Should I close my mortgage account or leave it?

tinx

Hi, I am in the enviable position that I am able to pay off my mortgage with my savings. I intend on doing so but I am not sure whether to close my mortgage account or leave a small amount of money in the account.

My mortgage is a flexible offset that I can withdraw money at any time from and the interest rate is very low so I was wondering if keeping it there in case I needed a loan for some reason in the future would be a good idea or is it better to have it closed off and mortgage cleared.

Any thoughts on the pros and cons gratefully received?

AnotherJoe

its a personal decision. I recently closed mine as I decided I had enough cash to tide me by in case of need but if I didn't I would have kept it as I had that sort of mortgage (0.75% above BR) but I paid it off last week

tinx

Thanks for the feedback. I'm not sure whether there is any other benefit. I'm just thinking it is a cheaper interest rate for a car loan when I want to change my car but I wonder if there is a benefit of not having a mortgage account at all.

enjoyyourshoes

If you are earning more %age on interest from savings and are within the new thresholds for tax free savings, than your mortgage. Why pay it off?

New car could be paid for by cash from savings once you have made the decision.

I know psychologically its great feeling to pay it off (well I don't as I have decided to keep savings in a/c and remortgage for much lower interest currently than the savings) but financially it may not be the best option.

Max out pensions ?

Max out S&S ISA also ?

lr1277

I don't know if this is an issue anymore, but 2-3 years ago, the radio 4 programme 'You and Yours' reported about fraudsters taking over properties.

They would find a property that was owned outright (i.e. no mortgage) according to land registry records, tell the land registry that they now owned the house and then attempt to sell the house.
When discovered by the real owner, I believe the land registry is paying out compensation when claimed.

So to overcome this, I think the Land registry now has a fraud alert system.

So if you are gong to pay off your mortgage, it may be worth registering for this alert.

HTH.

AnotherJoe

The thing that triggered my decision was that my mortgage (IO but being overpaid) had only 5 years to go so it was going to end "soon" anyway, and I had no forseeable occasion when I'd want to borrow any money. A car, I could loan it to myself out of, for example some essentially now defunct ISAs paying a dismal rate.

Had that mortgage had say 20 years to go, I probably would have kept it because that's a pretty long timespan to be certain about.

I hadn't heard about this fraud, I'll sign up for that. Here's a link for anyone interested, thanks lr127

https://propertyalert.landregistry.gov.uk/