Worth keeping a mortgage active even after it is paid off?

shireknight

I've worked hard to pay my mortgage off early and fingers crossed I'm on target to finally clear it ten years before the original final payment date.

According to the T's&C's, in addition to the final payment there is a special one-off charge to close the mortgage (can't for the life of me remember what it's called) and I'm just wondering if it's worth making the final payment so the mortgage balance is £0 but not paying the closing lump sum which I assume would mean that technically the mortgage is still running.

The advantage I can see to this is that if say in five years time I want to borrow a large sum of money then I can go to my bank and borrow it on my already existing mortgage account rather than on a personal loan and therefore hopefully get it on a lower interest rate.

Does this make sense or would it be better just to pay the lump sum and get the mortgage settled and closed as quickly as possible?

Thrugelmir

shireknight wrote: »

The advantage I can see to this is that if say in five years time I want to borrow a large sum of money then I can go to my bank and borrow it on my already existing mortgage account rather than on a personal loan and therefore hopefully get it on a lower interest rate.

Not how it works I'm afraid to say.

Best to settle the mortgage entirely.

shireknight

Ah ok that's a pity, I'll clear it off then

kingstreet

Check if your lender allows "re-draws" of overpayments.

If it does, your plan may have merit.

For example, if you are with Nationwide on its 2.5% BMR, keeping the mortgage open would mean you could redraw and pay that rate again in future (or BoE + 2% if different by then).

cod3

Hi shireknight

Take a look at post #3 on this thread

https://forums.moneysavingexpert.com/discussion/4684427

It might be interesting to you.

Dave_the_Ginger_Cat

If there is a physical deed pack, you may also benefit from the lender looking after it rather than you