Should I clear my mortgage?

kingneptune

I am being made redundant and am worried about earning enough to cover all my outgoings. I have recently inherited some money and could just about pay off my mortgage, so at least I know I'll have a roof over my head. Is this the right thing to do or not?

cattie

It isn't something I'd do at this stage. Once you are made redundant the money will be a cushion & give you a breathing space to see what level your future earnings are likely to be. Once you've adjusted to your new income, you could then give some thought to making overpayments on your mortgage or paying it off partially or completely if you do feel you really would like to do this.

The advice given on this forum is generally to try to ensure that you have enough money saved to see you through for at least 6 months should you have no income.

innovate

I think you are doing the right thing planning ahead and looking at your options now, rather than waiting to see how things will work out.

I would say without knowing the figures involved (outstanding mortgage, amount of savings, interest rates for both, redundance money & tax liability on it), it's not really possible to say either way. Are you expecting to get unemployment benefits? Will you be able to draw a company pension upon redundancy? Would not working save you money (e.g. less petrol, less on food/clothes etc)? For how long do you expect to be out of work?

Would you be able to post some more data?

ManAtHome

Depends on your mortgage rate as well - anything you pay off is as good as tax-paid or tax-free savings providing you can pay it wityhout penalties. I believe that any cash (savings) you have can affect benefits - may be worth a look on the benefits board.