Paying mortgage off
Discussion
Got just under 6 years left of our repayment mortgage and current balance is c.£17,800. Rate is 1.49% and monthly payment is c. £270. Settlement figure is £18,100. I've got sufficient funds to be able to clear the mortgage but not sure if it's the right thing to do financially. I'm not going to be saving a lot of interest paying it off; I can certainly earn more interest by investing what I would be using to pay off the mortgage.
Or is it better to just pay off the mortgage especially in these troubled times?
Or is it better to just pay off the mortgage especially in these troubled times?
I was in a similar situation to you - I paid mine off.
https://www.pistonheads.com/gassing/topic.asp?h=0&...
https://www.pistonheads.com/gassing/topic.asp?h=0&...
t happens”, and then pay off the balance at the end of the fixed rate period. Voldemort said:
Is this your 'forever home'*? If so, do it. If you might be moving in the short to medium term, keep the mortgage going.
*Hateful term
Sorry could you explain the reasoning behind this? Is it because our current lender would be more inclined to grant a further advance if we still have a mortgage with them? Whilst it could be our forever home if we were to move I very much doubt we would need to borrow any more. Does this change things?*Hateful term
Muzzer79 said:
Unless you have a big savings pot; I'd keep the money until your fixed 1.49% rate ends, then pay it off.
This, if I had a big savings pot I would personally be tempted to pay it off just to get rid of it. If paying it off leaves you with no backup money then I would wait until the 1.49% deal ends.Unless you're rolling in cash then paying off the mortgage is probably not the right step.
We are in the midst of big uncertainty.
Your 0% £7k credit card debt is not certain to remain at 0%.
Your job is not certain to remain.
£10k of cash savings is not certain to be enough given that you added the word 'hopefully'.
In 18 months you can then make the decision based on a bit more clarity but I can't see why anyone would be getting rid of cash at the moment unless it's to bin nasty debt or there is lots of it, way more than is needed.
People are still banging on about it being smart to keep 3-6 months of cash on deposit. That is out of date. That was when debt was easy and everything looked rosy. In the current climate, just now, you'd want at least a year's worth before even starting to feel comfortable.
We are in the midst of big uncertainty.
Your 0% £7k credit card debt is not certain to remain at 0%.
Your job is not certain to remain.
£10k of cash savings is not certain to be enough given that you added the word 'hopefully'.
In 18 months you can then make the decision based on a bit more clarity but I can't see why anyone would be getting rid of cash at the moment unless it's to bin nasty debt or there is lots of it, way more than is needed.
People are still banging on about it being smart to keep 3-6 months of cash on deposit. That is out of date. That was when debt was easy and everything looked rosy. In the current climate, just now, you'd want at least a year's worth before even starting to feel comfortable.
Vasco said:
It's not simply a financial matter.
Personally, I'd clear the mortgage as it removes a potentially massive worry. Nothing better than a clear mind.
I can understand that.Personally, I'd clear the mortgage as it removes a potentially massive worry. Nothing better than a clear mind.
But OTOH, having options open, access to a £10k pot of money at mortgage rates can be a nice thing to have too.
While the fixed rate lasts, I wouldn't do anything. You'll get enough interest in a Building Soc after any tax to cover it so just relax.
Vasco said:
Personally, I'd clear the mortgage as it removes a potentially massive worry. Nothing better than a clear mind.
I can't see how an £18k mortgage is ever going to be a massive worry. If it were £18K in cash would be essential and far more useful that a mortgage free home. (IMO)Gassing Station | Finance | Top of Page | What's New | My Stuff