Reduce Mortgage or Save

theoutdoorman

Approximately a year ago I suffered a major heart attack, the critical illness cover that I took out many years ago has just paid out £29,000 it was originally £63,000 but my heart attack came 1 year after my 50th birthday so its at a reduced rate arhhhhhh.

I currently have an offset mortgage £69,000 with Nat West which has another 10 years to run.

I have very little life assurance so would not have enough to pay the mortgage if I was to die. Unfortunately due to the severity of the heart attack I am unlikely to get any life cover a reasonable price for at least another 3 years

Should I put the money in a savings account and use this to offset the interest on almost most of my mortgagee or should I reduce the lump sum.

Thanks

getmore4less

What dependants do you have?

Whats the rate on the mortgage?

What income wil there be in the household?

theoutdoorman

Currently we are paying 3.75% interest

The income coming in is not currently a problem as my wife earns £45K and I bring home about 20K part time

We currently have one dependant who is just finishing university but I expect we are going to have to help her for at least another year with the current job market.

We are currently paying £710 / month of which £218.75 is in interest.we could pay slightly less as I see that we will finish paying the mortgage in Nov 2020 which is 6 months early

dimbo61

With your wife earning £45K you wont get any benefits if you have to stop working so having the £29K in the offset account will help reduce the interest you pay on the mortgage.
If you can easily afford the current mortgage then keep the payments static after you pay the lump sum into the offset ( clears the mortgage quicker) and you still have ( cash!) available for your family if you need it.
Take things slowly and hope your health improves ( better diet, exercise, NO SMOKING ,less stress!!)
Consider cash ISA,s if you can get a better rate than the mortgage

kingstreet

Sorry to put this bluntly.

WHO ON GOD'S GREEN EARTH SOLD YOU CRITICAL ILLNESS COVER WHERE THE BENEFIT FOR A HEART ATTACK DROPS AT AGE 50????

:mad: