Clear Mortgage via savings and Loan

Mcc7

If I use my savings and borrow an additional £10, 000, I could pay off my mortgage (just over £40k)


My mortgage is fixed for 5 years (3.1%) - 3 remaining- and approximately another 15 years for
re-mortgage.


There are some very good loan deals at the moment, which would reduce my monthly payments significantly and clear the debt in less than 6 years. Downside is, I'd have no savings, but would be mortgage free, with possibility of renting out the house for £1500 per month.
Any advice?
Thanks

HappyMJ

Mcc7 wrote: »

If I use my savings and borrow an additional £10, 000, I could pay off my mortgage (just over £40k)


My mortgage is fixed for 5 years (3.1%) - 3 remaining- and approximately another 15 years for
re-mortgage.


There are some very good loan deals at the moment, which would reduce my monthly payments significantly and clear the debt in less than 6 years. Downside is, I'd have no savings, but would be mortgage free, with possibility of renting out the house for £1500 per month.
Any advice?
Thanks

My advice....keep your savings. A fixed rate mortgage will have redemption penalties.

Make sure you put your savings into accounts that earn more than you are paying out in interest.

For example 6% in regular savers, 5% in Lloyds...etc...

If you're going to let the house out you want to maximize your expenses and minimize your profit.

Interest you pay on a mortgage is a tax deduction whilst interest earned on savings is tax free.