Paying Off Mortgage

diamondsky

Hi,

I have an existing mortgage with 55K left to pay with Alliance & Leicester and have finished my 2 year discounted rate and five year redemption period. I have come into money that could pay my mortgage off but this will be received in 3 instalments over the next 2 years. I would like to know, should I keep the money in a savings account over this period until I have the full amount to pay off my mortgage or should I remortgage to an account that does not have any penalties associated with early repayment and pay in a number of lump sums?

hairy_cornflake_2

Hello diamondsky

I think you should consider remortgaging to an account that does not have penalties.

If you dont have enough to pay the mortgage off immediately, then there is little point in paying the variable rate via A&L

Get yourself the lowest rate possible - I suggest you talk to an independent mortgage broker who can point you in the right direction

simonjfisher

You could go for an offset deal where you put your money into a savings account so you've still got access to it but the interest on your mortgage is reduced by a similar amount.

herbiesjp

You could find a fee free re-mortgage with no tie ins - in order to allow you to pay in the amount should you wish to use the money to close down your mortgage. You could also look at offset, so the funds were there for you if wanted to take the funds out again instantly.

diamondsky

Hi,

Thanks for the advice. I will have to sit and consider my next step...

kazd

Just make sure that the interest you are earning is higher than the interest you are paying on your new mortgage. Talk to Martin's recommended London and Country, I found them very helpful.

MarkyMarkD

Given that you have a relatively small mortgage and will need to borrow even less, as you have a lump sum already, you should consider switching products with A&L rather than remortgaging, as this will often be cheaper. A&L's switch fee is £250 (or less on some "switcher special" products) and some products don't have application fees. Almost all new A&L products (except fixed rates) are fully flexible which means you can overpay without penalty as long as you don't fully redeem the mortgage account.

Hobo_2

This maybe suitable, No fees 4.24% 6mth BOE +.99% thereafter pay £99 for offset option with egg saver account no tie-ins or early payment fees

http://new.egg.com/visitor/0,,3_75370--View_1538,00.html