Pay Off Mortgage or.....

Miss_Poohs

I can't decide what to do.

My mortgage is sitting at £19,400.00. I have £43,000.00 in savings, and another property with no mortgage I currently rent out.

Being that savings aren't doing much would it be wise to get a settlement figure on the mortgage and pay it off, or am I just not looking after the savings well enough.

I'm currently overpaying on the mortgage - if I continue as I am it'll be gone in 6 yrs 6 months.

I'd be grateful of any advice - thank you

MallyGirl

it depends on what rates you are getting on your savings. With the new rules you could be getting 5 or 6% tax free if you are prepared to put some effort in with multiple bank accounts and regular saver accounts. Is your mortgage higher rate than that? If so then pay it off

Miss_Poohs

Funny you should say that, that's exactly what I've been looking at, that and the regular saver at M&S.
My mortgage is 3.99% variable.
I am mindful of the fact my son is about to start further education so l'll be supporting him in that once the results and big decision is made on the next step.

Thrugelmir

Miss_Poohs wrote: »

My mortgage is 3.99% variable.

At that interest rate I'd be settling the mortgage.

Miss_Poohs

Do you think?
I did look at remortgaging but found it difficult to get any sort of deal, which I think may be because the mortgage remaining is (to them) small.

Paulosomerset

Is there anyway you could transfer the mortgage to the rental property?

Paulosomerset

You could maximise tax relief (whilst it lasts for 4/5 years) by which time the tax savings if
You are earning could help you pay the mortgage off in five years instead of six!£

Miss_Poohs

I have no idea Paul, I wouldn't even know where to go to ask if I'm honest.
The rent from the house goes into a separate account, and I lift £120 from that each month to make an extra payment to my mortgage, so l'm thinking that 6yrs 6 months will decrease.

Paulosomerset

What I mean is that if you have a mortgage interest bill against your property rental (and you are declaring the profit from it!) then you will save tax if your outstanding mortgage was on your rental house

Does that make more sense?

P

Thrugelmir

Miss_Poohs wrote: »

Do you think?
I did look at remortgaging but found it difficult to get any sort of deal, which I think may be because the mortgage remaining is (to them) small.

Have you tried your existing lender?

Remortgaging isn't worth the cost for such a relatively low amount.

Miss_Poohs

I do declare the income on my rental, and l work part time - not sure how to go about the whole transfering the mortgage thing though Paul.
I did Thrugelmir but can't say they were very helpful