Any advice would be appreciated

lyndareid

I have a repayment mortgage with Halifax. The outstanding balance on 13th April was £37,481. The rate is variable at 3.99 and, on that date, the remaining term was 5 years 1 month. Monthly payment is £677.66.
We lent our savings, £21,000, to our daughter to let her buy her home. She has now paid this back.
My question is: Should we pay £16,000 to our mortgage to bring down the term? We don't have other debts but would like to keep something in a savings account.
I am 54 and my husband is 55
I would really appreciate any advice from the forum.

M0ney

It's a personal choice but if it were me I would keep enough savings aside for 6 months worth of household outgoings and put the rest of it into the mortgage provided that there are no fees for paying such a big sum into your mortgage. The only thing that might stop me doing that is if you can get more than 3.99% net interest on your savings and I would imagine that is virtually impossible.

JCL

Agree with MOney. One other thing to consider at your life stage is your retirement provision. Do you have enough put aside? You would get an instant 20% boost to anything you put into a pension or 40% if either of you are a higher rate tax payer. Might be something to consider with part of the lump sum depending on the position you're in with retirement provision.

HelenDaveKids

Can you pay back without incurring redemption penalties, is there a limit to overpayments?

lyndareid

Hi
Thank you for your advice. There are no penalties or limit to overpayment. Definitely want to be MF asap!
I called today to find out how much I would reduce the term by with a couple of different scenarios. Answers were vague, to say the least. Could anyone help with this?
Situation at present:
Outstanding balance = £34,121 Term remaining = 4years 7months
Current payment = £677.66/month rate = 3.99
1) If I pay £16,000 and up payment by £100/month = 1year 11months remaining
2) If I pay £20,000 and up payment by £100/month = 1year 7months remaining.
This doesn't seem correct, to up lump sum by £4,000 only reduces term by 4 months?
All the calculators I've seen only show remaining term in years.
Thanks for any help

pawlala

M0ney talks.