Convince me to pay lump off mortgage please

essexsi_2

Hi all,

When I come to remortgage at the end of september I have the money to pay £10k off the £98k outstanding. That's about half my savings. At the moment this is sitting in an easy access account earning 5.25%. Probably going for HSBC BOE+0.99%.

The problem I have is that I've never had savings before and it does give me a bit of a thrill to see the balance I've built up. Stupid I know but I've only ever had debt before.

If I did pay it off I'd still have a bit left over and my ISA's.

Would it be worth paying off the money?

Thanks Si

tuggy

Yes yes yes, 100 times YES pay it off the mortage. I'm sure someone here can point you to a mortgage calculator where you'l see how much interest you'l save? it'l be THOUSANDS of pounds...

globalds

essexsi wrote: »

Hi all,



The problem I have is that I've never had savings before and it does give me a bit of a thrill to see the balance I've built up. Stupid I know but I've only ever had debt before.

If I did pay it off I'd still have a bit left over and my ISA's.

Would it be worth paying off the money?

Thanks Si

If you have £98,000 debt accruing interest in one place and £10,000 in another earning interest.....All you really have to consider is whether your money is working best where you have it ..
I have been overpaying my mortgage for the last year or so and enjoy the sight of watching the monthly payments drop (I haven't changed the term of the mortgage ).
To be honest the lower the payments the easier it gets to save ..if you have managed to reach £10,000 with a whopping mortgage ....You may well find it easier to build the pile back up sooner than you think .

Peelerfart

"Yes yes yes, 100 times YES pay it off the mortage"

Can only agree !. Keep back the minimum you think you may need for the proverbial rainy day and pay off the mortgage .Consult the overpayment calculators. They cannot speak therefore...............!!

essexsi_2

Thank you all for making me see the light! I think I need to change tack from getting a thrill at seeing savings increase to the mortgage shrinking.

Will look at a overpayment calculator. I think I need to see in clear figures the benefit from making a big payment.

Thanks for all your input. All the best Si

zekepes

Glad you have 'seen the light' lol!

Believe me, it is more of a thrill seeing the mortgage going down!

Personally, I would pay all of your savings (minus about 1K and your ISA's) off your mortgage. If your mortgage provider is anything like ours (egg) it is super easy to get it back again. We paid off a £14k lump sum about 3 years ago and then got it all back again, just a few months later, when we decided to start an extension (we then got another mortgage for the rest a couple of months after that).

homeaway

We have just put a lump sum against our mortgage and have always overpayed a little every month as we kept the payment the same when the rate went down. I understand your dilemma but we did the calculations and worked out that it would save us a lot of money if we paid a chunck off. We have reached a compromise, we overpay our mortgage by a x every month and then we save y into a seperate account. If we decide at any point we can put the money in savings acc against the mortgage as well but i like to have some rainy day money. By paying off a chunck of the mortgage it has given us more freedom in that if my hubby is ever out of work we could reduce the payments right down as we are so far in advance.If you feel uneasy about not having any savings then keep some savings and put some against the mortgage . Lump sum payments save you the most interest but you can save quite a lot by overpaying on a monthly basis. I hope this helps.

mdeebee

Go on. Do it and be a devil.

essexsi wrote: »

Hi all,

When I come to remortgage at the end of september I have the money to pay £10k off the £98k outstanding. That's about half my savings. At the moment this is sitting in an easy access account earning 5.25%. Probably going for HSBC BOE+0.99%.

The problem I have is that I've never had savings before and it does give me a bit of a thrill to see the balance I've built up. Stupid I know but I've only ever had debt before.

If I did pay it off I'd still have a bit left over and my ISA's.

Would it be worth paying off the money?

Thanks Si