Pay Off Mortgage or Invest? The SMARTER Move, Explained with Maths

[@TheHumblePenny]

Share this with others :). What are you focusing on? Overpaying mortgage vs Investing? or both? and Why? comment below ⬇. Want a blog post version to read later? Read it here thehumblepenny.com/pay-off-mortgage-or-invest/

[@amakachukwu9196]

Happy new year Ken and Mary I can’t thank you both enough for the information you have been sharing on this platform. I started investing 7 years ago after watching Ken’s video about investing with vanguard. Bought my house in 2022 and have been making overpayment. My dream is to be mortgage free in future as you guys. Thank you very much for taking your time to share your story. May God continue to bless and protect you all 🙏🙏🙏

[@TheHumblePenny]

​@amakachukwu9196 awww amazing. Thanks so much ❤

[@TheCompoundingInvestor]

Like yourselves, I decided to pay the mortgage off first as quickly as possible and then start investing into the stock market. As you say it is a guaranteed result and I prefer to fight one battle at a time. By being debt free I then had more more funds each month to invest with and could then concentrate on this one pursuit. Really useful video and thanks for sharing.

[@TheHumblePenny]

You're absolutely welcome. Do share it with others 😊.

[@jordanmitchell9742]

Then you’ll miss out on investment opportunities that could help pay off ur debt it he first place. Some people take YEARS to pay off debt like decades by then it’s too damn late. I say do both.

[@TheCompoundingInvestor]

@@jordanmitchell9742 Investment success is not guaranteed and in a sustained bear market you may regret not getting rid of perhaps the biggest debt of your life. Paying down the mortgage has a guaranteed outcome.

[@ifunanyandive8609]

@@jordanmitchell9742exactly. Because time and power of compounding is the key thing in stocks

[@callumfox2919]

We’re overpaying heavily on our mortgage. Originally would have ended when we were 65, but will be cleared by about 40/41 (am 35 at the moment). The best bit is we will save approx £200k in interest !! & get about 25 years of financial freedom !

[@TheHumblePenny]

Wowza! How much was the original mortgage amount?

[@tomm8428]

Did you take a 40 year mortgage?

[@kenbirkpresents]

Interesting, but fir context how long was your initial mortgage term?

[@callumfox2919]

@@kenbirkpresents was originally 35 years, but will be cleared in 8-10 years (or possibly less) 🤞!

[@keji5848]

I’m in my 50’s and got my mortgage in my late 40’s due to my family circumstances as a single parent. I’m currently doing both. Trying to overpay my mortgage and investing at the same time. I prefer to be mortgage and debt free before my retirement. I set goals for myself and have all the right insurance. Listening to you both is an icing on the cake, thanks for the inspiration xx

[@TheHumblePenny]

Thank you, Keji ❤️. You're on the right track.

[@BenKershaw-c5w]

I paid my mortage off in july at 35 years old. Jacked my stressfull job in and took 4 days a week job.

[@TheHumblePenny]

Nice!! How long did it take you to pay off?

[@BenKershaw-c5w]

​@@TheHumblePennyhia, it took 5 years but ive been grafting and saving since 20 year old.

[@CocoYazmin07]

Wow that is amazing well done! Now you can enjoy work and save for retirement at the same time😅

[@mphocollenmaaboyi4215]

Amazing

[@brandontownsley6763]

Great video. I’m personally doing both. I’m splitting my money 60/40 between the mortgage and investments and on track to shave 15 years off my term which feels fantastic

[@TheHumblePenny]

Good stuff! Love the split. What's your biggest reason why you want to be mortgage free?

[@brandontownsley6763]

⁠Freedom ❤ The borrower is slave to the lender and I don’t want to be a slave to the bank. When the mortgage is paid off I’m going to use my mortgage payments to turbo charge my financial freedom fund.

[@TheHumblePenny]

​@@brandontownsley6763❤

[@Motivated_Idiot]

It is a great video but when looking at a mortgage I always look at inflation against interest. Basically if you have interest at 5% and inflation at 5%, the inflation would be wiping out your interest. It would surely be better to only pay the minimum amount of mortgage and invest the extra in Index funds or ETFs. Overall I'd say if inflation is high it's not worth paying extra into the mortgage if inflation is low it probably is.

[@darrenc5622]

I have reduced my 340k mortgage to 90k, but now rather than directly overpaying into the mortgage I am paying spare money into premium bonds up until my fix ends and then I shall lump sum into the mortgage when it is time to fix a new deal, that way I can hopefully earn a little extra on top before it goes on the mortgage and get the best of both worlds. Aiming to be mortgage free by 35.

[@TheHumblePenny]

Love that 👏🏾👏🏾

[@BIG2hats]

Hell no, investing offers far more than premium bond could ever!

[@zoetoudj]

I bought my house when I was 23 and it’s coming up to 2years now. I’m currently paying off my mortgage and also investing into index funds & have emergency fund. This video really helps as I’m considering overpaying my mortgage by £200-300pm, however I’m a lot more keen to invest more rn. Definitely something to think about this year, thank you 🙏🏽

[@TheHumblePenny]

Thanks, Zo! Congrats on your house purchase. We'll check out your travel vlogs. They look fun :)

[@lanreadigun5682]

This is how you know a real investment professional/Management Accountant...i enjoyed the Analysis and presentation of the case scenarios

[@TheHumblePenny]

Glad you enjoyed it 😊. We wanted to create something people would enjoy watching and learn from. Do share with others.

[@Ngozi.H]

I don't know how I got your video on my KZbin feed but I can't stop watching your videos since I came across your channel. Very educative. Thank you

[@TheHumblePenny]

Brilliant ❤️. Do subscribe and share our videos with your friends and family.

[@elianasimeonexox]

What is the best stock market investment? And do you help or guide one regarding stock market investment?

[@TheHumblePenny]

Yes, please book a Power Session with us here if you want 121 coaching thehumblepenny.com/coaching

[@nicolaskesington449]

thank you so much for the video and info, i have a mortgage and what i did is i opened an offset account, i put all my savings and had my salary paid into this account which helped reduce the amount of interest , i also paid my mortgage weekly, which meant that i made one extra payment a year which lead to reduce interest payment and finally the money i would have used to make overpayment on the mortgage, instead i invested in the US stock market in etf like SPYI,SVOL which returns over 10% return, therefore i will use the return in 30 years to repay whatever i am owing

[@noizymoney7067]

One thing to consider is that most lenders only allow overpayments of up to 10% of the mortgage balance without penalties. So at one point the £500 overpayments may lead to penalties that need to be factored in.

[@mbya777]

Penalties are actually not that high in it just sounds it.

[@TheHumblePenny]

Good point. However, how we got around this was to remortgage to a product without the Early Repayment Charges. They exist and offered by high Street lenders but via mortgage brokers. Doing this gave us the freedom to overpay by any amount.

[@shazav9776]

@@TheHumblePennyit’s so good to know this , I currently overpay a small amount due to fear of penalties. Thank you

[@daxter224]

Some overpayment caps are based on the original loan amount and not on the outstanding balance so you can keep hitting the 10% cap even as your balance drops which means greater acceleration towards clearing it. Check with lender. We are with Nationwide which is based on 10% of the original loan amount per year

[@jenniferroberts8697]

Hi there - we're doing a mixture of both, but it's 90/10 between mortgage and investments. We have enough funds in our premium bonds to pay off the mortgage, but our fixed rate deal ends next year. In two minds whether to pay the 1% ERC and know that we're debt free...

[@TheHumblePenny]

I'd avoid the ERC. Money down the drain.

[@paddyk5357]

Both overpay plus invest

[@TheHumblePenny]

Cool 👍🏾

[@gingersergio8046]

Good advise.

[@cryptofpl]

Doing both

[@TheHumblePenny]

👍🏾

[@MrSebastianBlake]

Hey guys. I’m lucky I followed your channels years back and bought a smaller house £100k so now I rent the other room and invest in stocks but I think I’m gonna have to do both so that I can pay off the home quicker and invest more

[@TheHumblePenny]

Result! Great to see you making money from renting out a room.

[@damitiamiyu8969]

Saving for a house and investing. Thank you ❤

[@TheHumblePenny]

🙌🏾

[@musariololade2204]

if the total portfolio value under the investment option is 153k. You should note that this includes the principal + capital gain + dividends. Hence the amount that should be compared with the interest saved from the mortgage option (73k) should only be the capital gain and dividend net of taxes, I would suggest you revise the calculations

[@ildikojakab6866]

Great video Ken and Mary. Thanks for sharing. Following your channel a few years back, I took your advice and started to owerpay my mortgage from the beginning 2 years ago. 2 more years left for fixed rate. My aim is to overpay the biggest chunk or all. This is my N1 priority now. Instead of 18 years I will pay back my mortgage for 5 years and then concentrate for my savings for retirement. Now I manage to invest about 20% to the stocks and shares. God bless and Happy New year to you.

[@TheHumblePenny]

Wow, love the progress 👏🏾👏🏾. God bless 🙏🏾

[@JermaineChandra]

Great video! I’m 42 and focusing on paying off my second mortgage (family home) target date Dec 2025, but plan to leave a small amount (circa £5k) so I can maintain access to equity in case it’s needed. I purposely opted for a tracker mortgage with a higher interest rate in the short term so that I could avoid any overpayment cap. I plan to invest aggressively after this milestone is hit using the rental return on the first property plus other streams of income.

[@TheHumblePenny]

Hi Jermaine Good move! Thanks for sharing 👍🏾

[@tolu8021]

Another thing that might be worth mentioning is in a situation where someone can't work, they might be ineligible for government support if they have high liquidity.

[@TheHumblePenny]

True. But which would you rather have? High liquidity or uncertain government support?

[@abundancemindset777]

Great timing; I'm about to buy and get a promotion at work. I plan to pit the surplus from the salary increase into index funds, continue to save and put that amount down after the initial fixed term ends. Thanks for this video

[@TheHumblePenny]

Great stuff. Congrats 👍🏾

[@tumelojonas3601]

I am risk averse, as we have seen with the Corona Virus outbreak, anything can happen at any time. For times like that, I want to be carrying as little financial risk as possible. Thanks for the video

[@TheHumblePenny]

We hear you 💯

[@HumbleFamilyTravels]

My focus is growing my property portfolio by refinancing out equity into cash. For next purchases using more leverage for faster ROC.

[@TheHumblePenny]

Thanks for sharing. How are you dealing with the additional 5% stamp duty on 2nd homes?

[@hollypepper2618]

This is the first video of yours I’ve watched, thank you so much! I’ll definitely be watching more! Had a financial scare this year with a toddler and a baby on the way. I’ve suddenly realised how important it is for us to have some available money but I also want to feel my family is secure in our home so I’ve been so torn! My current goal is to get my savings and investments up to a more comfortable place then after that switch focus to paying off my mortgage more aggressively. This video is so helpful because it isn’t just the finances that matter, it’s the security! Thank you

[@TheHumblePenny]

Hi Holly, thanks a lot for watching. Sorry to hear about the financial scare. It's interesting to read how this is shaping your decisions. I've also seen people have health scares that has also made them re-assess what's most important to them. Glad you found our video helpful. Do share it with others. Happy Friday 😊

[@Gracebarm]

Great video ! Currently doing a bit of both. But being mortgage free is my number one priority!

[@TheHumblePenny]

You can do it! Best thing ever for us.

[@slimfreddyk]

Great video. I am doing both. Been investing since 2017 and have a mortgage for 13 years. Can’t use the money from the stocks as they are mature now and can fight any big downturns. My mortgage is not much and I put overpayments to control it so u have more for other stuff in life.

[@TheHumblePenny]

Great plan 👍🏾

[@eimienwanlanibhagui4859]

This was the path Morgan Housel, author of The Psychology of Money, followed. He said paying off his mortgage did not make any logical/mathematical sense looking at the figures/numbers on a spreadsheet; he was aware of the argument against such move. However, according to Morgan, the "psychological comfort" it gave him was precious. To hear him, check out The Diary of A CEO. The anchor, Steve, is a Manchester-based KZbinr (features in Dragons' Den - the UK version of Shark Tank). @The Humble Penny, please can you provide the link to the Harvard study you referenced? Some of us like to look at the source 🙂. Great video, by the way!

[@monikaschmitt3604]

We are still finding our way through all this. I think the most important thing is to do something, be active and do not just sit and think about it without any action. We overpaid 20% of our morgage so far but also invested in rental properties and save a lot on SIPs and ISAs but we now have to do an extension as the kids are growing and it looks like we will have to remorgage which is terrible but the chepeast option to improve our living conditions.

[@TheHumblePenny]

Thank you for sharing 😀

[@Funmiloves]

Thank you both for yet another great video! Our focus for 2025 is to start over paying the mortgage again.... Already set up the standing order for a small amount, main thing is to get started.

[@TheHumblePenny]

Absolutely 💯

[@adeblessedofficial]

Hi Guys, just a quick question please. Regarding your example of Overpayment (5%) vs Investment (8%), it seems that you will save much more money with the investments route. However, and I might have missed this, if you only invest for the period of the mortgage, you will then not have reduced the length of the mortgage, and as such would be paying the full mortgage interest of £150k from the investment profit of £153k which leaves only £3k gross….. In addition, you did not discuss the tax payable on the investment of £153k. Please note that I am a fan, but just want you to explain this

[@TheHumblePenny]

While investing, that person would still be paying their mortgage as normal. They'll just not be overpaying. As such, they'll be gradually reducing capital + interest but not as aggressively as the person who will be overpaying. Given they chose to invest in stocks with their extra £500m a month, they'll still have their mortgage not fully paid and could carry on paying it down gradually, OR may choose to use some of their stock market profits to pay it off. Re tax on the investment, if invested via an ISA, e.g. stocks and shares ISA, there is no tax payable on gains. If invested outside of that, e.g. a General Investing Account, they'll have Capital Gains Tax due on profits.

[@adeblessedofficial]

@ Thanks Ken. Since the person is paying the mortgage as normal, the interest payable after the term would be (in this example) £150k against the profit from investment of £153k ? Honestly, the case of overpayment vs investment has never been an easy one to decide…… With overpayment, at least, you know where you stand 🙏 Happy New Year to you, Mary and the family

[@martinmowbray4304]

I do both. Invest and overpay .

[@TheHumblePenny]

Great 👍🏾

[@StockPickersAcademy]

Great video I was working with one of my clients on this choice. My bias prefers investing in the stock market - you can also sell the stocks and pay off the mortgage earlier if the psychological aspect of paying off your mortgage is a lot. I also work to coach people’s mindsets which has helped some shift into new mindsets a lot of people who are risk averse comes from a place of unresolved past trauma of having little or nothing it’s a complex topic and each person is different.

[@TheHumblePenny]

Thank you! Unresolved past trauma is a huge topic. Thanks for watching :)

[@gav2302]

Ideally I’d like to do a bit of both. Something you never mentioned was the additional factors of lifetime ISA and pension investments which can bump up the investment fund and make the returns on that part even better. Obviously there’s an age factor to consider there but maybe some people’s circumstances will see them be able to tie this in with making it work for them. I can access my pension in less than 20 years so targeting the 25% tax free lump sum as a way of clearing the mortgage once funds had been saved into there could be a huge factor and give the greatest financial outcome

[@TheHumblePenny]

Good point, but I fear they'll be coming for that 25% tax free and taking it away eventually or reducing it. I also think the ISA is an obvious target in some way. However for those who can, the Lifetime ISA offers an extra boost for sure and so can the pension via tax relief (although mostly taxable later).

[@leanneminton3969]

Great video, I am currently finishing building my emergency fund, then going to overpay on morgage, any bonus and pay rise will also go straight to morgage. Want it gone in 10 years or under.

[@TheHumblePenny]

What's your biggest motivation?

[@DafyddMorse]

I invested in two rental properties which covers my mortgage payments so that gives me flexibility to work less/pursue creative endeavours. I sleep better knowing that maths is on my side!

[@TheHumblePenny]

Nice! What strategy are you doing rentals with? Are they in the UK?

[@DafyddMorse]

@ yes indeed. Just two vanilla BTL in Cardiff. Rental demand is high so I'm glad to be providing housing for those that need it. Strategy is slow, buy and hold. Wait for the value to go up. Refinance. Pull out tax free equity. Then you end up with infinite return on investment!

[@nataliequansah]

I decided on this plan too to give me the flexibility of deciding when I can go back to work after having a child. I need the cashflow sooner for that reason but paying off the home is also in the plans within the next 10 years! My mortgage began November 2023 but I definitely don’t want to wait 30 years to pay it off

[@DafyddMorse]

@@nataliequansah it's the best of both worlds. It's like not having a mortgage payment but you've got 3 properties going up in value. ⬆️⬆️⬆️

[@markkingproperties2237]

Since I turned 50 (almost 6 years ago) paying off my mortgage became a priority, I have a successful property development business so have tried to keep capital within it, suddenly I started to see similar aged friends and acquaintances have life changing and sadly sometimes ending events. Thoughts of legacy came into play, how would my wife live without me around or unable to work at the same pace or at all. My own view is there’s a point where you need to get out of servicing debt, I’ve paid near double my mortgage payments for the last 3-4 years and it’s hugely reduced the term remaining, ( didn’t see increase in basic payment when rates reset)also having observed my late parents do the same it allows you to stay in the home you’re accustomed to in retirement without forcing an unwanted relocation.

[@TheHumblePenny]

Mark, this is one of the most interesting comments so far on our video. Thank you for sharing so generously about your lived experience and those of your loved ones. Please comment more often. We appreciate it.

[@markkingproperties2237]

@@TheHumblePennythank you for your kind comments, I’ve been following you for some time and appreciate the time you take to present well considered, balanced views on your subject matter.

[@Kenny8O]

Fantastic presentation with so much clarity. I’ve saved this video for reference purposes though I plan to watch it again with my pen and notebook. It feels truly practical, many thanks Ken and Mary.

[@TheHumblePenny]

You're welcome 😊. Do share with others.

[@charlie.1001.]

Great vid, I think I went about it slightly different. I first built my investment portfolio to a substantial amount getting annual returns accumulated back in and then started again saving for my property. I see the investment and interest growth of my portfolio as contingency (peace of mind) for larger debts like mortgages, but ultimately it’s doesn’t need to be touched. Cons meant that joining the property market abit later but pro was that my money has been working a lot earlier than it would have if I bought the property first and still does while paying the mortgage.

[@TheHumblePenny]

Great 👍🏾. Over how many years did you build up your portfolio?

[@OyediranOjo]

BOTH

[@krdankers1]

@thehumblepenny out of curiosity. What was your mortgage percentage and if was higher/lower would that have impacted your decision to pay off your mortgage early?

[@TheHumblePenny]

We paid off when base interest rates were lowest. Highest was 5.99%, lowest was around 1.49%. Logically, it made no sense to pay off if you only looked at the Maths. But that wasn't our only focus. We focused on our WHY, and a big part of it was mortgage freedom for many reasons. No matter the rates, we were still going to pay off the mortgage. Zero regrets.

[@kindkindling]

In the USA the battle is won with the interest rate and the price of the house. Don't buy the most expensive house the bank will let you have and know the local government. Whether you pay your house off or not it can still be taken away if you can't pay the taxes.

[@dalereid4199]

You two levelled up again this video was too good

[@TheHumblePenny]

It took a lot of work, so we're grateful that you recognised that. Thank you 😊. Do share it with others.

[@SheltonMagunje]

Brilliant! What do you think of the idea of not buying a house at all & just rent & invest? Cost of ownership

[@TheHumblePenny]

Please watch this kzbin.info/www/bejne/q5TYf6ONgN6iftE

[@andymcall1986]

Hey guys. I wondered why the audio quality on some of your videos falls a bit short? Your content and delivery is fantastic so seems odd the audio is sometimes echoy and distant... New mics and some acoustic foam needed?

[@TheHumblePenny]

We appreciate the feedback. On 2 occasions in this video, we had to add external audio recorded on our phone to make an additional point. That might have been the issue. However, we will look into this and change things up.

[@maameyaatutu]

A bit of both. I’m just glad I came across your channel last year ❤. Lots to learn from you guys

[@TheHumblePenny]

Awesome! Thank you! Please share this video with others.

[@dainteej]

I wanna do both they are both achievable and important also invest for your loss too

[@TheHumblePenny]

👍🏾

[@ukemeobongetuk2667]

Please what investment can i invest in

[@TheHumblePenny]

Please read week 7 of our book Financial Joy 📕 geni.us/financialjoy. Obviously, read the whole book. However, week 7 (of 10) is focused fully on Investing and answers your question and so much more.

[@ukemeobongetuk2667]

@@TheHumblePenny thanks so much sis

[@ukemeobongetuk2667]

@@TheHumblePenny thanks.i will get it.

[@its_sheshe5289]

Thank u for this

[@TheHumblePenny]

You are welcome. What are you focusing on from the video?

[@camtip57z48]

Thanks for the video, always interesting to hear your thoughts about it. Quick remark on the sleep factor you mention, I have seen many times ppl having paid their mortgages facing dramatic situations when the unexpected happened (floods, storms, fire…). Then you have to deal with insurers for weeks, months or years to be able to recover. Since they owned, they had to deal with relocating and managing their property at the same time. I can tell you they didn’t sleep well even though the mortgage was paid off. Ppl who were renting “only” had to move their stuff and move on. So I don’t really agree with that point.

[@rajinthanrasiah3236]

I presume the total value of the investment includes the £500 invested each month. Whereas the interest saves doesn't include this. So would I be right in saying if you pay your mortgage off earlier then not only do you save interest but you have saved that £500 each month in property wealth?!

[@TheHumblePenny]

Yes, this is correct. Except you can't access it within your home in the same way you can access it within an ISA, for example.

[@stephendevitt472]

Hi great video once again. Was just overpaying the mortgage. From this year following your insights 50% on mortgage overpayment and 50% ETP's and SIP. All the best and Happy New Year

[@TheHumblePenny]

Thanks for sharing! Happy New year

[@toniaukaegbu6202]

I plan to do both

[@TheHumblePenny]

👍🏾

[@fayolasaunders6342]

This is super useful information, thank you

[@TheHumblePenny]

Glad it was helpful! Do share with others

[@a.n.t-star8129]

Where do think is a good place to buy a house near London but not in London.

[@TheHumblePenny]

Watch these two videos about Commuter towns: kzbin.info/www/bejne/fnLXe2qXgcigoacsi=sjDzRQ0wGgNvAbMO And kzbin.info/www/bejne/qJDcemaEebGfkMUsi=fCX0uIbZc_ciP0AY

[@a.n.t-star8129]

@ ok thx

[@at8606]

Thanks for the great video, guys. We prioritised paying off our mortgage and was mortgage free at 38, which was a great feeling. However, investing is something I have only just come to (at 39). Hindsight is often a useless tool, however if I was doing it again and equipped with investing knowledge I would have probably taken a hybrid approach so that I was making the most of ISA allowances each year. I’ll be prioritising investing moving forwards to give me flexibility in the future. Thanks for all you do!

[@TheHumblePenny]

You're welcome. Thanks for sharing about your journey and lessons learned.

[@Dondaddyh]

Hi What’s the financial calculator your mentioning please? “I’d love that “ 😂 I’m thinking of selling of some of the Shares not in ISAand pensions to clear the mortgage, this now more likely due to tax increases on dividends and CGT🤔

[@rebirthed4674]

I am doing both. We’re on track to finish paying off our bond (mortgage) when we turn 40 which will be in 2030.

[@TheHumblePenny]

Wow only 5 years to go 👏🏾👏🏾

[@Athomewithjennie]

saving £500 in cash, over 13 years 11 months would amount to £83,500 and that's minus interest. however overpaying mortgage only saves you £73,000 in interest. so isn't it better to save in cash instead? I might be missing something pls reply. thanks

[@mphocollenmaaboyi4215]

I am currently doing both. I am 42 and I have had the mortgage for 4 year, I have set 2025 as the last year of doing both and from 2026 I will overpay on the mortgage, The target is to be mortgage free by age 48 or less while what I have invested in the stock market earns dividends and growth. Dividends are set to automatically re-invest.

[@TheHumblePenny]

If you're going full focus on the Mortgage and paying it off aggressively, it pays off. That's what we did.

[@sinkintostillness]

I think it is a head over heart thing. Financially it makes sense to be investing for as long as possible, but the sense of accomplishment, peace of mind and also the huge savings in interest when paying off mortgage early can't be beaten! It's joyful seeing that balance coming down quicker! I can't wait to get ours paid off! We are 10 years into a 25year term. Overpaying for the past 3 years. I think we can be done in 5 more years, so cutting 10years off!

[@laurabrown-v1p]

Hi Both 😊 i have a large mortgage on a fixed 2.3% rate for 7.5 years. My plan is to invest 1500 eavh month and then sell at the end of the mortgage term and pay the mortgage off fully. Other than a market downturn are there any other negatives to this? Thankyou 😊

[@TheHumblePenny]

This makes sense 😊

[@laurabrown-v1p]

Thankyou ​@TheHumblePenny for taking the time to respond. 😊

[@BlessedPetrel]

Blessed New Year Ken and Mary. Indeed, it's a blessing to have you both kick-starting us to this brilliant video to begin our year with. We're on track to being mortgage free whilst also investing at the same time. We've learnt a lot from your channel, and we've recommended your channel to our friends to follow. Continue God's work, and God bless your family 🙏🙌

[@TheHumblePenny]

Aww what a blessing your comment is 💖. Happy New Year 😊. Thanks for telling friends to follow our channel. We appreciate it. Glad you enjoyed this video, too. We wanted to start the year solidly with something that will give you and others answers and encouragement on the journey. God bless 🙏🏾

[@ThabiMnkandla]

Doing a bit if both....

[@TheHumblePenny]

Thanks for sharing 👍🏾

[@areyoutryingtosay]

The £153,511 includes £83,500 of invested cash. Not sure how you calculated the saved interest but it can't include the capital overpayments

[@SGIQ7]

Very true. More like £70k.

[@areyoutryingtosay]

@@SGIQ7 Numbers are blatantly wrong but still keep the misleading video up and still selling books, courses or whatever they sell. At least they don't delete our comments, I'm suprised youtube hasn't, it did my first two which were both polite

[@kayleighmoliver]

I'm currently investing in the stock market because of the liquidity of the asset and the returns. However, if I were in my long term home, I would consider also paying off the mortgage faster. But at this point I'm considering moving as early as next year. This move to a bigger house would mean a bigger mortgage so a bigger deposit will be needed. So having more cash would decrease the next mortgage I'll have to pay (I think!) but also, it'll give me more for all those extra little things around buying a home that you can only buy with cash.

[@aiwne]

Great video! However the paying off mortgage early only takes into account interest savings and not capital gain from the property during the 13 years... I think this is very important as this is also a return on your initial capital. Therefore bringing the return of the two options a lot closer.

[@TheHumblePenny]

Both options are gain capital over the 13 years. Remember, the person focusing on the stock market also has a house with a mortgage. They're just not making overpayments. Instead, investing in stocks (and paying mortgage as normal). So, they too will experience rise in property value. So that aspect is already comparable between the two scenarios.

[@NiftyThrifty675]

Would you recommend paying off your mortgage if it's NOT your forever home? I'm a first time buyer living in a flat, and considering if I should pay off my mortgage. (I also invest) Nice head tie Mary!

[@TheHumblePenny]

I wouldn't do that, personally. We did ours because it suits our needs and can be a forever home. Having said that, there are other reasons to overpay your mortgage e.g. to improve Loan To Value and get a better mortgage rate when you remortgage.

[@nixi7688]

I have thought about this. My current home is a first time buy but it's not the 'dream home' and i think ill be here 5-10 years max. It wasn't that expensive and my monthly mortgage repayment is less than £300 a month. I might over pay a little in case of emergency and to try to knock it down by another £100 or so by the time I remortgage but I think Im better investing for now. As long as I take care of it will be sold in anyway and I'll probably have more than enough invested for something much nicer. If this was my dream home where I wanted to spend the rest of my days the answer would be different.

[@TheHumblePenny]

Makes total sense.

[@evilzzzability]

Invest. But ONLY if you know you have the temperament to see out a long term plan and are able to stick with the strategy through the ups and downs. Unfortunately many people with poor temperament will decide to invest but then crap their pants and liquidate at the bottom of the next bear market. My general advice if I didn't know anything about someone would be to do both - invest in your pension first so that your retirement fund is on track, then if you have spare money left over you can choose to put some of it towards the mortgage overpayments To turn one of your points on its head entirely, I think very few people appreciate that holding a mortgage is itself a hedge against local currency depreciation.

[@hypersynesthesia]

This year I'm splitting it three ways. In recent years I've made sure to pay extra on my mortgage, and I want to increase that slightly this year; likewise with my investments which I've worked hard to grow. I also worked hard to build my emergency fund. I see a lot of financial volatility in the world; strong stock markets aren't endless. Political upheaval could play a part. DT in the White House again and his obsession with tariffs could play havoc with the US economy (where so much of my index fund is invested) and hit other economies around the world. I also see the BRICS fun coming down the line (which politically I support - happy to see the potential for power distribution!) - it may not impact things yet, but either way: I live alone with a mortgage whose interest rate is about to climb, so there's no room for mistakes or disaster. That emergency fund needs to be bigger than in previous years. If my investments dip, I want the financial strength to hang in there til they climb again, rather than having to cash out at a loss. I plan to build up my cash ISA along with my investments and mortgage payments.

[@RachelCumberbatch]

Very informative well done! I wish I knew about investing sooner but only learnt about it in the last 3 years. We have been over paying our mortgage and was debating if to pay more into investments instead of increasing over payments (we knew that was the better option but as you say paying more off your mortgage can be mentally more pleasing 😂) so now I am happy to say we will both pay extra money into stocks and shares ISA on top of what we are over paying on our mortgage. We currently have a very low rate of 2.32% until 2027 so we can always reevaluate then!

[@TheHumblePenny]

Sounds like a good plan 😊

[@donpresh]

paying off is best!

[@nicolaskesington449]

i live in South Australia and it is great to find your video, i have now subscribe to your channel and would love to keep learning by watching your videos and i will love to share some of my investing ideas that i am now using to create generational wealth for me and my family, such example is i am now using the equity in my house to invest in the stock market and i am also using margin loan to increase my investing capacity and i am using the dividend payment to repay the loan

[@TheHumblePenny]

Hey 👋🏾. Thank you for watching from South Australia and subscribing, too!

[@robdan5432]

I mortgage is only 1.1%. Is it wise to overpay if it goes to say 5%?

[@TheHumblePenny]

That would make sense, yes. But, you'd need to factor in other things we mentioned in the video to decide.

[@kinggeoffrey3801]

Me and the wife are going 90% over paying the mortgage, with 10% investing. We want a platform to build from when the mortgage goes. We have 17.5k to go on the mortgage and should be gone by the end of the year. We will save around 160k in interest. No brainer. It feels great having a financial plan.

[@TheHumblePenny]

Wowza, you are so close! Watch what it does for your choices including career. One thing I'd say is, avoid lifestyle creep as best you can. Keep investing strongly but leave room to enjoy yourselves a bit more when you're mortgage, without going over the top.

[@ikennaasiegbu8441]

I believe doing both is the best. Good video

[@TheHumblePenny]

Thanks.

[@nataliequansah]

Thank you both for continuing to share such great wisdom for us to all think over. Not only is your content great but the comments from others is also amazing! I learn from both areas !😅 especially if I may not have as many friends/family in real life to discuss these topic with👌 What a great channel you guys have built🙂 Happy New and Blessed Year to you both x!

[@TheHumblePenny]

Thanks so much, Natalie 😊. Do share this video with others.

[@nataliequansah]

@@TheHumblePenny I'll definitely continue to do so ! :)

[@vaniacosta2657]

I would love a video like this but looking at student loans. I currently get over £500 taken of my monthly paycheck due to my undergrad and postgrad loan. Would love to know if I should focus in paying off the loan or invest.

[@TheHumblePenny]

Watch this space ✅️

[@smann7236]

What's your job and salary? It seems you're a high earner

[@vaniacosta2657]

@@smann7236I wouldn’t say high earner 🫣 I did recently breach the higher rate tax bracket

[@Indowaindowa]

Great video, Ken you always love what Mary says, that there is wisdom. We are currently investing only, but when it's time to buy a property (God willing) we would be doing both.

[@TheHumblePenny]

❤️❤️

[@6Gazz9]

Brilliant video as always Ken & Mary… Just something constructive - in the video there was a lot of FULL screen images covering your faces. It may be a good idea to pop yourself into a ‘picture in picture’ icon visible alongside the brilliant images you’re sharing! Keep up the good work!

[@TheHumblePenny]

Good suggestion. Thank you 😊. We did full screen as there is quite a lot of info. Next time, we'll mix it up

[@6Gazz9]

@ Full screen on the info is a great idea. Just thought popping a little circle of Picture in Picture with you guys on screen as well would’ve been a nice touch

[@jackbarber2697]

There are a lot of stuff said in the video that are not true. - When overpaying, banks usually have rules about this process, generally there're penalties for that - A house is not an asset but a liability because a house doesn't put money in your pocket, it takes it out (property tax, maintenance, insurance and so forth) - when computing the benefits of paying early, do you factor in the maintenance costs (surely you can stay in a house for 15 years and not fix stuff in it?), property tax, insurance and related costs? These add up and should be accounted for - Also, when presenting your numbers did you factor the opportunity costs of the downpayment? In your example a 10% downpayment will be 20000, if you invest that lump sum in the same scenario that you described then over 13 years, it will generate 36.340 in interests alone, so your 20k will become 56k, this costs should be added in your comparison all things being equal - In the UK, most mortgages are on the leasehold meaning that you don't owe the land on which your house stands so you are effectively renting that land from the State, this costs also should be mentioned - You rightly talk about the volatility of the market but the same can be said about the security of your job which, if lost, will hinder your ability to repay your mortgage - There is also the possibility of ending up with a negative equity on the home, this led to recent crashes like in 2008 - When passing down this house to your children, you need to mention the inheritance tax, this is very tricky

[@damme91]

Its better to keep paying the mortgage and use your free capital to make more money if you have abit of money in the bank as you will make more money in the long term investing. Why would you tie up capital when you can make it work better for you in the markets.

[@TheHumblePenny]

This is certainly an option. However, if you watched the whole video, you'll see that it depends on one's personal circumstances, goals and risk tolerance. For you, it's a no brainer. For others (see comments), clearly not. Other factors are pretty important to others.

[@Heathrobinson1999]

I do it all…max Sipp and max ISA and Max mortgage over payments…. Soon to be FIRE

[@TheHumblePenny]

Wow, nice!

[@alan4x]

you sir are a legend😊

[@TheHumblePenny]

👊🏾

[@damzon2wheels657]

50:50

[@Jeffybonbon]

There is no right or wrong its all to do with emotion The fact is you pay your Home mortgage out of taxed income and NI YOur also buying an home which may also fall into IHT bracket so Home ownership may not be wise in the long run but you have to live somewhere

[@flexy7317]

I am really interested in how to pay off mortgage in less than 8 years.

[@obiomaeduvie]

You just gain one subscriber. Just came across your channel.Weldone guys

[@TheHumblePenny]

Awesome, thank you!

[@yardofshe]

I just bought my first freehold flat at 28 and my goal is to be free of my mortgage ASAP so I don't HAVE to stick to a 9-5 if i don't want to :) I have stocks with my company and was unsure wether to cash out and put it all into my flat or a wider stock portfolio. Given my goal, this video has given me the confidence to pay down that mortgage!! I'll keep a lil stock cushion too... but my goal is to be rid of all debt ever. Thanks for the helpful breakdown :) Also, the lady in this (sorry idk ur name!) is absolutely gorgeous, stun-ning!

[@TheHumblePenny]

Thank you 😊. My name is Mary 💕. Congrats on your flat 👏🏾. Freehold? Interesting. Is it a maisonette? I haven't come across anyone with a freehold flat. Some people usually have the option of buying the freehold. What company do you hold shares with out of interest? 🤔

[@yardofshe]

​@@TheHumblePenny Mary! You're gorge, and thank you! ☺ It's a converted victorian house, the owner split it in two and made them two separate dwellings. I own 100% of my flat, the freehold has been split between the two flats and is sold alongside the purchase of each flat (both have now been purchased). I work at a FAANG company so I get equity & dividends annually/monthly.

[@TheHumblePenny]

Thank you 😊. Nice all round! I'd hold, personally, and not sell just yet given where you work. But you may have other reasons to sell.

[@yardofshe]

@ Thanks, I’ll defo keep this in mind! I used some for my flat and from there, I’ll see where I land :) Great video!

[@ellea2541]

Hapoy New Year to you and your family, Ken and Mary! May it be a healthy, joyful, peaceful and successful one. Potential What Would You Do? mini series relating to this video - case studies! Example: 37F, single, no kids or X kids, X% fixed mortgage interest rate with X year term, earning X (take-home per month to make it easier) and core monthly expenses of X. Currently £X in ISA and SIPP, wants to retire at X age or live abroad or pursue X goals within the next 10 yeats. What would you do and why? People could then not only see what you'd each do but also find out from the comments what others would do. (Obviously not financial advice but might be fun/interesting for those of us who are amateur financial advisors in our imaginations 😂)

[@TheHumblePenny]

Would you be the first one? 🤔 Happy New Year.

[@ellea2541]

@TheHumblePenny Ooooooo, exciting! I would be happy to - I'm currently 1-2 months from completing the purchase of my first flat so it would be interesting to know what people think my overpayment vs investing split should be!

[@StirUpYourPurpose]

Will say do both and for those who are savvy investors include options trading to juice up your portfolio.

[@selinamandula3679]

Any chance you arrange financial gameplans for individuals

[@TheHumblePenny]

Yes. Book a coaching session here: thehumblepenny.com/coaching You can either book "Financial Freedom Coaching" or a "Power Hour"

[@chrisriddell2800]

Love your content but don’t you think it’s about time to invest in a Mic? The sound quality of the videos is pretty bad

[@TheHumblePenny]

We do have a mic. We'll swap for another one. We appreciate the feedback.

[@chrisriddell2800]

@ sorry I wasn’t meaning to sound snooty. But I’m just comparing the sound quality to other channels who create similar content and the sound quality is definitely more clear. I still watched right to the end 👍🏻

[@clarenceishmael9615]

I had no choice but to pay off my mortgage first because unfortunately what I knew about investing was slightly less than nothing. However FJA and Dave Ramsey really got me thinking about the world of investing. FJA aka "you guys" 😂 really put some flesh on the carcass of my investment knowledge and helped me to decide on investment platforms and indeed what to put in them. So thanks for inspiring this old man to get to work rather than thinking he's left it all too late! Great content as always Ken and Mary. Keep up the good work! 👏🏾👏🏾👏🏾

[@TheHumblePenny]

We love to see Dream Makers like you at FJA win 😊❤️. It is not too late! I'll drop a link her for others to learn more and join Financial Joy Academy: FinancialJoyAcademy.com

[@Tinahje]

I'm so excited for you all. Subbed 👊🏾🔥🥂💫

[@TheHumblePenny]

Amazing ❤️. Stay tuned for even better content loading

[@gohstkilla5160]

Inheritance came and boom debt free.to be honest not really felt the difference of paying my mortgage off.

[@danieldean1806]

This is such a cultural thing as well. Those in Germany and other countries are taught to invest from teenagers rather than just saving. There's a real conservative way to how people approach investment in this country. First off it's each to Their own,plus how much one earns...but the Idea of paying off your mortgage without investing is ludicrous. The stock market as historically out performed housing. You should be ideally doing both. Good vid never the less 👌

[@TheHumblePenny]

Thanks for watching and sharing your thoughts.

[@menvicstudio]

We prefer a bit of both with more disposable income towards paying off the mortgage purely for the peace of mind. I just don't want to owe anyone for something as essential as a roof over my head if I can help it.

[@TheHumblePenny]

Fully understand and makes sense

[@Saltytoxico]

The easiest investment ever made is to pay off a potential 6.5% mortgage (thanks BOE & Liz)

[@TheHumblePenny]

6.5% is crazy! But I hear Americans even pay more.