Advice Needed

Iced_Bun

Hi all I am in a bit of a financial dilemma at the moment (its a nice one though)

I have around 18 - 19K to pay off my mortgage (statement due October) I have been keen to pay it down so have been overpaying for years and expected to get rid in about 5 years.

I have however had a really nice surprise of an endowment maturity I expected to be about 13K now due to pay 22K in november. This would obviously mean that that I could clear the debt off this year and finally own my own home :j

However these are the current facts and circumstances which might not make this the best decision despite how good it would feel so I could do with some advice/thoughts please

The mortgage rate is fabulous at 0.68% tracker with Woolwich (those were the days I know!!)

My job is reasonable secure but never guaranteed

I have savings of around 20K outside of the mortgage

The only other debt I have is a car which I can easily cover on my wages

No credit cards or other debts

Currently paying £350 per month to the mortgage which I would switch to a savings/pension/or some other vehicle if the mortgage was paid

So if I pay the mortgage off I will be left with a few spare K for the savings or house improvements

Would appreciate common sense thinking on this as my heart says pay it off but my head says ask MSE first

Thank you for reading

Busy_Mee

I also have a Mortgage with the Woolwich (0.69 tracker) and instead of overpaying the mortgage put the money into ISAs which pay a higher rate of interest than is currently being paid on the mortgage. You may have already used up your ISA allowance, but there are plenty of current accounts paying better rates of interest.
You mention you have a car loan - what rate of interest are you paying on that ? If it is a higher rate than the mortgage - then that would be the first debt I would pay off.

catshark88

The head's decision would be to pay off whichever debt incurs the highest interest, or make a linked investment (put it somewhere where you can earn more interest than the mortgage costs).

The heart's decision? Well that is entirely up to you. There is something very nice about having no mortgage though....

A good choice to have and really depends what matters most to you.

Iced_Bun

Busy_Mee wrote: »

I also have a Mortgage with the Woolwich (0.69 tracker) and instead of overpaying the mortgage put the money into ISAs which pay a higher rate of interest than is currently being paid on the mortgage. You may have already used up your ISA allowance, but there are plenty of current accounts paying better rates of interest.
You mention you have a car loan - what rate of interest are you paying on that ? If it is a higher rate than the mortgage - then that would be the first debt I would pay off.

Thank you yes I have always had the view of my parents of pay your mortgage off first so I think its that that is ruling the heart decision. The car is one I could pay off for sure and then the rest into savings. Looking forward to higher ISA allowances although I think you are right the current accounts often pay more.

catshark88 wrote: »

The head's decision would be to pay off whichever debt incurs the highest interest, or make a linked investment (put it somewhere where you can earn more interest than the mortgage costs).

The heart's decision? Well that is entirely up to you. There is something very nice about having no mortgage though....

A good choice to have and really depends what matters most to you.

Yes catshark88 you're right the feeling would be lovely. I just dont want to end up asset rich cash poor

Thank you both its a nice position to be in I know and I will keep mulling this over for a while to get to the right decision for me

Beckyy

It would make more sense financially if you could put the money into a savings account which made more interest than than you are incurring on the mortgage, but for what it's worth I would be keen to get shot of the mortgage, or get it down to a very small amount if that didn't incur an ERC. Well done on getting to here