Mortgage repayment investment strategies can be influenced through pension tax relief, how? 8

Paid my mortgage off last year 12 years early . I’m secure in knowing I’ve always got a roof over my head . What I paid in mortgage payments now goes into my pension.

Excellent content James. Mortgage paid off and now contribute 40% of wages directly into Salary Sacrifice pension. This evidence is very relatable to my low risk appetite.

tried the pension as a mortgage vehicle 4 years ago - bank would not accept it (i would have access to pension by the end of the mortgage). Great content and shows how using average returns, average rates etc over long periods don't work when planning. Presumably this is exactly the same when drawing down defined contribution pension lumps (i.e. the lumps aren't to pay off a mortgage but to give an income

An interesting content James. I got my first mortgage in 1985 with interest rates at 15%, it was an endowment mortgage so I suppose something similar to this. When we moved after 5 years and looked at the interest that could be saved by paying the mortgage off in 10 years it was an easy decision to make. Following completion the focus was on pension contributions and this has paid off. The reduction of debt was my main focus and I would always recommend that path, the recent increase in interest rates will no doubt make others feel the same as the mortgage deals need renewing in the near future. I think the current interest rates are reverting to historical norms and the low interest rate environment of the last ten years plus and loose monetary policy that has seen huge market returns is unlikely to return.

Reminds me of the endowment market of the 1990s... that didn't always end well. But using the pension as a vehicle, and spreading repayment over a few years to reduce tax on pension withdrawal, seems sensible.

Great content. My first two mortgages were repayment ones. Then I learned about investing tax efficiently and took out an interest only mortgage in 2006, it's worked out well for me as since then interest rates were very low in the main and market returns good (400%) but I do understand why most people would prefer to pay off their mortgage early as it's seen as a something that prevents them feeling they own their home. For me a mortgage is a low cost way of borrowing money to invest in a pension.

In the first example with Tom, taxes would make a huge difference in countries where interest payments on mortgages are tax deductible (22% in Norway), while unrealized gains on investments are tax deferred. Also you can easily invest in a global all stocks ETF with very low annual fees (for example as low as 3 basis points, but for sake of calculation one could increase this to 5 - 10 bp). If you add these assumptions the calculations would look much more favorable.

In any case, great content, with concise and clear delivery.