should I pay off my offset mortgate?

stomachstaple

Hi Ya'll

In light of the credit crunch and my paranoia about losing my savings should I pay my mortgage off? I have enough money in my offset account to pay off my mortgage. I pay no interest on the mortgage due to the amount of savings offsetting it. The amount of the mortgage left amounts to about 12 thousand pounds. I need some advice thanks

josie

I'm wondering the same and what the implications are of paying off early. I think there are some charges associated with deeds, aren't there?

We decided to offset the whole of our mortgage, (about £43k) but hadn't read the small print , which said we could only offset 85% of it :mad: . So we then took out the 15% that wasn't earning any interest. We pay £29 per month interest, although this will go down as it tracks the base rate.

Any advice or comments gratefully received!

stomachstaple

Thanks lots Josie : )
I'll be phoning the N and P on Monday - I'm under the impression that I have offset the whole mortgage however I really do need to check it out as Im really not sure! Great advice thanks : )

StuartGMC

josie wrote: »

I'm wondering the same and what the implications are of paying off early. I think there are some charges associated with deeds, aren't there?

We decided to offset the whole of our mortgage, (about £43k) but hadn't read the small print , which said we could only offset 85% of it :mad: . So we then took out the 15% that wasn't earning any interest. We pay £29 per month interest, although this will go down as it tracks the base rate.

Any advice or comments gratefully received!

Get your additional rainy day funds in place then pay it all off!

I think I would be annoyed too at the 85% limit as you will always incur some interest. NatWest thankfully allow 100%.

However, stay positive I think you are paying 0.01% interest rate on that £43k so it's still "quite" a good rate

josie

We've got about £40k in other savings, so I guess we should just do it - it feels like a big step, tho not really sure why!

dimbo61

If you can pay it off without being hit with any early repayment charges then get rid of the debt.
It does not matter what the interest rate is as you have offset most if not all the mortgage balance.
Building up other savings in cash ISA,s and pensions is your next target.
For most people the mortgage is the largest monthly payment and putting that amount away into savings each month will ( hopefully ! ) soon build into a good savings pot. GOOD LUCK

george_jetson

Why not keep your offset mortgage going with a balance of £0 and "unlink" all accounts linked to it? That way you aren't paying any interest and can put surplus money in interest bearing accounts.

But you still have easy access to a line of credit if you really need it in the future.

That's what I've done - although I haven't technically paid off my mortgage, by maintaining a £0 balance it's effectively the same thing.