Paying off the Mortgage :)

tldkid · 2 December 2013 at 10:09AM

I am now in a position to pay off my 2.5% interest-only mortgage at least 4 years early.:j
I was told by a friend that its best to pay off everything except a nominal amount (say £50) because having the mortgage open means I can go back for additional lending on this account if required.
I think this is wrong because I would still be charged an arrangement fee.
Any advise please?
Also any tips on negotiating mortgage closure and the closure fees?
Thanks

opinions4u · 2 December 2013 at 11:34AM

Are you really likely to want to return for new borrowing?

If the answer is no, pay it off in full. You can still raise capital on a mortgage free property in future.

If you do leave a balance it should be faster to arrange new finance, as there will be no need for a new legal charge. Whether it will be competitively priced is a different question.