Is it cheaper to keep my mortgage

Jance9

Hi, I have an offset mortgage, which means I collect a 'reserve' which I can take at any time and it just adds to my mortgage. This year I finish paying off my mortgage, but I am wondering if it would benefit me to take my 'reserve' and keep the mortgage going. I am hoping to move in the future and would need another mortgage to do this. My actual mortgage payments at the moment are offset with my current account, which is higher than my mortgage, so I do not pay any interest. If I take my reserve, I will still not pay any interest. My question is: does it pay me to keep a mortgage going rather than applying for a new one when I do decide to move? Any opinions would be great. Thanks Forum members

HappyMJ

Jance9 wrote: »

Hi, I have an offset mortgage, which means I collect a 'reserve' which I can take at any time and it just adds to my mortgage. This year I finish paying off my mortgage, but I am wondering if it would benefit me to take my 'reserve' and keep the mortgage going. I am hoping to move in the future and would need another mortgage to do this. My actual mortgage payments at the moment are offset with my current account, which is higher than my mortgage, so I do not pay any interest. If I take my reserve, I will still not pay any interest. My question is: does it pay me to keep a mortgage going rather than applying for a new one when I do decide to move? Any opinions would be great. Thanks Forum members

My advice keep the mortgage going. When you want to move you can put a deposit down on a new property just by using the reserve. You don't have to worry about selling up first or being part of a chain you can just put the deposit down get a mortgage on it and attempt to sell your property whenever you need or even if you want to.

ViolaLass

bear in mind that you can't 'keep' the mortgage when you move if you want to sell the place you're in now - it is secured on your current property.

getmore4less

Is this Barclays, if it is...

If you finish paying the mortgage early/end of term the reserve disappears when the mortgage account closes.

You can't extend the mortgage by using the reserve.

The reserve just offsets as a negative amount so unless the other offset account are more you start accumulating interest.

minimike2

As getmore4less says - You can't just use the reserve to keep it going.

You can apply to extend the term of the mortgage though, which will then by default allow use of the reserve for the length of time you extend it by.

All subject to application of course.