Should I pay off my mortgage discussion

jamesd

jamesd wrote:

Morty_2008, I don't see any prospect of you being better off financially by repaying. It's easy to make more than 4.79%, with 8% after basic rate tax available from the Halifax International regular saver account.

cheeryoleary wrote: »

Ah, you're assuming that my mortgage rate is less than 6%. It's 6.09%, and about to rise come June 1st when I'm due to go on the SVR with an outstanding debt of roughly 12K

Close. The piece of text you quoted was addressed to Morty_2008 who had said that their mortgage rate was 4.79%, so I knew that even if they were a higher rate tax payer they could get a better rate. Writing to you I said:

jamesd wrote: »

Why pay off the mortgage when a basic rate tax payer can make more than 6.09% after tax elsewhere? Just keep making money with your stooze pot and use some of the interest you make to pay the mortgage interest.

You've answered that question now. Since you're both going onto SVR and a higher rate tax payer it's likely to be hard to find an alternative that beats overpaying on the mortgage.

DSURT

Hi
Not sure if I'm doing this right but I wondered if anyone had advice re this article.
I am retired no debts but have £12,000 mortgage with endowment paying in 4 years. I start receiving my state pention in Dec. Should I use some of it it overpay my mortgage payments?

jamesd

DSURT, better to ask in the pensions section and give (and perhaps get) a recent endowment valuation and projection then give all details of it. You can get an increased state pension (by 10.4% per year delay) or lump sum payment by delaying taking it and it might pay you to take the endowment early and delay taking the state pension. It's fairly likely to be a good choice to take the larger pension value later if your health is good, less likely to be good if you are not in good health (including obesity, smoking and such) or if you may qualify for means-tested benefits. If you just don't need the state pension income then delaying it is likely to be best if your health is OK. The average person is likely to be better off with a delay of three years, getting more pension income before their death by delaying than taking it immediately.

You should also give the mortgage interest rate, whether it's variable or fixed and lender because that will be part of the picture that helps to decide what's best.

Taking the pension lump sum after a delay is unlikely to be a good deal given the expected base interest rates over the next few years.

JMBerks

I'm about to come to the end of my 2year 4.49% fixed rate period with Halifax and with SVR looming, I'm on the search for a better remortgage deal.

In addition, I find myself with an inheritance on a par with approximately half my outstanding mortgage balance. Having checked the small print only, it appears that in any one year, I can repay up to 10% of the of the outstanding balance on my special rate product before early repayment charges are due. It's unclear whether there are any fees due after this 2year period.

Before I contact Halifax, I thought I should seek general advice -

What is the most efficient method to reduce my mortgage?
-Stay with Halifax until out of benefit period then make 100% lump sum then remortgage?
-Remortgage first and (somehow) make lump sum payment then/thereafter? (Some lenders may offer no overpayment fee)
-Any other ideas....?

Any good advice most graciously received

truescot

Quick question as I'm a bit confused.

Just got a 150k mortgage and can afford to save £200-300 a month. Should I overpay my mortgage or put my max in an ISA?

Currently on BoE +0.89% tracker (happy days!!)

Simple really. Any advice appreciated.

itcouldbeme

I am a complete newbie to this forum. I have read many many threads and it seems that there are some people out there that have a some good solutions.

So my situation: Mortage £115,000 property value £145,000 fixed rate 6.5%!! for 3 years. I took this out 4 weeks ago!!! arrghhh.:eek: there is a £3479.00 penalty for early repayment or changing the deal.

I am allowed to pay 10% without penalty. I have recently received £15,000 inheritance which is sitting pretty in my account.

So would it be better to pay my 10% into my mortgage allowance, put some of it into my ISA?givne the low share prices... Or even take a radiacal approach and bite the bullet - pay the early payment penalty and change mortgage deal

Any offers on what i should do here?

Missalllaw

Hello everyone,

looking for some advice please...

morgage is £98,000 over 18 years, im on a tracker (.9above) which is going to bring my payments down after todays announcemnet. Ive been thinking of paying extra into my morgage since reading over this website and forum over the past 6 months, but not sure if its right to pay extra or save?

I currently pay 12%(total) to works pension and 1% AVC.
I pay £125 a month for share match(buy 1 get 1 free deal at work)
1ve been paying £250 a month into another share scheme at work but because the works share price has been so low ive cancelled it the last 2 years and started again because of the newer share price deal.
i have no debt but no savings also.

my work is paying off next year, should be ok, but think it will be only 5 years left at VERY best with current employer(could be sooner).

I have no protection on my morgage also.

I was thinking of cancelling the £250 a month i pay for the discount share deal and paying this into my morgage (im allowed to do this with current deal) is this best or should i start saving??

thanks for reading, any advice would be gratefull received

DSURT

Thank you for the advice will look into it
Tony

jamesd wrote: »

DSURT, better to ask in the pensions section and give (and perhaps get) a recent endowment valuation and projection then give all details of it. You can get an increased state pension (by 10.4% per year delay) or lump sum payment by delaying taking it and it might pay you to take the endowment early and delay taking the state pension. It's fairly likely to be a good choice to take the larger pension value later if your health is good, less likely to be good if you are not in good health (including obesity, smoking and such) or if you may qualify for means-tested benefits. If you just don't need the state pension income then delaying it is likely to be best if your health is OK. The average person is likely to be better off with a delay of three years, getting more pension income before their death by delaying than taking it immediately.

You should also give the mortgage interest rate, whether it's variable or fixed and lender because that will be part of the picture that helps to decide what's best.

Taking the pension lump sum after a delay is unlikely to be a good deal given the expected base interest rates over the next few years.

lisa_s_3

I have a small mortgage, around £21k.
We are a family of 4. Husband 58 and wife 38 with 2 children 13, and 3, and our income is around £18k plus F.T.Credit.
Our mortgage will finish when my husband retires, and is fixed for the next 5 years at 5.25%. My question is do we pay off our mortgage early with savings, or just keep our savings in a bank account. We have no other debts/cards/loans etc. We dont have private pensions. Our mortgage is with N.Rock???,and we can have mortgage holidays and can get back overpayments without penalties.

Lokolo

lisa_s wrote: »

I have a small mortgage, around £21k.
We are a family of 4. Husband 58 and wife 38 with 2 children 13, and 3, and our income is around £18k plus F.T.Credit.
Our mortgage will finish when my husband retires, and is fixed for the next 5 years at 5.25%. My question is do we pay off our mortgage early with savings, or just keep our savings in a bank account. We have no other debts/cards/loans etc. We dont have private pensions. Our mortgage is with N.Rock???,and we can have mortgage holidays and can get back overpayments without penalties.

It really depends. Is the £18k between you both or just your OH?

Basically what you want to look at is rates. If you can get better rate for your money in savings (unlikely at the moment with base rate cut) then you should go for that.

Example:
-You have £100
-Savings is 8% (extreme I know), which is 6.4% after tax.
-Mortgage is 5.25%

1 Year:
Savings - £100 + £6.40 = £106.40
Mortgage - £100 + £5.25 = £105.25

So savings you would have £106.40 in the bank. But using that for the mortgage would mean there would only be £105.25 taken off. So you are £1.15 better off with the savings.

Also as above I said after tax. If you are not a tax payer you would get the 8% rate (which is why I then asked if you work, if you don't then you need to make sure you look at the gross rate, not the net rate).