Query about Repaying Mortgage and Loan

ForOurFuture

Have trawelled through lots of threads but can't find anything specifically answers my queries. So apologies if these questions have been asked before.

My partner has recieved enough money to repay his mortgage and loan. However this money came unexpectedly and due to him being tied into his mortgage until 2011 he will be charged a redemption fee and a discharge of mortgage fee. My question is: would it be worthwhile him making a one off payment to reduce the mortgage to a minimal amount or should he just pay it off? The redemption figure will be about 2K. Also Should we query the dischage of mortgage fee amount currently £250?

He also has a loan with the same mortgage provider (Northern Rock) and took out loan protection. My second question is: am I right that that the total amount charged for the loan protection will have to be paid even though he has repaid the loan early. The loan protection amount comes to about 1K. So should he cancel the loan protection wait a while and then pay off the loan?

Thanks for reading and for any advice you may have.

silvercar

compare your mortgage rate with the interest rate you could get on the money in a savings account (after tax). If the mortgage rate is more expensive by a lot then its worth paying the mortgage off and losing the 2k redemption. if its not then put this money in a savings account until 2011.

it may be worth having a complete finaancial review with an IFA if you have unexpected money; you can clearly afford your mortgage so this extra money should be working for you.

ForOurFuture

Thanks for that suggestion that is something I did not consider. The rate he got was quite low but interest rates have gone up so I think we will need to find a good place for the funds.

homer_j_3

if you want to pay off over 5-10% you pay the redemption charge on the amount you repay. You would need to take your mortgage details with you if you are going to go for a financial review.