Pay off a chunk?

tea_stain

Hello, lurker here

We owe 24,700 on a Woolwich offset 0.5% above base rate mortgage (yes, amazingly low, we've been chucking money at it for the last few years and we've averaged 10K a year overpayment )

We have 15,500 in the offset savings (always been big savers). We like to keep 10k and anything over has gone on house repairs/new car (OH due a new car in the next year possibly, current car is a 2004, 150k miles)

When the mortgage reaches £20k, do we pay off a chunk of £10k and risk not having a large savings safety net or wait til the mortgage has £10k owing then pay it all off with savings (which should be a bit healthier but not guaranteed). Which is going to be the quickest/safest option?
Thanks.

Andy_WSM

tea_stain wrote: »

When the mortgage reaches £20k, do we pay off a chunk of £10k and risk not having a large savings safety net or wait til the mortgage has £10k owing then pay it all off with savings (which should be a bit healthier but not guaranteed). Which is going to be the quickest/safest option?
Thanks.

As your mortgage rate is so ridiculosly low (I'm jealous!) then you should keep some of that money in savings. If there is any chance that interest rates on the mortgage are going to raise, but not do so on your savings then I'd pay off a chunk then.

There will be far more satisfaction to be gained from sitting on the money until you are able to declare yourself mortgage free I'd have thought?

tea_stain

Thanks for the reply.

Now this new chap is in charge of the BofE didn't he hint that rates will stay low for a while?

It's just so tempting to think we could get rid of the whole mortgage (and end up with no savings) rather than sit on the money and be mortgage free in theory!