Do I just pay it off

AlwaysPondering

Hello all

I've got an offset mortgage with IF, and have about 10 years left with it. When I took on the mortgage I was only 23 and for some reason they wanted my Mum added to the mortgage to act as a gurantee (I'm guessing as I had only just got a job (5 year degree) and no credit cards etc I didn't look good on the credit rating), but because my Mum was on there it had to be paid off by the time she was 65, I'll only be 40 by then.. but I'm 30 now...

Anyway, enough of the background. Since then I'm managed to save up more than what mortgage is, so am currently not paying any interest at all on my mortgage (I love the offset at the moment) - and the savings are paying the monthly payment. Now normally I'd have just left the mortgage to run for the next 10 years and not worried about it too much, the early repayment fee is only 50 quid, so it's not loads.

However my Mum is with Lloyds TSB, and she and my Dad sold their part of a business last year (Dad had retired a couple of years before), and has such she has abit of cash with them..

How, I'm actually not that worried about Lloyds TSB/HBOS going under, however my concern would be that I know my mortgage would get sold on, so my monthly payment would have to be paid, but you just know that it would take time to get my savings back.. also I'm quite concerned at how much longer I'm going to have a job, and if I was to state my savings at the moment they would be lots and lots, so do I

a) just leave as is, everything seems ok
b) pay off a large amount of the mortgage, I save my £50 and if something go wrong, my wife will hav enough saved to cover what is left on the mortgage.
c) pay it all off (accept that £50, is little compare to the interest I've saved)
d) something else.. any idea moneysavers?

Cheers All - look forward to your replies/comments/suggestions

dimbo61

You could pay off some of the mortgage and bring it down to £35k with £35k in the offset.
If the worst happens ( not a chance !) your money is safe.
Save into ISA,s ( cash ) and build up savings ( no more than £35k in any one bank )
If you thinking of moving and getting bigger house then you might be better off keeping offset with IF

Cat695

How would you feel if you actually owned the house?? paying NOTHING to the mortgage company and actually earning interest on your savings??

does that sound better than actually worrying?? say you did lose your job least you would have a house WITHOUT a mortgage to worry about

If I was in your position then i would pay it off now and relish in the fact you are untouchable

Primrose

I too would pay off the mortgage and be done with it. These are turbulent economic times. Do you have a 100% guarantee that you will not be made redundant in the foreseeable future? All this offsetting is all very well but it doesn't really hide the fact that you still have a mortage, and debt. Ask yourself how you'd feel if in a month's time we had a catastrophic financial meltdown and all your savings disappeared. As Cat 695 has pointed out, being untouchable is a greatly reassuring place to be in these difficult times.

Optimisticpair

You could do worse than have a look a at Martin's articles on mortgage pay off or not and the one on the liability if a Uk bank goes under re the 35k. It has a bearing for you if you are basic or high rate tax payers re your interest rate gained or lost compared to using savings offsetting the debt. It depends on how much you need access to funds quickly also. Spread your nest eggs is poss good.

Scuse me for the disjointed ramble it's 1 am and I am too dead on my feet to do better. Assuming that I actually had any knowledge that could help IYSWIM.

Well done you by the way. 5 years well spent I think.

LumpyCustard_2

I believe that if you have an offset and your bank goes under, the savings in the offset will just be used against your mortgage debt - so effectively it means that your mortgage would be cleared. You might want to check that though.

Since you have more savings than debt though, it might be wise to move the extra savings out elsewhere. (In many offsets you don't get interest on savings that are above the amount of the debt anyway, so unless you get a really good rate, you should move them to either an ISA or if that's already full this year, to a high-paying savings account.)

getmore4less

I would keep the offset ticking over and save the rest elsewhere.

If you have significant extra savings between and both work it will make little difference to the benfits situation if one of you lost your job.

The advantage of having access to a pot of money might come in handy if you wanted to move or just buy somewhere in the coming fire sale. Trying to raise new funds may not be that easy.

I would probably see about getting the gurantee status of your mum removed it is no longer needed, allthough I don't think it is/will cause any issues if they a reOK and don't need to borrow.

dimbo61

If you have any worries about the security of your job then pay off the mortgage now.
If you have to go on benefits the first thing they ask is how much savings do you have and what is your monthly mortgage payment !
If you have £60/70k in the bank they expect you to live off that for a very long time until your savings are below £6k
So if any doubts clear the mortgage and then get saving
I would clear the mortgage and make mum happy and look to the future and taking life easier with no mortgage to worry about.