but sometimes, when I couldn't identify investments that I liked, I paid off mortgage capital. Hence I was effectively borrowing to finance the ISA until I paid the mortgage off (five years early)
I always struggle to fritter away money. It either paid off mortgage debt or was invested. However the decision is easy while you have an income. The results might be the same when you don't, but I bet that it doesn't feel the same if you are drawing down capital from a pension or from an ISA to support yourself until you can claim the pension.