Do I leave a couple of grand as mortgage balance? Help!
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din_dons
Posts: 35 Forumite
Am frantically trying to pay off mortgage, having been inspired by mortgage free in 3 etc. I now have £20K left and reckon will take a couple of years to pay off, the question is do I leave a grand or two in mortgage and then pay that as interest free so I can borrow again at a good rate or do I pay it off completly?
Thanks for your help all!
Thanks for your help all!
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Comments
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Sorry no idea. I'm thinking the same too so will be interested in any replies.0
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this all depends on the deal you have with your lender
ie fixed offset at 3.99% till 2013 then dont pay off all the mortgage !
But I bet you dont have anywhere near as good a deal as that ( I dont either )
Can you earn a better rate of return from your savings ie 6/6.5% tax free in a cash ISA than you are paying on your mortgage ?
If not then pay off the mortgage first and then start saving into ISA,s and
regular savers IE halifax 10% saver.
After you have cleared the mortgage then one of you ( if a couple ?) might
decide to retire early and put the savings in his/her name to take advantage
of the tax free earnings limit £5800 ? a year.
clear your debts and then save for the nice things in life with your home paid for. GOOD LUCK0 -
I'd have thought with all this talk of paying off the mortgage, it actually would be better to keep your mortgage to a nominal sum. I don't think there's anything the lender can do about you having £2000 or even less.
Mortgages can be one of the cheapest forms of borrowing. Rather than paying it all off I think it's better to keep the a/c open with as little as possible.0 -
mortgages used to be one of the cheapest ways to borrow money but have you seen the fees alot of lenders are now charging ! plus survey,solictor fees, etc.
Having 2/3k outstanding on your mortgage at the lenders SVR say 6.9/7.2%
will mean your savings would have to earn the same after TAX.
So think carefully and take all costs into account.
There is nothing better than having savings in the bank and buying large
items such as cars/ Kitchens/New furniture with cash in your back pocket so to speak. ASK for a big discount for cash or you walk and no need to take out expensive finance.0 -
Thanks for your help and advice. Current mortgage with Co-op 5.94% tracker and can overpay as much as like.
Looks like I should try and pay off completly and then save save save!0 -
....watch out for early redemption charges though....may be best keeping a really small balance of a few quid on your mortgage to avoid them - although it is mentally less satisfying than knowing you have NO MORTGAGE I agree!The best advice you can give your children: "Take responsibility for your own actions...and always Read the Small Print!"
..."Mind yer a*se on the step!"
TTC with FI - RIP my 2 MC Angels - 3rd full ICSI starts May/June 2009 - BFP!!! Please let it be 'third time lucky'..... EDD 7th March 2010.0
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