To pay off or not to pay off?

nmaxwell

I now have just under £10,000 left to pay on my mortgage with approx. 2 1/2 years still to run. Monthly payments are around £330. I also have just over £11,000 sitting in a bank doing nothing. The question is... do I pay off my mortgage or sit tight and let it expire?

Anomaly100

Do you have any other savings? All very well and good to clear the mortgage but you need an emergency fund in case of repairs, job loss etc.

dark^knight

I would put aside some of the £11k in an emergency fund and pay the remainder towards the mortgage. This will lower the monthly interest payments.

Then over-pay as much as possible every month until it's all paid off.

pjread

What's the interest rate on the mortgage...?

What are you getting on the savings, and what could you get?

Is there anything you need the cash for short-term?

you really can't answer the question without this info, at least not without some caveats

amycool

Any early repayment charges?

gavted

As previously stated, it largely depends on the interest rates (savings and mortgage).

When I paid off my first mortgage, there was no ERP and we had been overpaying quite a lot each month (as well as a small amount into savings).

I'm now back on the repayment treadmill, with a target of 7 years (the wife thinks its 10, she likes surprises :rotfl:).

If you pay off the mortgage, consider how long it would take you to get back to £11K savings, which (taking no over-payments into account) would be about 30 months. :eek:

Having said all that, life seems much brighter when its gone. You get a definite spring in your step. So I would probably hit the savings and pay it off. :beer:

ourcornercottage

If there are no charges pay it off, it will give you a psychological boost for saving and give you peace of mind. That's what I'd do :-)