Pay off or extend mortgage?

Acquinas

I am nearly 54. My home is worth about £220k and I have about £16k left on the mortgage. It’s a Barclays base rate tracker and the term ends in 5 years. I have enough savings in an offset account to ensure that Idon’t actually pay any interest. But is there any advantage in just using the money to pay off the mortgage now? It would save me about £300 a month, but in effect the offsetting simply means that I am doing that by instalments over thenext 5 years interest-free anyway.

One thing that has been bothering me is this. If I paid if off in full, but then decided that I wanted to take our some new borrowing, how much hassle would it be to get a new loan? For instance, if I wanted to borrow a few tens of thousands to buy a holiday home, what would be the chances of getting that on a long term mortgage given that I would be paying it into my 70s? The inclination is to extend the current mortgage by a few years if I can so to keep a source of borrowing open to me.

getmore4less

Just let it run full term it costs nothing an you keep the line of credit.
You have the offset money and probably a mortgage reserve, if you resisted when they tried to take that of you, which is cheap money should you need it

If you do access the cash just check what you need to pay to keep on track.

As for extending term you will need to ask if they will do it on the same terms.

Acquinas

Yes. I do have a currently unused mortgage reserve of £36k. I had borrowed about £19k from it for some home improvements, but paid that off earlier this year when I had a bit of a cash windfall. But obviously the reserve itself will come to an end when the mortgage itself does in 5 years. I think Barclays do an annual review of the reserve limit too, which implies a bit of a "use it or lose it approach".