Do I use the savings?

leeclaire

Hi,

A little back round first, mortgage remaining; 53,000, minimum payments needed 400, current over payment 400/month (800 total monthly), this reduces the mortgage from 16 years to 6.5 years.
Savings; 21,000

Myself and OH have decided to really start over paying the mortgage, this first happened a few months back by doubling the monthly payments as above. Now that various things have happened recently we have a lot more funds freed up, we can afford to pay off an additional 1800-2000/month.

From various online calculators it seems with the increased payments (now 2600-2800/month), we can have the mortgage finished by January 2013, if we use the savings it reduces this by 6 ish months.

My question is, is it worth using the saving or should we keep them as a little 'nest egg'?

Thanks

mrso2b

I would be tempted to pay it off and be mortgage free. you will soon build up the nest egg if you arent paying the mortgage payments out.

mummyofonechild

Are there any redemption penalties for paying it off early, Can you get your overpayments back if things go wrong. Do you have an emergency fund of 6 months salary?

leeclaire

Are there any redemption penalties for paying it off early

No, checked with lender.

Can you get your overpayments back if things go wrong

Not sure, will need to check with the lender.

Do you have an emergency fund of 6 months salary

That would be the 'Savings of 21,000'.

I would be tempted to pay it off and be mortgage free. you will soon build up the nest egg if you arent paying the mortgage payments out

This is were I am at, when the mortgage is gone and the cars finished in February 2012, it will free up 3500/month (including the overpayments)!

Mojisola

You do need a fund of at least a couple of months - just in case something unexpected happens.

Enjoy being mortgage-free!

mrso2b

wowsers!!

what about using half the savings if you are worried?

leeclaire

I should have paid it off a few years back, but a little younger and having a passion too big with cars and a job that pays well! Spent more on these than the house originally cost. Still even if I pay it off for Jan 2013 it'll be all done in 8 years total:)