Good time to clear mortgage with savings?

DiggerUK

Debt is debt. A mortgage is debt. Clear the mortgage as your number one financial objective.
You’re so close to doing that, and would have all your income to yourselves. Then you can decide what’s next.
No need to worry about rainy day funds if mortgage has gone, at the moment loans are cheap as chips. You could set up regular saver account with the freed up mortgage repayments and build a fund if it bothers you that much.

I may sound old school regards debt, but it’s the best school I ever attended..._

ColdIron

DiggerUK wrote: »

No need to worry about rainy day funds if mortgage has gone, at the moment loans are cheap as chips.

Pretty sure I disagree with this

Sarastro

There's no real point having that much sat about in a low interest saving account; although you should keep the standard 'emergency fund'. I would suggest making some extra contributions to your pension would be far more tax efficient and worthwhile long term than paying off your mortgage early. Your mortgage is quite small and it doesn't sound like the repayments are a problem. Do you know where you are in terms of pension pot? How much is this likely to give you when you retire?

DiggerUK

ColdIron wrote: »

Pretty sure I disagree with this

We used to be the same. Then we looked at our rainy day accounts and realised all we were doing was dipping in to them on very infrequent occasions, apart from that, they weren’t doing what we designed them for. So we ran them down and bought...you guessed it.

LJC80 asks if they should use their savings to end mortgage, and start saving again, I think they’re spot on..._

jamei305

The worst case scenario is if you invest all the cash in shares and then there is a market crash just as interest rates rocket, making you unable to afford the mortgage payments and very reluctant to sell your investments at a loss to pay down the mortgage.

BoGoF

If you are keeping the savings then you can beat your rate with various non ISA accounts.......have a look at the savinga section of this site, 1.3% with Birmingham Midshires for example

atush

I paid mine off 3 years ago and it's the best thing I ever did.

Maybe, maybe not. If you neglected pensions to do it

atush

IMHO the best time to pay off a mtg with savings is A- retirement or B- when rates go up.

At these current low rates it pays to fiddle with current accounts, regular savers (which would be easier for you to do) and investments

AnotherJoe

grandst wrote: »

Pay off debt while we have the lowest rates ever. QE has distorted investment markets, returns have been borrowed from the future.

I would do the opposite. Especially with inflation higher than interest rates, every pound you pay off now is at "full value" whereas if you can pay it off in say 25 years time with money thats kept pace with inflation (eg your earnings or investments) that pound you borrowed will be worth substantially less.

AnotherJoe

jamei305 wrote: »

The worst case scenario is if you invest all the cash in shares and then there is a market crash just as interest rates rocket, making you unable to afford the mortgage payments and very reluctant to sell your investments at a loss to pay down the mortgage.

Why would a market crash

make you unable to afford the mortgage payments