Should I pay off my mortgage discussion

turbo25

Thanks for your reply jamesd and getmore4less.

Maybe I should try and use the money to invest in an overseas property, in which case I will definitely not have any savings left.

I wonder if there are any threads about overseas property investment here...

(Berlin seems a possibility)

mrsmoneypenny9

:j i have a mortage of 37k, 20 c & i, 17 int only, my dh is being made redundant in aug, we have 35k saved, his red pment will be 15k and i have an endowment valued at 17700, should we pay off our mortage or just put everything into a savings account, btw we have used all our isa allowance for the last few years

if i pay it off, i would save 355 per month on my morgage and 55 per month endowment premium, and i would still have 30k savings:money:

i would appreciate ur comments/advice

mrsmoneypenny9

:j i have a mortage of 37k, 20 c & i, 17 int only, my dh is being made redundant in aug, we have 35k saved, his red pment will be 15k and i have an endowment valued at 17700, should we pay off our mortage or just put everything into a savings account, btw we have used all our isa allowance for the last few years

if i pay it off, i would save 355 per month on my morgage and 55 per month endowment premium, and i would still have 30k savings:money:

i would appreciate ur comments/advice

shelx

i had a mortgage of £77k over 21 years costing me £544 a month. i sat down and thought instead of having savings why dont i over pay my morgage . then i thought instead of doing that, i will up my monthy payment by reducing the years that i ow so i know pay £1000 a month but my morgage is over 8 years so i have more that halved my mortgage lentgh and saved my self £48k in interst. the more years you have the more interst you pay so reduce the years and reduce the overall amount you have to pay back. if i had your saving i would reduce the years up the monthly anount and you could be mortgage free ina couple of years.

jamesd

mrsmoneypenny9, are you really using your full stocks and shares ISA allowance? If not, using that seems interesting.

What is your current mortgage interest rate? Are you comfortable with investing instead of saving? How are your savings currently saved - how much in ISAs for each of you, how much outside ISAs?

If your savings are mostly in cash ISAs you should know that there are offset mortgages like the one from Intelligent Finance that let you move the cash ISA to their cash ISA account. Then you don't get interest on the money in therr ISA but also don't pay mortgage interest on that much of the mortgage. It's a way of keeping the savings and reducing the mortgage cost.

The mortgage savings calculators usually completely ignore the interest you get on savings or the return you'd get on investments, so they tend to paint a picture that always makes paying the money off the mortgage look good. If you're getting a higher rate on ISA savings than your mortgage interest rate you'd actually lose money by paying off the mortgage.

Long term, using stocks and shares ISA investing is the way to go, if you can handle the downs as well as the ups.

Shelx, have you worked out how much you'll lose in savings interest or investment returns and compared that to how much mortgage interest you'll save?

mrsmoneypenny9

i dont really want to invest in stocks and shares, i lost a lot of money with a PEP a few years ago and it completely put me off, i will however be keeping my SL shares for a while, but apart from that i wud rather stay clear, my current mortgage rate is 5.75%.

jamesd

mrsmoneypenny9, with a mortgage rate of 5.75% it's not worth using cash ISA money to repay the mortgage. You can get higher ISA rates so it's better just to put the ISA money in the best ISA. You'll get more savings interest than you could save in reduced mortgage interest.

If you have 15,000 in cash ISAs in either of your names alone you can get a variable ISA rate of 6.4% from Ruffler Bank. It does do a reasonable job of keeping its rates competitive.

pjala

getmore4less wrote: »

This subject has come up before on other sites,

If it was a single account like the one account effectivly a large debt that probably would be OK but the true offsets where you have seperate debt/saving probably not.

The other thing you cannot do is suddenly pay down you debt, it deliberate deprivation of assets.

There is another kind of offset where you have multiple mortgage accounts like the Woolwich/Barclays mortgage reserve, with the reserve account you can put them into credit with these it is uncertain what would happen.

How can paying down your debts be regarded as deliberate deprivation of assets?
If you use calculators, that work out your net worth, you take into account your debts and your assets. Your debts are anything you owe, and your assets are hard assets like housing etc. and savings. This will give you a hard figure on your net worth.

I would imagine that giving someone else money is deliberate deprivation, but it seems to me that balancing you books should be encouraged in a tight situation not frowned upon.

pjala

mrsmoneypenny9 wrote: »

:j i have a mortage of 37k, 20 c & i, 17 int only, my dh is being made redundant in aug, we have 35k saved, his red pment will be 15k and i have an endowment valued at 17700, should we pay off our mortage or just put everything into a savings account, btw we have used all our isa allowance for the last few years

if i pay it off, i would save 355 per month on my morgage and 55 per month endowment premium, and i would still have 30k savings:money:

i would appreciate ur comments/advice

Please correct me if I'm wrong, but redundancy payments are interest free, and without a job your dh will be paying no tax up to around £5000 per year. This means that you don't need to put your money in a tax free savings account to get the full interest while he is not working, as he can earn up to that amount anyway.

I appreciate that dole etc. etc. will need to be taken into account, so you need to get it all calculated properly. I am not sure whether a financial advisor would do all this for you, there are a few on this board - so it is worth asking.

roddydogs

Arnt we missing something here-if you dont pay off say a £30,000 off, at the end of the term, you still have your £30,000? or am i missing something, yes i know it will be devalued in the long term, but it migt be enough for a super holiday!