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Mortgage pay off advice please

1 Post
Hi,
Lurked here for a while but our first post (so hello!) looking for some good advice.
We currently have a 7 year old offset mortgage that originally owed 110k on a property purchased for 160k - through overpayments etc, this is currently down to approx 67k.
We currently have about 12k in the offset mortgage and a further approx 33k in cash ISAs / a 2 yr cash ISA due to expire soon.
I also have an endowment policy that has run for many years from a previous house purchase that, if surrendered would provide about 12.5k even though approx 10.5k has been paid in (terrible decision).
In total, that amounts to approx 57.5k. Our mortgage rate is about 0.8% at present as it is base rate + a small amount (a good decision). We overpay by £300 a month.
We have no other debts
Would would be a good course of action at this point in time?
Thanks,
dave and kath
Lurked here for a while but our first post (so hello!) looking for some good advice.
We currently have a 7 year old offset mortgage that originally owed 110k on a property purchased for 160k - through overpayments etc, this is currently down to approx 67k.
We currently have about 12k in the offset mortgage and a further approx 33k in cash ISAs / a 2 yr cash ISA due to expire soon.
I also have an endowment policy that has run for many years from a previous house purchase that, if surrendered would provide about 12.5k even though approx 10.5k has been paid in (terrible decision).
In total, that amounts to approx 57.5k. Our mortgage rate is about 0.8% at present as it is base rate + a small amount (a good decision). We overpay by £300 a month.
We have no other debts
Would would be a good course of action at this point in time?
Thanks,
dave and kath
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most people on this board are wary of debt, so generally the answers you will get will be to clear the debt as soon as possible...
September 2016 - Back into clearing a mortgage - Was due to be paid off in 32 years in March 2047 -
April 2018 down to 28.00 months vs 30.04 months at normal payment.
Predicted mortgage clearing 03/2047 - now looking at 02/2045
Aims: 1) To pay off mortgage within 20 years - 2037
It is madness to offset or OP a mortgage with an IR of only 0.8%. You can much better rates in savings. Have a look at LTSB Classic Vantage, regular savers and cash ISA's.
Currently you can get close to 2% net above what you currently pay.
even a simple instant access will pay 2.5% so 3% net that 1.2% more than the mortgage is costing
Look at a few monthly savers they are usualy good rates.
Savings rates will track up as well so there is a chance you can keep this going for a while.
I would try to keep the ISAs intack and use every years allowances they are a use or lose and have a tax benifit long after the mortgage is paid off.
If you have to move them around you can get some between 2.5% and 3% that don't have any bonus so don't need moving after ayear unless the rates don't go up.
Who is the lender?
If barclays/Woolwich if rates go against you you can offset the Cash ISAs while you pay down the debt and keep them intact.
I think you've misunderstood the advice given on this board if you think the MSE way is to always pay down off debt asap. Collecting enough money to pay it off is sensible - actually handing it over to the bank before you have to might not be, as in this case.