Should I pay off the repayment part of mortgage?

nsp33

We currently have part repayment and part interest only on our mortgage.

We now have enough money to pay off the repayment part, I am wondering if it would be worth our while paying off the repayment part of the mortgage, or whether to pay a bit off of the interest only part - or even just to keep the cash.

Does anyone have experience or independent advise please.

ViolaLass

What are the interest rates for each part?

nsp33

Forgot to say that it is an offset mortgage - Interest rate is 1.25%

We are looking at moving our money/current account to a different bank tho (possible Santander)

We reduced the interest only part a few years ago as endowment was ment to cover £30k, but obviously won't - we reduced that part to £16,500.

ViolaLass

If it's all on 1.25%, I wouldn't be overpaying anything. You can easily earn a higher rate than that on savings.

TrickyDicky101

ViolaLass wrote: »

If it's all on 1.25%, I wouldn't be overpaying anything. You can easily earn a higher rate than that on savings.

...dependent on income and marginal rates of tax.

ViolaLass

TrickyDicky101 wrote: »

...dependent on income and marginal rates of tax.

Even 3% at 40% tax beats it.

TrickyDicky101

I'm not arguing the numbers but clearly tax effects need to be considered. Admittedly as does flexibility and probably a whole host of other considerations personal to the OP