Hi,

 

Self build has been my dream for a while now and although I wish I could start tomorrow, realistically it’ll be more like 10 year plan now (unless Govt proposed Help to Build scheme is really good initiative).

 

My question for you all is around what you did or would do in terms of finance.

 

We are on regular residential mortgage, jobs not amazingly well paid but fairly safe (touch wood ?). Do you reckon it’s better to overpay current mortgage and with aim to be debt free in next 10 years OR save cash ready for land purchase.

 

I hope it makes sense? 
 
Thank you

Difficult question

 

my own personal opinion would to pay the mortgage off as early as possible to get this debt clear.

 

I’m overpaying monthly to get it paid off sooner.

 

I've been in a similar position. I don't like giving specific advice, but I would suggest doing some calculations and figure out the pros and cons of each approach. Figure out a few different scenarios as a lot can happen in 10 years (both in your personal life and in the wider economy)

 

Paying off a mortgage is not too dissimilar to saving, the obvious caveat being that accessing the cash is dependent on the housing market when you come to sell. Mortgage interest rates are higher than interest rates on savings and depending on the value of the mortgage you're probably paying a lot in interest compared to what you'd get on what you save.

I think my head tells me to pay off as much as possible as early as possible but worry that I wouldn’t have the funds for plot purchases when needed and only ended up having to get self build mortgage on which rates are not as great as residential. 
 

I know there isn’t any right or wrong answer but really just curious how everyone else approached this conundrum.