Should I pay my mortgage off now and how?

popsy20

Hello, my husband and I have a £33,000 mortgage taken out in 1997 with Nationwide.

I have just been checking our savings and we have just over £20,000 between us in ISAs. I would love to be mortgage free - even though this is not a huge amount in this day and age but what is the best thing for me to do? I'm not sure how much the endowment is worth yet but we have been told there could be a huge shortfall in any event which is why I just want to pay it off now.

Any advice would be greatly appreciated.

:D:D:D:D:D:D:D:D:D:D:D:D:D:D:D:D:D

busy_b

I've been posting on here with a similar dilemma.

I suppose it's a personal choice but I think I've finally opted to offset my mortgage with my savings, as opposed to paying it all off and the savings are gone forever!

Woolwich/Barclays will allow you to offset the full amount and the money remains there for you. (There are loads of different lenders offering different types of offset mortgages, as I have found out through this site).
There are no charges to change over to Barcalys but there maybe from your lender if you are in a tie in of some sort.

I just think it gives you a bit of breathing space to know that you are doing the right thing, if you offset for a while, you just pay no interest on your mortgage and receive no interest on your savings. (I'm unsure of the difference it would make due to your savings being in ISA's and I am certainly no professional with regards to interest, etc, I'm just in a similar position to you.)

As much as I would love to be mortgage free, it's a huge decision, especially if you are paying it off with all your savings.
Good Luck!

Moneygoes2money

What is your mortgage interest rate?

Are your ISAs cash ISAs or stocks and shares ISAs or both?

If cash ISAs, what is/are the interest rate(s)?

It sounds like you have an interest only mortgage. Have you considered switching to a repayment mortgage (and keeping the endowment going)?

Have you considered overpaying on your mortgage to pay it off early?

Nationwide will allow overpayments of up to £500 per month during any special deal period. If you are paying their standard variable rate then there will be no restrictions regarding monthly and/or lump sum overpayments.

If you have cash ISAs you could consider remortgaging to Intelligent Finance's offset mortgage, which will allow you to offset your mini cash ISAs against the outstanding mortgage balance. The downside to this is the interest rate may not be as competitive as Nationwide and you may have to pay fees to remortgage but someone else on this forum may be able to give you the finer details on this option.

Are you non-, basic or higher rate taxpayers?

Kaz2904

I would not recommend getting rid of your iSA to clear your mortgage but transferring to an ISA included offset would be a good deal for you. Your ISA allowance remains safe and although not earning any interest you won't pay any interest on the amount offset.
You can then chuck any money you have to spare at the mortgage and try to pay off the balance owing. Once you have done this you can move your ISA to somewhere safe that pays a high interest rate.