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Should I pay off my mortgage?
doni
Posts: 67 Forumite
I've sold my house and am living in an investment flat I usually let out. I've been house hunting for a few months but no luck yet. I'm thinking it may take a while longer before I find something suitable. The outstanding mortgage on my flat is about 48k which I could pay off with the proceeds of my recent house sale.
The interest rate is 2.5% and is out of the fixed period. Should I go ahead and pay it off or would that put me in a less favourable position when I come to offer on a house as I would need to take the equity back out?
The interest rate is 2.5% and is out of the fixed period. Should I go ahead and pay it off or would that put me in a less favourable position when I come to offer on a house as I would need to take the equity back out?
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Comments
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By paying it off, you might soon need a remortgage on an unencumbered buy to let?
Keep the cash.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
I will need to release equity when I buy anyway so will need to switch to a let-to-buy interest only mortgage. So do you think it will make any difference if I clear it now - as I'll need to remortgage anyway?0
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You'll have fewer options on an unencumbered property, so keep the mortgage. Reduce it maybe, just don't repay it all.
You may wish to get independent professional advice on current and future plans to ensure you don't do something now which will harm you later.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
Thank you - I had a feeling that may be the case.0
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