009 USE YOUR MORTGAGE TO RETIRE EARLY
Tips and tricks on how to clear your mortgage and retire early. In this episode, LCH/WEALTH talks to mortgage broker James Witt about retirement and your mortgage choices. If you’d like to arrange a chat about your retirement planning, please get in touch with abi@lchwealth.co.uk James Witt is a specialist in residential and investment property mortgages and holistic integration of mortgages and financial plans.
Lisa Conway-Hughes is a Chartered Financial Adviser, a Fellow of the Personal Finance Society and founder of LCH/WEALTH. Lisa regularly posts financial information, education and updates on her hugely popular Instagram account:
https://www.instagram.com/misslollymoney/
Book a one to one Financial Diagnosis with LCH/WEALTH here:
https://lchwealth.co.uk/lch_wealth_services/one-to-one-financial-diagnosis/
This content is to be used for information and educational purposes only and nothing contained in it is or is intended to be construed as individual financial advice. Financial advice must only be given on an individual basis. If you require legal advice, financial advice or any other expert assistance, you should seek the services of a competent and qualified professional.
Show Transcript
Transcript: Mortgages & Retirement with Lisa Conway-Hughes and James Witt
Lisa Conway-Hughes:
Welcome to the second episode on mortgages with James Witt. Today we’re going to be covering all things about mortgages and retirement, how to retire early, and how best to use your mortgage to achieve that. So thanks, James, for staying for another episode.
James Witt:
Pleasure.
Lisa Conway-Hughes:
So whether you’re a seasoned property investor, high-net-worth individual, or just a normal person on the street, do you think it’s really important to get that mortgage paid before retirement?
James Witt:
I think it depends on your circumstance. And I think that’s where you need to talk through that in depth with your financial planner.
If you’ve got a buy-to-let property, you don’t need to guarantee that the mortgage is paid off. You can keep rolling that through to retirement forever and a day.
If it’s a residential property that you’re living in, and you plan for that to be your final home and never move out, then yes, you want to be looking to have that mortgage paid off completely.
Now, whether that’s paid off through having a mortgage term that fits that date—possibly—but there are lots of other things that can happen: inheritance, business payouts, selling a business, and so on. All of that can be ring-fenced to cover the debt. But yes, if you plan to stay in your home, you need a plan for paying it off in full.
Lisa Conway-Hughes:
What are the repayment strategies you could use, and what would you say is the best?
James Witt:
It depends on how your income is structured.
If you’re 100% salaried, and not expecting any money from “Uncle Bob in Birmingham,” then a repayment mortgage that guarantees the debt is paid off by a certain date is ideal.
I often suggest extending the term a little to reduce monthly payments, then overpaying to bring it down faster.
If your income is variable—say you get bonuses, commissions, or share options—then having a longer term and making flexible overpayments in line with your income can work better.
Some clients also receive lump sums at retirement from employers, and sometimes it makes sense to pay into a pension for tax relief, then use the pension lump sum to overpay the mortgage.
Lisa Conway-Hughes:
Of course, the longer you’ve got that mortgage, the more interest you’ll pay.
James Witt:
Exactly. But if you’re working with a financial planner, you can run the numbers to see what gives the best return.
You’ve shown on Instagram how regular small overpayments can reduce the mortgage term by years.
If you’re relying on a salaried income, setting up a fixed overpayment is a great way to ensure progress—without relying on the stock market or an inheritance to come through.
Lisa Conway-Hughes:
Is there a perfect time in the year to make an overpayment?
James Witt:
No. Lenders calculate interest daily, so if you can overpay monthly, that’s ideal.
But for people with big bonuses and smaller salaries—like many in the City—it often makes more sense to make one large overpayment when the bonus arrives.
That said, you can’t always pay “willy-nilly” without penalties. You need to know your overpayment allowance.
Lisa Conway-Hughes:
What’s the general rule of thumb on overpayments?
James Witt:
If you’re on a tracker mortgage, many allow unlimited overpayments—but tracker rates are usually higher and variable, so they come with risks.
Most people are on fixed rates, typically 2- or 5-year deals. The worst-case scenario is usually a 10% overpayment allowance per year. Some lenders, like Nationwide and NatWest, allow 20%.
The 10% can be based on your current balance or original loan amount, depending on the lender. You’ll find the specifics in your mortgage offer under flexible features.
Lisa Conway-Hughes:
And if you want to overpay by more than the allowance?
James Witt:
You’ll either need to wait until the end of your fixed rate, or consider switching to a tracker for a while to allow that lump-sum payment. For example, if you’ve got a £300,000 mortgage and know £150,000 is coming in six months, going on a tracker could work.
Lisa Conway-Hughes:
What about costly mortgage mistakes? What do you see that people should avoid?
James Witt:
Leaving it to the last minute is the big one.
In some markets, delaying worked in people’s favour. But in others—like a couple of years ago—rates shot up fast.
If you had a good broker locking in rates early, you’d have saved a fortune. We were securing 4% rates that seemed high at the time, but a few months later it was 6% or 6.5%.
Also, remortgaging takes time. If you only have a couple of weeks before your current deal ends, you might end up on the lender’s standard variable rate—often 8–9%.
The lesson: plan early and get your ducks in a row.
Lisa Conway-Hughes:
Perfect. Well, thank you very much, James.
James Witt:
Pleasure.
