what to do about mortgage

darren_l_2

We have an endowment mortgage for 27.5k with the woolwich. What i need to know is is it wise to pay off around 10k of this and reduce my payments or keep the money as savings. The tie in period is nearly up after switching from our previous lender, also should i consider trying for a remortgage ?

lisyloo

is it wise to pay off around 10k of this and reduce my payments or keep the money as savings.

Paying off the money is usually a good move but it does depend on your mortgage rate and the amount of tax you pay.
Usually it's a good move because most people are tax payers and have to pay tax on interest they receive on their savings.
You do not however have to pay any tax on money you save on the mortgage so the return is tax free, so it usually works out better for tax payers.

Do you have enough money in cash for an emergency e.g. job loss.
It makes sense to have some cash available preferably in an instant access ISA.

It is not really a good idea to reduce your payments (unless you really need to).
You would be better off keping your payments the same and paying your mortage off sooner.

also should i consider trying for a remortgage ?

Yes, but don't forget to approach your existing lender about what deal they can offer you.
Their approach varies, some reserve good deals for new customers, other like Nationwide offer all their deals to new customers.
Changing mortgage with your existing lender will save you fees and hassle (a new lender will want to do valuations, credit checks, legal work etc).

Also you will find it difficult to remortgage with less than £25K (lenders mostly aren't interested).
So consider remortgaging before paying off the £10K.
Of course this restricts you somewhat because you need to find a deal that accepts large payments.

When you are looking at remortgages then remeber to includes fees (from new lender and existing lender for leaving). This are particularly significant on small mortgage because you cannot so easily make up the difference with a lower rate like someone with a large mortgage.

Hope that helps