should i pay off my mortgage

DazmanUK

OK i have no loans or credit card bills, i''m on a variable mortgage rate which at the moment stands at 2.5 %, and i owe £82,000, i have £90,000 in savings, to get a good deal on savings i seem to have to lock my money away for some time, but i'm concerned about the mortgage rate raising, should i pay off my mortgage a soon as possible ?


cheers daz

bzz

Will you have to pay an early repayment fee? Can you overpay without penalty?

Why not switch to an offset mortgage? You can put the £82,000 in the offset so you would pay no interest (but, at the same time, keeping the money liquid so that if the mortgage rate dips and the savings rates rise, you can move the money to where it's best).

dimbo61

You dont say where the savings are ? In cash ISA,s earning 3%+ tax free ?
If you cleared the mortgage now you would still have £8K as an emergency fund and could use the mortgage payment each month to build up your savings in either cash ISA,s or regular savers.
Changing mortgages will cost fees!
Its a debt at the end of the day and you now have the chance to be debt free.
Once you have cashed in the old ISA,s you cant get them back so use any money not in ISA,s to reduce your mortgage balance.

getmore4less

Mortgage free should be part of long term planning usual associated with retirement.


How much free cash flow from income do you have now and whats the mortgage payment(which becomes free cash flow if you pay it off)?

Do you have a well planned budget covering the near term expeses like new cars?

Any plans to move house?

Whats the plan for loss off income?

Whats the plan for retirement income?

DazmanUK

I'll try and answer some questions
first we don't have to pay an early repayment fee, and i can over pay without penalty
about £70,000 are in isa's, to get above 3% they want to tie us up for a couple of years all very well if my mortgage rate stays low

we save about £800 a month, the mortgage as it stands is £555 a month
we have no plans to change car for about 3 years
or move house
we both work and could get by if one lost their job (especially without the mortgage)
we both have private pensions, we are good savers, and we plan to down size later in life and are also thinking about equity release

cheers