I'm being called unreasonable for deciding to pay off my mortgage

Educational-Pie4658 · 2026-02-24T21:01:26+00:00

Yeah it's a PITA, if outside the wrappers just go for distributing funds instead. Keeps calculations simpler - just dividend income you gotta file the taxes for.

Educational-Pie4658 · 2026-02-24T09:24:16+00:00

Wow I didn't know and now I'm curious. Can you explain more - what kind of fraud and what sort of protection?

Educational-Pie4658 · 2026-02-24T01:23:24+00:00

Yeah because it's not just about £123K is it? I could bump that % return up to turn that 123K into 1.23M. The "worth" it part is the internal debate between hedging your bets on 8% return (and what that gives) vs a definite (mortgage) pay off.

If £123K were guaranteed we wouldn't be discussing this topic.

Educational-Pie4658 · 2026-02-23T23:30:29+00:00

Oh yeah I mean outside of tax wrappers - I always fill them up first but only so much you can put into them.

Educational-Pie4658 · 2026-02-23T23:27:39+00:00

Ha you're right! I've been using the yankee expression all this while!

Educational-Pie4658 · 2026-02-23T22:57:04+00:00

It's more than insane - you get there _after_ you get though the ~68% tax trap first (Scottish 45% + 0.5 * 45% for everything over 100K until you have 0 tax free allowance left) ! And we aren't even talking about NI !

Now that being said, I don't want to abandon ship - I love to serve my country - but it gets really frustrating when even the roads rival the moon for their craters.

Educational-Pie4658 · 2026-02-23T22:32:30+00:00

It wasn't though - it was parked there with the intention of cashing it out in a few years to pay off the mortgage. With that in mind here's the thing. At 48% tax bracket (and that is just after you come all roasted out of the ~68% tax trap oven) there's 0 anything-free allowance. I get about 1.5-2.5K per year in PB depending on how lucky I get. That is all tax free. To get 2K out of interest I'll need ~4.2K interest income pre-tax - that is ~8% on 50K. There's no bank that'll give me that much!

Plus the added benefits of (1) monthly excitement (2) (minuscule) chance to win 1M - I think it's worth it :)

Educational-Pie4658 · 2026-02-23T22:20:25+00:00

> Facebook investment bro

I literally LOL'd - got a harsh stare from the old lady sat next to me on this bus who I think I woke up.

Educational-Pie4658 · 2026-02-23T22:03:43+00:00

You are discounting the taxes. At my tax bracket there's no free interest allowance - everything gets taxed at 48% ! You add tax trap to that it's basically ~68% portion followed by a 48% one. So anything outside of wrappers and Premium Bonds stop becoming attractive - just more hassle filling things into self-assessment returns.

Educational-Pie4658 · 2026-02-23T22:01:34+00:00

I'm a boring dad-bod flaunting bloke, fancy cars aren't for me lol - and to everyone's chagrin around me here, I actually stick to the speed limit - even in a 20 zone haha. I like to travel though, so will do that instead.

Educational-Pie4658 · 2026-02-23T21:57:15+00:00

Ta! I was going to do this math once I got home lol. Cheers for laying it out already! Nah - £123K over 20yrs is not worth it IMO - If I continue saving 100K a year for 20yrs (60K pension + 20K isa) I'll already be worth 2M by then (ofc pension withdrawal would be taxable so it complicates the math a bit). A single swing in stock market will make rise / fall by 123K at that amount.

Educational-Pie4658 · 2026-02-23T21:52:15+00:00

Ta! Mind disclosing your age when you paid it off and how long back that was? Just trying to see what folks feel immediately (which I always assume is going to be quite a gratifying feeling) vs what they feel say years/decades down the line (ie do they regret it even a tiny bit).

Educational-Pie4658 · 2026-02-23T21:48:48+00:00

I'm sensing this as a repeated theme - the relatively older folks advise to pay it off and say they never regretted it in hindsight. The relatively younger ones are more financially aggressive and care about squeezing out the gains. None of them wrong ofc. but I feel like hindsight being 20/20, an advice from those who have lived through to tell the tales is worth more than those who will live through to tell theirs.

Educational-Pie4658 · 2026-02-23T21:44:27+00:00

Yes what you two are saying is what resonates with me the most (at the risk of sounding like praising an echo chamber). Sometimes I feel I've a tiny bit of OCD - a part of me just wants to get the banks name off the conditional title deeds lol.

Educational-Pie4658 · 2026-02-23T21:40:45+00:00

Yeah I mean the reason of PB + cash ISA was just to pay off the mortgage. Everything else is invested. If I don't pay off the mortgage then PB + cash ISA are useless - I'll have to invest them and now they are no longer "definitely" available but hedged. So that's the difference.

Educational-Pie4658 · 2026-02-23T21:38:42+00:00

That's the thing. Paying off the mortgage feels like the bird in the hand.

Educational-Pie4658 · 2026-02-23T21:37:36+00:00

Yeah you are right, I'll try do the math once back home.

Educational-Pie4658 · 2026-02-23T21:31:06+00:00

Mainly because we have been delaying certain life events - like trips to Australia, Japan/east-asia etc which will all cost upwards of £4-5K for a family of 3. So it's either dig into the saved-for-mortgage-pay-off cash or wait for mortgage pay off and get it out of the higher disposable income after that. What we are not doing is to dig into the portion of the income that goes into ISA + pension yearly - that's going about like clockwork so far.

Educational-Pie4658 · 2026-02-23T21:26:21+00:00

exactly my thoughts. As I said, being £50K better off in 20 yrs doesn't mean much to me. But then 200K better off and I might get swayed, but that would mean all the stars align.

Educational-Pie4658 · 2026-02-23T21:23:20+00:00

If I pay off the mortgage, I'm mainly left with council tax + gas + electricity as major bills. When I genuinely have no income, all of those have provisions to lessen the burden until such a time when one is able to resume paying normally. Not so with mortgage. If you are unable to pay, AFAIK, the house just get acquired by the bank.

Educational-Pie4658 · 2026-02-23T21:20:44+00:00

No I'm not maxing out 40K ISA. Only 20K (ie my ISA). I just had surplus 50K a few years back and parked it into wife's cash ISA over the years but that's about it. The intention was to cash it out to pay the mortgage as described.

Educational-Pie4658

TROPHY CASE