Paying off mortgage question

vertex

Hi,
My fixed term mortgage is due to mature early December. After that it will revert back to their SVR (4.9%). I can pay the mortgage off using my savings. Becuase my mortgage IR has been so low - Ive been leaving my savings where they are and earning more IR. However, as soon as my mortgage reverts back to SVR, this will no longer be the case.

So I either find a mortgage where the IR is less than 2% (which I have so far been unable to do. This would mean I could keep my savings and have them earning more in interest than what Im paying on the mortgage) OR pay off the mortgage with my savings. What is the standard procedure for this? Is it simply a case of having all my savings in one place ready to pay the bank? I know they are going to charge me a £200 'admin' fee for paying off the mortgage. I suppose I could (and I obviously will) just phone the bank (Alliance and Leister!) and ask what the procedure is, but becuase I always get such useful comments from this forum, I thought Id see if anyone else has been in this position or has experience with this.
Thanks

edinburgher

So I either find a mortgage where the IR is less than 2% (which I have so far been unable to do

Tesco are offering a fix at 1.99% with a fee assuming you have 40% equity?

pawlala

I did it once in 2009 and I hope to do the same again next year. You'll need to give them a ring when you're ready to pay it off as the final total may be slightly different to that on your latest statement.

vertex

Tesco are offering a fix at 1.99% with a fee assuming you have 40% equity?

I have just come across this!

vertex

I did it once in 2009 and I hope to do the same again next year. You'll need to give them a ring when you're ready to pay it off as the final total may be slightly different to that on your latest statement.

I dont mean to pry pawlala, but did you purposefully move up the housing ladder and so get another mortgage? Is it 'good debt' to have a mortgage? In other words, does it pay off in the long term to always have a mortgage? I remember reading somewhere ages ago that this was the case. Id like to one day live in a much bigger house, and so Id like to make that as possible/probable as I can. I quite like living where I am for the time being, so the money Id be saving on my monthly mortgage payments would just be going straight into my bank account (IR is 3%).

pawlala

More often than not, in order to be able to afford that big house one needs to pay off the smaller mortgages before making the big jump, otherwise the monthly payments would be crippling. I couldn't afford to live where I live now if I hadn't paid off my first house and thus use it as equity