Pay off mortgage or use as deposit.

allanwhyte77

Advice would be appriciated. I'm soon to inherite about 40k and it is my intention to use the money towards a larger, more expensive property in about a years time from now.

I currently have outstanding on my A&L mortgage about 28k which I'm paying 1.45% per month in interest which is A&L SLV. I have increased my monthly payments as to take advantage of the low interest rates at present.

It is my intention to purchase a property with my partner of about 150k and I expect to have at least 50k in equity from my present property.

Would It be best to pay off the remaining balance of my current mortgage and save the rest or keep all the money in the bank for when I seek a new mortgage deal.If I kept the current mortgage would I be able to keep the SLV for the remaining balance?

Thank you.

getmore4less

If it is portable and they have decent top up mortgages then I would keep the mortgage and save the money.

Depends on the top up rates on offer.

Probaly worth saving anyway you can get 2.5 in egg ( 1.5% for 20% tax).

I would probably stop overpaying and max out the portable bit it will be hard to better that on any top up.


When the time comes or any rates change review the setup.

getmore4less

1.45% per month in interest?

allanwhyte77

Yes it says 1.45% on my monthly statement of the £250 I pay a month £31.03 is interest.
thanks

allanwhyte77

Just rang A&L and they told me that as long as I borrow at least 75% of my current balance, at the time of remorgaging, then I can borrow at the present rate that I'm on which is 1.45% and that the morgage is portable. I plan to borrow a further 30k this sounds like a great deal! I wonder if there is a catch.