Should you OVERPAY or INVEST in 2023?

In December 2021 I did two videos asking whether it made more sense to overpay your mortgage or invest.

Back then, the Bank of England base interest rate was 0.1%. As I record this, it is 4.25% and probably heading a little higher yet.

Mortgage rates have followed suit of course, so I think it’s time to revisit, here in Spring 2023 - does it make sense to overpay your mortgage or invest?

#meaningfulmoney #meaningfulacademy #buildwealth

🏷️ Use PROMO Code "YOUTUBE" to save on any of the three courses.

The MeaningfulMoney Community (Facebook):

FOLLOW ME:

⚠️ IMPORTANT: Please be aware that MeaningfulMoney does NOT endorse or recommend ANY people or businesses claiming to be experts in crypto or other investments. We would never recommend you any investment strategies within the comments section. Please protect yourself against spam and misleading information from fake accounts and please do not share any private or sensitive information.

📫 Leave me a comment below - I read all of them and love hearing from you!

[MeaningfulMoney]

Thanks for watching! I appreciate you!

[maltesetony]

I paid my mortgage off in 2015. At the time, my then manager said to me, "No-one EVER regretted paying-off their mortgage early". I've never heard anyone contradict that.

[Bezosjesss]

Excellent video as always, Pete. When you first introduced the Ramsey baby stages some years ago, you truly did help me organise my finances. I appreciate you giving us advise throughout the years. In 2017, I also paid off my mortgage. My boss at the time told me at the time, "No one has ever regretted paying off their mortgage early." No one has ever refuted it, to my knowledge. Continue your wonderful work.

[andrewrobinson]

I paid my mortgage off in 1995 and lived it up a bit (aged 34) then bought more properties in 2006.
Just about a gentleman of leisure now. I've never owned a share of anything.

[Metalhead_D]

Great video as ever, Pete. Thank you for all the advice over so many years. Really helped me sort out my finances several years ago by introducing the Ramsey baby steps. Keep up the good work

[tinanolan]

I paid mine off 10 years early threw the best part of my salary to it for 2.5 years to be debt free. Best thing I ever did.

[andrewcumming]

Great video Pete. Although we paid off our mortgage nearly 15 years ago. The trick we used was a variation of overpayment, our lender only allowed a 10% over pay every year. So every year we set the amount we wanted to pay (including the 10%) and went to the lender as asked to reduce the term to match our payments. We went from a 20 year mortgage to 18, years, 15 years, 8 years, 5 years after that we were lucky to get a good bonus and cleared the mortgage after only 6 years will no fees

[tonks]

Thanks Pete. Useful video and perfect timing. Many thanks for helping me consider approaching financial choice from a slightly different viewpoint.

[adrianmortimer]

Many thanks Pete, once again sensible advice in these strange times.

[RB-odnd]

Thanks Pete. Pleased you are on the mend.

[ETFAnalyzer]

Another great video Pete. My strategy is: for every £100, overpay my mortgage by £10 and invest the rest into a stocks and shares ISA.

[nilaramin]

First timer watching ur video. Thought it was excellent, very clear and informative. Thank you! I’ve subscribed now!

[hooksforestchin]

Excellent as ever, Pete. Have the advantage of an offset mortgage and this has helped convince me that putting the extra into an offset pot where it's still accessible is the right approach.

[Chris-oceb]

Another brilliant video, thankyou Pete. Keep up the good work👍🏻

[kevinpreston]

Hey Pete. Welcome back. Glad you’re feeling better.
When it comes to property I’m old school; securing the roof over your head is a priority.
Before he passed away my dad was forced to move in his 70’s from his privately rented bungalow because his landlord unexpectedly passed away and the beneficiaries of the estate wanted the cash. He found moving really stressful at that time of his life.
The sad thing is that my dad once owned his own property but decided to sell it and use the money to supplement his pension income, something I’m not sure he had to do!

[guyr]

Hi Pete, a very timely update. I’m 63 with 11 years left on our mortgage, moved 6 years ago taking on a 17 year mortgage at 2.19%. We overpaid on this and I was paying larger amounts into my pension as I was earning well ( for me anyway) and bonuses etc split between treats, pension and mortgage. I remortgaged just as rates started to rise 5 years at 1.29%, but importantly our over payments meant we only owed half of the original amount, net result payment was £370 a month less. Needed to do this as lost job in covid and new job 50% of previous salary.
So when you look at overpaying it has a second advantage in reducing your payments as the mount being borrowed is lower than the original loan.
My wife’s contribution is used as an overpayment, so when we retire we could either pay it off or just keep the mortgage going ( very likely) and use our pension cash to enjoy our lives.
The funds I freed up by reducing the mortgage payment I invest but into my pension as every £1 I put in I get £1.25 into my pension pot, that gain beats any thing else out there and as I am Only a few years away from retirement.
While my interest rate is so low on the mortgage every £ overpaid is almost taking a pound of the capital amount. As you showed paying the mortgage off early and then investing all of the now free cash builds up very quickly.

[trevorpritchard]

Excellent as always and your last comment hit nail on head 😂…..I do both ❤️

[mbarn]

Always appreciate your emotion consideration. I get the 20 year comparison but I personally stick to the predicable, and that’s my fixed rate mortgage period.

[ianwall]

Great video. On point your didn't discuss is pension tax relief. If you are few years from retirement - the invest option is much stronger especially if you are 40, % tax payer.

[Atticus]

Good video, as always. The increase in electric/gas bills of 100% has wiped out majority of my disposable income. Hope you are on the mend health wise.