Paying off mortgage 23 November 2010 at 11:02PM in Mortgage-free wannabe 6 replies 670 views

millstonefree

In a position to pay off remaining balance of repayment mortgage. On a good rate so is there any benefit leaving a small amount outstanding for say several years and if so how much?

Jonbvn

millstonefree wrote: »

In a position to pay off remaining balance of repayment mortgage. On a good rate so is there any benefit leaving a small amount outstanding for say several years and if so how much?

Would you be able to draw down funds from the mortgage in future? If not, then I cannot see any benefit.

BTW, the issue of the bank/BS holding your deeds is no longer relevant, since they are held electronically by the land registry.

adwat

I would just pay off the balance and be rid of it to be honest. If you ever need another mortgage in the future you'll have no problems getting one because you already own your house so have 100% equity. If you're thinking of money for an extension etc. then maybe now is the time to start saving for it, I certainly intend to start saving my existing mortgage payment amount when my current mortgage is finished to build up a war chest for the future and do not intend to ever need credit again. You can always review this if your needs change, for example, you want a bigger house in the future and you need a new mortgage. Don't forget, interest rates won't always be this low and when they do rise it will be nice to start receiving substantial interest on any savings you may have rather than paying interest to the bank.

de1amo

i once paid off my mortgage on my first home and when it came to move upwards the banks looked at me side ways because i had no credit record-they like to see you have debts that you can clear regularly--i dont know how things are now. i had no credit cards or mortgage for about 4 years.

adwat

Hi de1amo, it's funny isn't it - we worry about existing finance but also worry about not being able to get more finance...human nature I suppose.

de1amo

i am stoozing my savings to nearly cover my mortgage--interest 60 and mortgage 92-a bit of liquity in these troubled times i feel safer with plus i see getting new finance as becoming tougher and tougher

pupsicola

If your mortgage rate is fixed and you can find a higher savings rate, that doesn't tie you in for too long, dont pay it off yet. As someone mentioned earlier as well, its a good idea to keep a certain amount back as an emergency fund.