what to do now????????????? 21 February 2011 at 7:26PM in Mortgage-free wannabe 9 replies 977 views

finhelp

I have just acquired some money that could pay off my mortgage. I have an offest account but am not sure what to do now. I have 6 years left on mortgage with 65 k outstanding (i have no other debts). Should I put it in the offset savings or just pay off the whole thing. Any advice would be much appreciated.:)

whatyadoinsucka

check your T&C for fees due.. do you need the cash future baby, car purchase holiday

can you earn more investing it

AnnaV

what rate are you on? Would you be subject to any early repayment fees?

finhelp

i'm5.15% fixed. There would be an early repayment of £2000. No babies for me, got a car that wrks fine at the moment and i've already saved for a wee holiday x

whatyadoinsucka

i'd be tempted to pay it to a nominal sum, ie that your future payments will take it to as near to zero as possible by the end of 6 years

I'm not sure how offsets work in detail
but for a standard capital repayment my brother amended his monthly payable to £80 a month for the remainding term and
overpaid the rest, therefore not having to repay an early charge

getmore4less

finhelp wrote: »

i'm5.15% fixed. There would be an early repayment of £2000. No babies for me, got a car that wrks fine at the moment and i've already saved for a wee holiday x

Offset 100% (check they don't close the mortgage)


Do something else with the rest.

dimbo61

dont pay £2000 in ERC fees if you dont have to so as you have an offset account just put the £65K into the offset account and take your normal( mortgage ) payment out each month and pay into ISA,s or regular savers.
You have 6 years left on the mortgage but is it fixed for 6 years or less?
Now check if you can reduce the term down to the end of your FIX? and use money in the offset to pay the extra each month!
This way you wont pay any interest to the mortgage company and in 6 years you will have built up £65K plus interest in savings

finhelp

Thanks very much for all the advice. I'm a newbie and couldn't find where I'd posted this til now!!!! I phoned the bank today and i can offset the whole lot as long as i don't have more in savings/bank account than is owed in the mortgage.

dimbo61

Thats great so you will pay no interest and all you need to do is once you have paid your normal mortgage payment each month then withdraw the same amount each month from the offset account and save in ISA,s or regular savers.
Not quite MF but able to build up savings over the next 6 years while fully offset

finhelp

Yeh. Need to double check that i can have 100% offset and make sure that when i'm paid that i transfer money asap somewhere else like a savings account so that i don't go over my mortgage threshold. Not quite MF but close enough to it and no early repayment charge to pay either! Thanks for the help x