Do I pay my mortgage off now or wait

skybird1

Please could someone give me some advice, I have recently been left some money and am in a position to pay the mortgage off. However, I have a fixed term mortgage and will incur charges, so is it better for me to wait until my fixed term ends.

I have a fixed term mortgage which ends in 31 October next year, I currently owe £81,558.12 and my monthly payments are £773.19 which includes interest of approximately £123 per month, my interest rate is 1.74% and I am on a capital and interest mortgage.

I have just received my redemption certificate and they have provided me with the following figures:
Balance b/f from annual statement £84,993.23
Interest to redemption date £659.68
Early repayment charge £2469.93
Less repayments made £3,092.76
Total Due £84,970.08

The redemption date is the 23 October.

Happytravelling

What a great position to be in!

If you're being charged £123 per month in interest for the next 13 months approximately, £123 x 13 = £1599

Since your early repayment charge would be £2469, it would cost you more to redeem now (and that's not taking into account the potential interest you could earn in a savings account which would earn you a bit extra).

You could potentially strike a balance, and increase your monthly payment to the maximum allowed over payment without incurring an early repayment charge.

I'm not sure the rules of mse forum allow people to give advice as such (just joined and seem to remember something in the T&Cs about financial advice) but this might make it easier to make a decision