Short term lump available

T0PC4T

I have a mortgage with 218k left to pay and 22 years left. My employer has moved me overseas until July 2015. I am in a fortunate position to have 170k available.

As investment returns are so poor at the moment and my timescale is short, I was thinking of paying off a lot of the mortgage and then reborrowing it in 2015 when I would like to use the money to improve the house. Will this be possible?

I did consider an offset mortgage. However, I am letting the property (with the lenders permission) so the fees don't seem worth it for the £48k mortgage that will be left.

Any advice?

Annisele

I'm afraid I can't do any better than "maybe".

Whether you pay money off the mortgage now won't make any difference to how much you can borrow in 2015. If - at that time - you meet the lender's criteria for a further advance of £170k, you'll be able to borrow it back again. If you don't, you won't.

What's the interest rate on your mortgage?

bigadaj

Sounds like an offset would be ideal for you, if you pay down a normal mortgage there's no guarantee you can easily access the money again, though offset rates are generally higher.

The one problem could be the fact your renting it out. Unless your current lender allows you to move onto an offset product then you would have to look at a buy to let mortgage and the increase in rate might well not make this worthwhile.

The other thing is that in letting the house you really want. The highest mortgage you can get typically 75% as you can then offset mortgage interest against rental income, so mini icing tax. You might be better accepting the low savings rate available now instead.