Would Appreciate Some Advice Please.

BostonR

Have been considering various options but wanted to sound out this very helpful board. My current circumstances are:

House Valued at £1.3M
Outstanding mortgage at £90K
Monthly mortgage payment £900
Joint net income £7K month.
Savings in bank £80K
Other savings/shares valued at £70K
No other debt.
Both aged 55 and want to continue to work (at the moment)
1 x Final salary pension.
1 x DC pension.

Is there any point in paying off the mortgage? Should I want until we eventually downsize in 5yrs?

MortgageMamma

BostonR wrote: »

Have been considering various options but wanted to sound out this very helpful board. My current circumstances are:

House Valued at £1.3M
Outstanding mortgage at £90K
Monthly mortgage payment £900
Joint net income £7K month.
Savings in bank £80K
Other savings/shares valued at £70K
No other debt.
Both aged 55 and want to continue to work (at the moment)
1 x Final salary pension.
1 x DC pension.

Is there any point in paying off the mortgage? Should I want until we eventually downsize in 5yrs?

From a purely financial perspective I expect the main consideration would be is there any savings to be made - are yo paying more interest on your 90k mortgage than you are gaining on 90k savings?


Other than that its a very personal decision - allowing the mortgage to tick along is good for your credit rating but loans. credit cards, bank accounts do that too so it won't have much impact. Lending money on an unencumbered property should you need to capital raise in future would reduce your selection of lenders. But there again there is the financial release of owning a property outright without a mortgage. I do think with your level of wealth you may want to seek some inheritance tax advice from an qualified independent financial adviser., if you have not done so already

AnotherJoe

You must be spending a lot each month to not have any more savings than that.

Unless your mortgage is a very high rate, rather than paying it off, you are probably best off putting your excess money into a pension as at least one of you will get high rate tax benefit, eg each £6k you put in a pension nets you £10k in the pension of which you can take £8k out net of tax once you start drawing it down.