Redundancy - pay off the mortgage or not

ExpedLdr

Hi my wife and i are late 40's and she has just been made redundant.

We owe £306k on our mortgage and have approx £300k in cash.

What is the current thinking on best ways to save, pay off the mortgage, reduce the mortgage, make over payments, etc.

My wife will not be able to work again due to a medical condition which promted her redundancy.

Any advice or guidance gratefully recieved.

Mike

kidmugsy

What is the current interest rate on your mortgage, what is the current LTV, what are the restrictions or charges on overpaying, are there any provisions allowing you to borrow back any overpayments should you ever want to, how long has your mortgage left to run?

oscardog

Offset mortgage?

You keep the savings but pay no interest on your mortgage.

dimbo61

To have a £306K mortgage I guess you are earning a very good income unless your wife is the main breadwinner.
Now You might well be advised to go and see a IFA as this is a large sum and you may want to invest a lump sum, pay off some of the mortgage ( depending on ERC,s ) and keep a healthy emergency pot
Good Luck

kidmugsy

oscardog wrote: »

Offset mortgage?

You keep the savings but pay no interest on your mortgage.

Aye, but you wouldn't want more than £85k each in an offset account, would you?

UsernameAlreadyExists

Why do you say that?

zzzLazyDaisy

UsernameAlreadyExists wrote: »

Why do you say that?

http://www.fsa.gov.uk/consumerinformation/compensation/brands

UsernameAlreadyExists

Didn't know that, do now. Ta!

EDIT: hang on though, as an offset ... it's surely not "deposited" ?
until the balance is actually in credit .. it's still a debt?

jaybeetoo

kidmugsy wrote: »

Aye, but you wouldn't want more than £85k each in an offset account, would you?

If your mortgage lender went bust the savings would be offset against the loan even if the savings were greater than £85k.

Thrugelmir

Where's the £300k present deposited. What interest is it earning?

getmore4less

You are efectively mortgage free, Ie: net debt zero.

As long as you don't mess up your investements you only need to wory about the return.

Paying off the mortgage distroys liquidity.

Going forward it is what you do with future surplus income including the current mortgage payment that needs looking at.

If there may be a plan to move and input more money into property then keeping the mortgage might be a good idea as long as it is portable and a decent rate.

loads more info needed to make sensible suggestions
Other investemets pension planning
Where is the money(usualy not a good idea to cash in ISA)
Mortgage and investment rate
Surplus income(including mortgage payment)
Any demands on funds coming up(new car, kids uni fees...)
HOw risky is your job.
Will you need a modified/different house