Is keeping a small mortgage advisable?

elgord

I have recently had a Critical Life policy pay out the grand sum of £74000 (the silver lining to a pretty sh***y cloud). I intend to put almost all of it into my mortgage - standing at around £78000, and my Building Society will waive penalties, due to the circumstances. This will leave me with a mortgage of around £6000. As my rate is 5.79%, I know that it is advisable to pay off as much as I can rather save at a lower interest rate. It might then be possible for me to overpay regularly and clear some of the remaining amount more quickly. I wondered, however, if it would be advantageous to keep a small mortgage going rather than clear it in as short a time as possible??
Any advice would be appreciated.
Thanks

betmunch

I believe it would look good on your credit file to have a small mortgage paid regularly than no mortgage at all.

Do you anticipate needing credit in the future? Is so, then I personally would keep the small mortgage going.

elgord

Thanks - I hadnt thought about my credit rating though had wondered about implications on future borrowing.
Thanks again.

dimbo61

If the mortgage rate is still 5.79% I would keep the same mortgage payment or even pay more and reduce expensive debt asap
Now once down to say £500 then reduce your mortgage payment but having a mortgage does not improve your credit score.
Having a job, paying your bills on time, being on the electroal role etc does

betmunch

dimbo61 wrote: »

having a mortgage does not improve your credit score.

What?

Surely having credit and paying it improves your credit score more than simply not having the credit?

elgord

This is where my confusion lies - whether to be steadily and regularly paying a small mortgage versus having no debt to prove I can repay regularly. As I also have health issues, I worry that that will have implications on any new borrowing I may need at a future time, although obviously that is not a plan, just covering all potential options.

[Deleted User]

Don't take this the wrong way, but do you have a sound life expectancy?

If not, !!!! it, go on and enjoy yourself.

elgord

I am tempted to treat myself big time, but as I have an 80% chance of beating this, I'm being responsible, I'm afraid!! I'm just looking forward to paying in the region of £60 a month mortgage as opposed to £879, which should still allow me to enjoy/save around £600 a month if I choose not to overpay a penny more than I have to!!

elgord

God, my maths...I mean £800!!