MFW - 8/2014 or Now.

Niksan

Ok, I've been on a path to a MFW for about three years now, I didn't do one of these as I was overpaying a set amount and would make for dull reading. However, my planned target was for 8/2014 which would make me MF for my 40th.

A bit of detail.

Some event happened last year that has made my fragile brain think that I should make clearing off my mortgage priority.

Current standings

Mortgage : £18,500 @ 2.5% (11 yrs 4 months remaining)
cISA : £27,000 @ 3.0% (this runs out in two weeks so will likely be same as mortgage)


Now, with the state of affairs with interest rates and the banks getting cheaper money so don't need ours as much my brain is trying to convince the rest of me that I should pay of the mortgage now.

I'm seeing plenty of reason to do this, security for my family should anything bad happen to me, without the hassle of tying loose ends. The ability to start putting money into an ISA again, I haven't actually been funding it over the last couple of years.

But something is nagging at me saying I shouldn't touch my saving ever, that's how trained I've become into being financially responsible, hell, I even buy my own home brewing kits now.

The only downside I can see is that I lose 3 years of ISA contributions if that makes sense, but once I start paying into one again I can use my Wife's as well as she doesn't have one.

So, I'm sure there's something I'm missing in this plan of mine, so what is it? Me and logic that makes sense is mutually exclusive.

So yes, now or 16 months? Help.

jimmybrid

On a pure financial basis it is only worth paying the mortgage off if the rate you are paying on the mortgage is higher than the rate you are getting on your ISA. As this is currently not the case you are earning more interest from your ISA then you are paying on your mortgage.
As you say though, this may change when your ISA rate changes in a few weeks time, at which point it may be worth paying off the mortgage and sacrificing the cash in the ISA. If you aren't paying a monthly mortgage payment I'm sure you'll soon build your ISA pot back up. And I wouldn't be too concerned about losing a few years worth of ISA contributions.
At the end of the day you are in a situation that most would envy as your savings outweigh your mortgage, I guess you've just got to do what feels right for you.

Niksan

Yes, I'll not be doing this until my one year fix lapses in a couple of weeks, I was just looking for any caveats, that is unless some one year fixes crop up at 3% or there abouts, but even then, you're talking a difference of around, hrm, too early to do the math.

No one should be envious either, I've sacrificed a lot to try get to my goal where as I should have probably been living a life. Instead of just working eating pooping and sleeping.

Thanks for your input it's much appreciated.