Do I Pay or Save?

Mykal54

I have read all the info provided and also the comments on the Forum.

I am more confused now than before I started!

Can someone give me a straight answer, please?

I have a mortgage of £18,494.06 with 9yrs 5mths left.

A current interest rate of 2.5% gross. I am paying £183.90 p.m. on a repayment mortgage.

There is a one-off fee of £75 if a pay off the mortgage completely.

I am unemployed but not registered, so am receiving no benefits. (Don't go down this route please!)

My wife is working but in the lower tax bracket.

I am able to pay off the mortgage.

SHOULD I DO SO????

Cannon_Fodder

Is the amount of cash you hold just enough to clear the mortgage, i.e. will you have little to fall-back on if you paid it off? You might need to dig into that cash.

Or, do you have a substantial amount, and will therefore leave yourselves sufficient to fall-back on, to tide you through your unemployment?

There are ISAs that earn more than 2.5%, so it might superficially appear best to keep the money and earn 3% or whatever on it.

But, if you are nearing a re-mortgage and have a preference for Fixed deals, or if 2.5% is the SVR and you are starting to worry about interest rates rising after the election, then paying the fees/costs involved in a re-mortgage, potentially including moving Lender, especially on such a small mortgage would perhaps make it best to pay it off.

Mykal54

Cannon_Fodder wrote: »

Is the amount of cash you hold just enough to clear the mortgage, i.e. will you have little to fall-back on if you paid it off? You might need to dig into that cash.

Or, do you have a substantial amount, and will therefore leave yourselves sufficient to fall-back on, to tide you through your unemployment?

There are ISAs that earn more than 2.5%, so it might superficially appear best to keep the money and earn 3% or whatever on it.

But, if you are nearing a re-mortgage and have a preference for Fixed deals, or if 2.5% is the SVR and you are starting to worry about interest rates rising after the election, then paying the fees/costs involved in a re-mortgage, potentially including moving Lender, especially on such a small mortgage would perhaps make it best to pay it off.

I have enough to provide for my period of unemploment.
It seems to me that paying off the mortgage is probably the better option.
I can forsee interest rates going up in the near future. Also, I am not sure if another lender would be prepared to allow us to move our mortgage with me being unemployed.

dimbo61

Can your wife take on the mortgage herself ?
Ie does she earn enough to pay the mortgage from her income multiplies.
I would sit tight and see if you get a new job soon and just pay the normal amount each month at 2.5% SVR.
Once you have a new job then clear the mortgage with your savings and that will help with finances ( no mortgage to pay or interest rates to worry about) plus the savings in fees, surveys,legals ETC

dimbo61

You asked us not to mention benefits ( its a minefield I know) but if you have over £16K in savings ( redundancy money ) then you cant get means tested benefits except JSA for six months based on employment history.
Once you have any kind of work what you do woth your money is your buisness and if it was me I would clear my mortgage as one less bill to pay each month
GOOD LUCK