Do I pay off my mortgage?

smiles1213

I would like to pay off my mortgage. I have over £40,000 in savings and a mortagage of less than £15,000, which I am making over payments on to pay off faster.

I was keeping a small mortgage to borrow more in the future when I sell my current property. But now I am unsure if having a mortgage helps to keep your credit score up and makes it easier to borrow more?

I was initially worried about large fees to take out a new mortgage, but it looks like there are better deals than my current mortage provider.

Please advise me if you can. I have put most money in good isa and other savings accounts. But I also have access to enough money to pay off my mortagage in full.

What would be best? Keep small mortgage and borrow more when moving and keep to same provider? Or pay off in full and take out a new mortgage when the time comes?

I have no other debts, so am leaning towards paying it off.

downsizer3

Do you have an early repayment penalty?

There seem to be a few trains of thought on paying off - no surprise that most on this forum are of the opinion to pay off.
I'm not sure how it effects your credit rating but in my opinion - get rid! Its a peace of mind issue in my case - in case things go wrong at work/illness etc - you'll always have your home.

smiles1213

Hi. Thank you for your reply. I don't believe there is an early penalty for paying off the motgage.

What we are worried about mainly is if we pay off the mortgage and then want to take out another mortgage at a later date when we move, there may be less mortgage deals for those who are not remortgaging. Also if we do not have any debt, will our credit rating go down?

Spiggle

Hi,

I go down the pay it off for peace of mind track too BUT I don't intend to move again.

I do remember one person on here who achieved MFdom and then went into btl and it would have been easier if he'd still had a residential mortgage but I have no direct experience and am not sure why.

If you are concerned about remortgaging later why not pay £10k off and keep a small amount of £5K in place? I think if you are definitely going to move then having a 'live' mortgage may help in terms of id, credit history, etc.

(Of course this answer ignores all the usual questions I should have asked about interest rate on savings, and on mortgage and term, monthly payment, etc. to properly analyse the cost benefit analysis!!!)

Good luck with making your decision.

All the best,
Spigs

smiles1213

Thanks for the advice, I appreciate it. I like the idea of reducing the mortgage to around £5000, in case we move. I think we'll do that.

Thanks again, it is a great forum!