Pay off or save

Surbiton_jim

Hi

I'm thinking of paying off a lump sum. But is it the best thing to do? We are thinking of moving house in the next 12 months and that would probably mean borrowing a further £150k.

Current set-up

Outstanding mortgage - £139000
Rate - 2.09% (1.59 + BOE) HSBC
Term remaining 20 years.
Savings £25k (in Cash ISAs)

If I pay the £25k off the balance I will obviously reduce the amount and term I have to repay. However I'm concerned that if we move and need a bigger mortgage I will have to re-borrow the money I paid off but it will be at the newer (most likely higher) rate

Any help here would be appreciated

Thrugelmir

You should be earning a better rate of interest on your savings than you are paying on the mortgage at the current time.

Also you'll need to fund a deposit to move house.

So currently staying in "cash" seems the better option.

dimbo61

you have £25K in cash ISA,s which is a good savings/emergency pot and hopefully its earning over 3% interest tax free so hang onto your savings and overpay the mortgage each month for the next 12 months until you sell and buy your next property.
You have not given the value of your current property or the price of the next property you wish to buy but if you use "whatsthecost" website and put in your figures you could find out how much your monthly mortgage cost would be and start paying that amount now!
You current mortgage should be about £709 a month and IF!!! you got the rest another £150K at the same mortgage rate you would pay £1474 a month so set up your DD at £1500 each month and keep the £25K for fees, stamp duty, moving costs ETC