Should I shouldn't I 25 September 2009 at 12:26PM in Mortgage-free wannabe 9 replies 916 views

WaxiesDargle

I am about to receive £33,000 pension pay out (I'm 53) and have a £27,000 repayment mortgage @ £198 a month

decisions decisions (a good one to have to make I know!) does the mortgage get it or...mmm

vicshippers

Depends on the rates you're paying/earning and what you would use the payout for if you didn't pay off your mortgage...

shepster81

no brainer for me , pay the mortgage off and that still leaves 6K and the saving of £200 a month

suisidevw

Voluntary Severance?!

WaxiesDargle

suisidevw wrote: »

Voluntary Severance?!

No.............

Jonbvn

OP, you need to tell us your mortgage interest rate. What about other savings and pensions etc?

Meadows

I would pay off the mortgage, and then use the £198 to go back into the savings.
As all interest rates go back up (fingers cross) in the future your £6000 plus monthly savings (almost £2,400 a year) will soon start to grow.

We are a similar age and paid ours off with a lump sum in January, it's a great feeling to know the house is yours. It's a hard decision to use that amount of money, but I'm sure you won't regret it.

Good Luck with your decision.

dimbo61

Hi I take it you are now living on a pension from your former employer?
As savings rates are rather poor at the moment you might well be better off clearing the mortgage provided you will not be hit with an Early Repayment Charge if you are in a fixed /tracker deal.
If you have over £16k in savings you would not be entitled to any means tested benefits such as pension credits so again another good reason to clear the mortgage !
GOOD LUCK

WaxiesDargle

Thanks all for your replies

Yes, I take home £1500 a month pension from a previous employer and I am getting the same amount from a new job that I started in March.

The interest on my mortgage is 4%

Jonbvn

WaxiesDargle wrote: »

Thanks all for your replies

Yes, I take home £1500 a month pension from a previous employer and I am getting the same amount from a new job that I started in March.

The interest on my mortgage is 4%

4% is quite difficult to beat in savings. Also, given that you have an excellent guaranteed income, paying a lump sum of the mortgage seems like a good idea.