Stop Investing And Pay Off Your Mortgage.

Interest rates are shooting up at the quickest rate in decades and with them the cost of your mortgage. At the same time forecasts for stock market returns look bleak... Should we put the breaks on investing and now focus on mortgage payments instead?

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Timestamps:
00:00 - Is It Time?
01:40 - The Problem
03:22 - Pro 1
04:30 - Pro 2
04:48 - Pro 3
05:15 - Pro 4
05:36 - Con 1
07:29 - Con 2
07:58 - Con 3
08:40 - Con 4
09:11 - Con 5
10:55 - Alternative Option.

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DISCLAIMER: I am not a financial advisor and none of the content on this channel is financial advice. All information is provided for educational/entertainment purposes. If you are making investment or other financial decisions and require advice, please consult a suitably qualified licensed professional.

[jaybartgis]

2:13 what? Do British people not have fixed rate mortgages like the Americans? I guess their system is different than ours

[ClementRusso]

Basically, mortgage rates have reached their highest point since 1998, spanning 25 years. Considering inflation trends, there's potential for them to rise even further. Just a year ago, a 28year fixed rate was only 6%. This prompts the question: should I wait for a housing market downturn before buying or shift my focus towards the equity market?

[ddaa]

I'll have mine paid in 12 months I've just turned 45, cant wait, 👍🏻👍🏻👍🏻

Edit, its paid 🎉🎉🎉

[TheCompoundingInvestor]

I threw everything at the mortgage, making quite a few sacrifices along the way. When it was all gone in 2009 I decided to turn the tables and get the banks to pay me instead. With the mortgage gone I now had extra firepower each month to build a dividend portfolio which I have been compounding ever since and generate over £1000 a month in passive income. And as you mentioned Damien, there is also the psychological effect of getting rid of the mortgage burden which should not be underestimated.

[yannip]

100% mortgage-free, debt-free and peace of mind is priceless!

[paulmussett]

I did both from 2012. I hedged my bets. I invested in my SIPP and overpaid my mortgage. Result. Win Win.

[geztinsdale]

paid my 25 year mortgage off in 15 years, im 50 now and boy is it great watching all these videos / news and not having to worry about interest rates. Sure I could have invested but my risk tolerance is zero and me and my family will now always have a place to call home. 100% of repossessions happen to those who have mortgages....

[timsilva]

I paid large amounts extra to the principal during the first few years of my 30 year mortgage. This not only increased my equity, but made all subsequent payments as if I was paying extra, since interest amount was lower. I refinanced to a 15 year mortgage after 5 years when interest rates declined and my new payment was actually lower. I continued investing and overpaying my mortgage. In 2022 I paid off the mortgage which allowed me to retire with pension at 55.
I've contributed to my 401k since I was 24, so I have more to come, along with Social security.

[nickname]

The moment of paying off a mortgage is one of the most fantastic experiences in life.

[AlisonWonderland]

You certainly picked an "interesting" time in UK history to be a financial commentator 😁Always impressed by your ability to help make sense of overwhelmingly difficult situations.

[ryandaley]

Biggest lesson i learnt in 2022 in the housing market is that nobody knows what is going to happen next, so practice some humility and follow a strategy with a long term edge.

[kerrylow]

Great video. We made sure we had an emergency fund before paying additional to mortgage, then if we get pay rises we split 3rd mortgage, 3rd spend (usually on food!) 3rd short term savings goals. We have inched along but now have brought our 25yr mortgage to 3 years to go...we refinanced when rates went crazy low and locked for 5 years. When you get a way in the interest starts to drop aswell as you are paying extra so it drops faster and faster...it's so worth it for us but we wouldn't cut everything we enjoy just prioritised the things we enjoy most.

[k.h.]

The thing with paying off your mortgage is that you clear off a lot of downside risk: if life interferes (inflation, illness, losing a job, divorce etc). Downside risk is way more important than upside potential.

[Norristheforest]

Great that you mentioned the 'feeling of freedom' it's a point that's often overlooked in the pursuit of greater potential gains.

[notyet]

So many people see their homes as something to make money instead of a place to live. If you value money, you will invest your if you value freedom, you will pay off your home.

[BenCarnage]

I have paid my mortgage below 50 %. My rates are locked until 2025 at 1.5 %. It is my only form of debt. Trying to min/max returns without considering risk will leave you exposed to needing to pause investments or even selling investments at a loss to cover expenses. A low risk approach that values cashflow benefits and very low day to day costs makes it easy to keep investing no matter what else is going on. Don't just get stuck on the highest rates of returns because you'll be very exposed.

I'll be a millionaire 10/10 times. I'm not worried about the specific number of millions. It really doesn't matter much.

[VegasMilgauss]

Dave Ramsey baby steps 4, 5&6, invest 15% then throw everything else at paying off the house. 👍 great video

[galacticsupervolcano]

Our 5 year fixed rate (2.89%) was up at the end of August & after many long discussions My wife and I decided to sell everything & dump 90% of our life savings into the mortgage and pay it off. I don't know if it was the right decision long term but, you can forgive me for feeling like Einstein for a month or two!!

[felixveja]

I am a huge fan of paying off the mortgage. The peace of mind is priceless. I can sleep at night if my investments have taken a hit, no problem. But won't ever risk my home. However, I purchased in 2013 in the Midlands, and it's a small home so wasn't stupid money, and managed to clear it in 6 years when I was 34, which gives me many years to invest. Might be different if it was a larger mortgage amount.

[Asif]

Personally I think a mixture of both. Build up a contingency fund for 3-6 months. Overpay on mortgage whilst investing through ISA accounts. Don’t think it needs to be one of the other. Just do all and manage accordingly