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    • Papagolf
    • By Papagolf 15th Sep 17, 8:35 AM
    • 1Posts
    • 0Thanks
    Pay lump sum off mortgage or wait?
    • #1
    • 15th Sep 17, 8:35 AM
    Pay lump sum off mortgage or wait? 15th Sep 17 at 8:35 AM

    I have had a £110,000 interest only tracker mortgage at 1.5% with Barclays (woolwich) which is 1 year away from ending (the house is worth about £250,000). I am 50 and I have just had a £50,000 payout from my endowment. I will receive about £90,000 gratuity from a pension in 10 years time. I also have options of taking small lump sums of about £40,000 from pensions over the next 10 years. I would like to carry out some house improvement that will probably cost about £30,000. My plan was to to pay £50,000 towards the mortgage (there are no overpayments or early settlement charges) bringing it down to £60,000 and then apply to remortgage with any lender who will entertain me for £90,000. I had always assumed that this would be a repayment mortgage. I spoke to Barclays and they have said that, subject to credit checks and affordability checks I can extend my mortgage for up to 13 years. I consider the deal I am on to be a good one (variable tracker at 1.5%). I have a good credit rating but was planning on applying to remortgage next year as some monthly commitments (PCP etc) will be repaid and I thought that would make me more attractive to any lenders. Any advice on what to do next? I am tempted to apply now to Barclays for an extension but am worried I will be turned down because of monthly commitments, if I get accepted is it wise to continue with the mortgage and use any left over funds from the home improvement to pay off a chunk of the mortgage? Should I wait a year and invest the £50,000? Should I see a mortgage broker now and pay a £300 fee? Your advice is appreciated.
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    • getmore4less
    • By getmore4less 15th Sep 17, 9:44 AM
    • 31,381 Posts
    • 18,806 Thanks
    • #2
    • 15th Sep 17, 9:44 AM
    • #2
    • 15th Sep 17, 9:44 AM
    Good rate if Barclays will entertain the extension on an interest only basis then that gives more options and a low payment(£140pm).

    If they will but need some paying off you have that option up to your £50k

    What does your affordability look like on repayment 11y 1.5% you have a few options obvious 3 are
    £110k is £900pm
    £90k is £750pm (keeping back £30k for refurb)
    £60k is £500pm

    Personally I would be securing the future now and not waiting till next year giving time pressure and the risk of a change in circumstances.

    The preferred option would depend on the tax status, current and forecast retirement income.
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