Who drew out their savings to reduce their mortgage

hughmungas1986

We had already decided when we remortgaged that we would pay off a sizeable chunk of the mortgage using my savings and leave my OH's for a rainy day. We have no regrets at all

hugh

Emmacw

We are one of those statistics!

We paid the last of our mortgage off with savings from a cash ISA due to the low interest rates.

Didn't leave ourselves short of savings though as our ISAs are my comfort blanket and still have enough 'just in case' for a year or two, possibly three being really frugal, if hubby's job were to disappear. Mine, thankfully, is safe in a recession, though thats because of the misfortune of others (think government dept & people becoming unemployed).

Now we have cleared the mortgage we could, at a push, live off my wage alone and could treat anything hubby earns as extra (as long as he stops spending!:D )

Not sure where best to put any new savings though, hardly seems worth saving but am really loathe to give up the frugal habit.

E

shazzany

Well done on being mortgage free! very jealous!:beer:

SmileyG_2

Emmacw wrote: »

We are one of those statistics!

We paid the last of our mortgage off with savings from a cash ISA due to the low interest rates.

Didn't leave ourselves short of savings though as our ISAs are my comfort blanket and still have enough 'just in case' for a year or two, possibly three being really frugal, if hubby's job were to disappear. Mine, thankfully, is safe in a recession, though thats because of the misfortune of others (think government dept & people becoming unemployed).

Now we have cleared the mortgage we could, at a push, live off my wage alone and could treat anything hubby earns as extra (as long as he stops spending!:D )

Not sure where best to put any new savings though, hardly seems worth saving but am really loathe to give up the frugal habit.

E

Whilst it is great to be mortgage free, it is important to recognise that once the ISA savings are taken out of the ISA you can only put them back at a rate of £3600 per year. Not a problem if you're not hitting the limit, but this era of low Interest Rates is wholly temporary.

When inflation (fuelled by quantative easing) begins to take over, then rates will rise again.

Having said that, at least you won't have to worry about mortgage rates.....

SmileyG

theoretica

I am facing this very decision at the moment. I know what would be the numerical answer- but the difference isn't that great and I am very tempted to decide emotionally!

It would be financially more sensible for me to keep the couple of years ISAs as my mortgage interest is very low at the moment and, as mentioned, once lost the interest free status cannot be regained, but more hassle (they were in Icesave so I need to open a new account) and less satisfying as I don't like being in debt and can always redraw overpayments out of my mortgage again in case of emergency.

ailuro2

We did it the other way round

Took 29K overpayment fund out of our tracker mortgage and put it into fixed rate interest savings for a year.Our mortgage tracks at BofE plus 0.49%, so not a bad move for us.;)

prudence41

I am using money from one of my cash ISAs (now only paying 0.5% interest) to overpay the maximum on my fixed rate 5.4% mortgage. For me, it seems to be the best use of savings in the current climate.

mark5

About to pay off 10% of mortgage in the next few days so that will be another £13,000 of money gone from savings accounts!

whathavewedone

I took 16k out of savings to reduce our mortgage in October. Still got about 30k in savings for rainy day money. Planning to start overpaying as of next month by around £250-300 a month. Oh and I have just quit smoking so we shouldn't even miss the money hopefully.

Our fixed rate ends in December 2011. Depending on how things are then we will either put some or all of the 30k in then or keep it to help us pay the mortgage if interest rates are sky high by then.

clarew

I am not sure whether to do this......am with nationwide at 5.18% till oct 2011, with mgage of £158k remaining. am about to get 8k redundancy, was wondering whether to whack 5k at the mgage ( as £500/month op, into my overpayment fund-so i can withdraw as needed) or to stick the lot into isa's