Mortgage free, or nearly free?

MadAboutMoney

We have been paying overpayments off our mortgages and will very soon be making our final payments.

I have always planned to leave £100 on each mortgage and convert them to interest only. My reasoning is that for pennies per year the BS will look after the deeds for me and as the overpayments are always available to draw down, I can have low interest loans any time I want.

Do you think that is the best thing to do or are there any disadvantages to doing it that way?

Trying_to_be_good

Deeds are now held electronically, so you don't need to worry about that aspect - you don't need fire-proof storage etc.

Having the ability to draw down funds sounds a good plan, though it might be a matter to re-mortgage to get the extra funds depending on whether you can withdraw your overpayments or not.

Congratulations, though!

shirlgirl2004

Although we still have a reasonable amount left we should be MF by April 09 and we've pretty much decided that we'll leave a small amount owing. We have a Woolwich mortgage which has a reserve account. The reserve facility means we can borrow upto the amount of the original mortgage (about £100k). It isn't on such a good rate as we're on now as they lend it to you at the current standard mortgage rate but it is generally going to be cheaper than most other forms of lending. It may well be that once our savings are substancial again then we will just pay the mortgage off anyway. For the interim though we will leave it as repayment which means that we'd be paying a couple of pounds a month on about £1k.

hazelize_uk

shirlgirl2004 wrote: »

Although we still have a reasonable amount left we should be MF by April 09 and we've pretty much decided that we'll leave a small amount owing. We have a Woolwich mortgage which has a reserve account. The reserve facility means we can borrow upto the amount of the original mortgage (about £100k). It isn't on such a good rate as we're on now as they lend it to you at the current standard mortgage rate but it is generally going to be cheaper than most other forms of lending. It may well be that once our savings are substancial again then we will just pay the mortgage off anyway. For the interim though we will leave it as repayment which means that we'd be paying a couple of pounds a month on about £1k.

Hi i also have a woolwich mortgage and was planning the very same thing but since Barclays took over its no where near that simple anymore!!!!

You can no longer use the mortgage reserve in your offset account once the mortgage balance is below £1,000. The only way to finish the mortgage early without the £250 fee is to rearrange the term to adjust the payments but there is a £50 fee for changing it over (i think the amounts are right!)

The other alternative was to leave the balance at £1,000 and change to interest only and also leave £1,000 in the offset so of course there is no interest payable but there is also an arrangement fee of around £50 for this!

The list of ways to stop you leaving a small balance, and therefore still have access to the reserve should you need it seemed to be endless so I have given up and decided to just bite it and pay the final fee :rolleyes: I have £1500 left as of today and will pay it off by the end of October when i will also be waiving a big goodbye to Barclays as I have had nothing but grief from them!

Anyway after all that I just thought i'd let you know that you should give them a ring just to clarify what you think you would like to do is actually possible