I *do* factor the change in net worth into our net worth calculations, I just have a mental block re. adding it to savings rateI also think it makes sense to count loan principal payments in savings rate, because 1) your net worth goes up
I try to avoid too narrow a definition of savings and wealth, but I think that it can be easy to mentally discount certain forms. For some reason I find stocks (lines of code in a broker's platform) less tangible than our home, which is a massive pile of bricks!
My loan does have interest applied and the boom in central bank money printing has helped to keep it low. For my particular flavour of loan, the amount is either the lower RPI, or the average of a pool of bank rates +1%. Thanks to the negligible BoE base rate, we're paying 1.5%.
I would like to pay it off, but it still feels like easy money. Our mortgage rate is 3.15%, I can get 4.8% after tax from relatively secure P2P lending, 4% after tax from current account offers etc. etc. The threshold for repayment is £17,335, we pay 9% of salary after this.
Where possible, I try to save and invest all of our money in a tax efficient manner. Currently our pensions and all other equity holdings are protected from tax. We pay tax on cash savings and P2P cash, but this is a smaller part of our portfolio and P2P will hopefully be sheltered after the budget next April.
I will be very disappointed if we're paying any tax on our investments or are in a position where it is counted as 'earned income' by the time we reach FI.