Pay Off Completely?

Skyline65

I have about £17,000 owing on a flexible tracker mortgage that I have had for about 10 years. I have been overpaying and now also have sufficient cash to pay off the mortgage completely. My mortgage lender has advised not to completely pay the mortgage off, but keep a nominal amount in the account, in order that if I want to buy another house in a few years time that I could still have the benefits of my current mortgage. If I do decide to buy another house I will most probably rent out the one I’m living in. Is it just Bank talk to keep me tied into a mortgage or is it going to be worthwhile?

Thanks

firstaspect

I don't see any need to keep a small amount in a mortgage, who knows what the situation will be like on deals in the future. I'd pay it off completely if I could afford to pay mine off.

Peelerfart

It does give you access to a pool of funds that you can "borrow" at your mortgage rate,for a car for example.
You'll never get a rate on a personal loan as cheap as your mortgage.

I would keep it open personally.

PF

kabads

All the while there is a mortgage left on your property the lender will have a 'charge' (claim) to that property (i.e. if you default then they can repossess). If you have no problem having this and the terms and conditions are acceptable, then leave it as it is. However, just because you have a mortgage (even the small one they are proposing) that does not mean they will necessary lend you the money in the future (especially if you want to purchase a different property as you say). If you purchase another property, my guess is that you will need another mortgage for that property.