Any advantage in not redeeming mortgage?

Enceladus

In this morning's post we received our Final Redemption Statement from Barclays.

Years ago I seem to recall reading that it was a good idea to not actually redeem the mortgage and to leave a small amount outstanding. But I can't remember why?

Perhaps something to do with the deeds to the property, which are now an obsolete concept? Or perhaps credit rating? Can't remember.

This was a Woolwich mortgage at inception. So should we make the final payment and pay the redemption fee? Incidentally the fee is not mentioned on the FRS. But I believe it is £40?

Also we have been sent a "Redemption Form" to be completed with a UK address to which the deeds are to be sent. However nowhere does it tell us where to send the completed form? And in any event are we likely to receive any physical deeds?

Thanks to all,

Lilla_D

Hi, if you leave a small amount outstanding, then indeed it may help with your credit rating, as there is a credit history for mortgage payments however small they are. This is especially true, if you have no actively used credit cards or loans.

Also, if you think of buying or remortgaging any BTL properties in the future, then you may have a bigger selection of lenders for being an owner-occupier with a mortgage rather than without.

Having said all the above, if you'd rather have a clean slate and be mortgage free, then it's easiest if you contact Barclays directly and clarify the last 2 points with them.