Should I pay lump sum off mortgage

kk57oscar

i have just rang are morgage company northen rock, We have 10k in the bank and wanted some infomation about what we shoud do with this. We have a morgage for 94k and that over 35 years ( we are just over 3 years inn). We have been talking about moving in the next 12 months and dont now what to do for the best. staying where we are is not an option we 2 have 2 children in a 2 bed house, 1 is 11years old the other is just coming up to 4. If we pay a lump sum of money off the morgage we will have no other money when it comes to moving house in 12 months.

beecher2

How much is the house worth? Realistically you need a 10% deposit as a bare minimum for your next property - will you have this out of the equity and savings? Remember to count fees etc. If you keep money for fees aside, the decision to pay some of the mortgage off or save it depends on your interest rate, and how much you could get through savings.

Another thing to check is - do you have an ERC to pay? Would you be considering porting your mortgage to a new house, and would NR allow you to do so.

beecher2

https://forums.moneysavingexpert.com/discussion/2437993

Are you the daughter? If so, nothing's changed from the advice you received there.

kk57oscar

yes i am. My mum said i had a morgage over 25 years and its 35 years and she also said my morgage is for 98k and its for 94k. We want to move next year and have been looking at house for 110k, We are hoping to get back the 98k we paid for the house, do you think we should keep hold of the money as norhen rock have told us we will not get anymore money with them.?

Thrugelmir

Pay down the mortgage. Your mortgage interest will be at a higher rate than you can earn on your savings.

If you can afford an increased mortgage. Then overpay your current mortgage by this amount. The more equity you can build up in current home the sooner you will be able to make that step up the ladder you obviously need. "You reap what you sow" as the saying goes.