Should You Pay Off Your Mortgage Early in 2024?

Paying off your mortgage sounds like a dream come true, right? Especially if you can pay it off early. Some people choose to overpay their mortgage, i.e. make extra payments. This means they pay less interest overall, and the mortgage gets paid off sooner, leading to greater financial freedom. But are there any downsides to paying off your mortgage? Let’s take a look at the advantages and disadvantages of paying off your mortgage early.

Table of Contents

What does overpaying your mortgage mean?

Should you pay off your mortgage early?

Is there a penalty for paying your mortgage off early?

Advantages and disadvantages of paying off your mortgage in the UK

What happens when you pay off your mortgage?

What Does Overpaying Your Mortgage Mean?

The mortgage lender will set a minimum amount that must be paid off every month. Overpaying your mortgage means that you pay more towards it than the pre-agreed amount. You can overpay on your mortgage by:

Paying extra on your monthly mortgage payments
Reducing your mortgage term and paying more each month
A one-off lump sum

Some people choose a combination of these options, increasing their monthly payments and a one-off payment. Most mortgage lenders will have a maximum limit on how much extra you can pay off. This is usually 10% of the entire mortgage amount per year.

FAQ: Will paying off my mortgage early affect my credit score?

A house is usually a lot larger than a maisonette, although, like houses, maisonettes have a separate entrance not shared with others. Maisonettes are smaller than houses and will not have more than two bedrooms, whereas houses can have multiple bedrooms. Houses are purpose-built, but a maisonette can be converted from another type of building to a living space. Maisonettes are normally cheaper to buy than houses.

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Is It Better To Invest In Flats?

It sound almost like the best of both worlds – they have the relative affordability of flats but with the privacy and extra amenities of a house. Maisonettes are not quite as popular as ‘luxury apartment’ style flats, so they can often be even more affordable than a flat in a similar location. While leasehold maisonettes are subject to ground rent, there are usually no service charges due to the lack of common areas that you get in flats. There are pros and cons listed below, as with any type of property, but a maisonette could be a really smart choice for a savvy investor.

Pros And Cons

For the reasons mentioned above, a maisonette can be a great investment, especially in desirable suburban areas. Just be sure to look into the property itself to find out the length of the leasehold, as this can make it tough to obtain a mortgage. Check out the ground rent too, as this can cut into your profits and affect your ability to sell the property later on.

Are you interested in property investment? Whether you want to invest in flats, maisonettes, houses or commercial properties, AFL is here to help – check out our upcoming property investment summits here.