Sit on it or pay off mortgage?

Lizzie1

We are currently trying to move house, we were lucky enough to get an offer of the full asking price within 48 hours of being on the market however we can't find anywhere that we like! We have just recieved some inheritance about 25k and not sure what to do with it. Should we pay off some of our current mortgage or put in the bank as we will need it to put towards our deposit if we find somewhere to buy.

opinions4u

What rate are you paying on your mortgage at the moment?

Is there an early repayment penalty on your mortgage?

Do you have an offset type mortgage?

Are either of you 40% tax payers?

Provide that info and people can give you a reply that benefits you.

Lizzie1

Our current mortgage rate is 4.24% and is interest only, we can make overpayments of upto 10% each year which is fee free. It was a fixed mortgage which expired and has now switched to the variable rate.
Only one of us is a 40% tax payer.

opinions4u

Pay most of it off the mortgage (£20kish, subject to not incurring a penalty, or the maximum penalty free and hold the rest back in savings).

Keep some back in an easy access savings account to cover up front costs as and when you do move.

Take a look at www.moneyfacts.co.uk for the best savings accounts and keep the balance in the name of the lowest taxpayer.