Paying off House?

Ed_Zep

Hi folks,

I wasn't sure where to post this so thought I'd start here.

I technically paid it off a couple of years ago when savings exceeded the outstanding capital. I got lucky with a tracker mortgage, so I've only been paying 1% since the BOE rate went to 0.5%.

I'm not here to brag but ask your opinion as it may well affect you, too.

Since the absolute mess the economy has become and now Cypriot people having money stolen from their bank accounts, I'm wondering should I just pay it off.

Do you think the same could happen here? :eek:

I've been keeping most of my money in a cash ISA.

My other concern would be being in the middle of a house purchase. Say, a person has completed. The money's in the a/c and this happens.

Thanks.

purch

My personal opinion is that not having a mortgage is a great relief/release.

I know the clever clogs financial planners/salesmen would like to tell you that you should try to maximise your returns, and look at the 'return' you can achieve, but the return they never take into account is the freedom and piece of mind.

In the end it is up to each individual, but I would always say pay off the mortgage first.

System

I wouldn't, wait for the day your IR on the mortgage goes up to higher than your savings, then pay it off.

dryhat

Owning your own home outright is a major step towards financial security, regardless of the prevailing interest rates.

It used to be encouraged before the debt junkies took over.
Now they just want you in perpetual debt.

PaulF81

Best bet would be to diversify your USA accounts across a couple of banks.

HSBC gets my vote.

Jonbvn

purch wrote: »

My personal opinion is that not having a mortgage is a great relief/release.

I agree with this entirely. Whatever fate throws your way, you know the house cannot be taken away from you.

Percy1983

Interestingly I would sit tight if the savings are safe enough and spread correctly accross banks.

The second your mortgage costs you mre than your savings earn pay it off.

On the flipside it would be nice just to clear the mortgage and have no worries.

Only you have the answer which you would prefer.

Generali

Pay off your mortgage.

This absolutely goes against what I would have said 5-6 years ago but we live in strange times. You want proper assets that provide an income right now. The 'imputed rent' from your home (that is the rent that you don't have to pay as a home owner) is pretty valuable right now I think.

Niksan

I'm intrigued, would owning your own home outright have other implications, like cheaper home insurance and what not, or does that have no relevence what so ever? Just curious as if banks have an interest on your property maybe premiums might be slightly higher.

chucknorris

Niksan wrote: »

I'm intrigued, would owning your own home outright have other implications, like cheaper home insurance and what not, or does that have no relevence what so ever? Just curious as if banks have an interest on your property maybe premiums might be slightly higher.

I don't think it would affect the premium, but it does allow you to have no insurance if you so wish.

Percy1983

chucknorris wrote: »

I don't think it would affect the premium, but it does allow you to have no insurance if you so wish.

This is true, with that I wouldn't risk it for the small amount it costs.