Mortgage Finishing Soon

dosh1

Hi

I have an interest-only mortgage and have done so for some years.

I have been able to save during this period and so put away the money required to pay off the mortgage into various ISAs and savings accounts.

I am hopeful that approx. 20/22 months time, I shall have enough money to pay off my mortgage in it's entirety.

My current mortgage is up for renewal as I am on a 2 year fixed rate.

I shall be aiming to get another two year fixed rate which should be my last.....

When agreeing a new fixed rate:

1. Does it matter what it says as the term for an interest only? Should I state I want a 2 year term or will I get charged more in doing so.
2. If I go for two years and at the end of the term I ask the bank to provide me with a total payment sum to which I pay off my mortgage. Is it normal to get charged for the final payment figure if I work it that I ask for it at the end of the 2 year fixed rate?
3. Are there any other charges I have to pay when paying off my mortgage?
4. Is it a good idea to fully pay off my mortgage? I have heard others say you should never pay off fully your mortgage but I have never worked out the logic in that statement. Is there any?

Thanks

juniordoc

Why would you not just get a repayment mortgage and then overpay, or pay at the end of another 2 year fixed term? Wouldn't you get a better rate than with interest only products?

Thrugelmir

How long does your existing mortgage term have left to run.

Are any of your savings for repaying the mortgage held in investments, i.e. equities and bonds.

Are your savings going to earn you a better guaranteed return than the interest you'll pay on your mortgage?

What is your existing lender prepared to offer you in terms of a new mortgage product. Are there product fees involved.

dosh1

juniordoc wrote: »

Why would you not just get a repayment mortgage and then overpay, or pay at the end of another 2 year fixed term? Wouldn't you get a better rate than with interest only products?

Because Interest Only gives me some flexibility if I wasn't able to save the full amount monthly.

Overall an interest only is not any more expensive than a repayment mortgage as long as I save the required amount each month to pay off at the end which I am managing to do. It gives me a little flexibility too

If I get a repayment mortgage the monthly repaymens would be far greater than an interest only and I would not be able to overpay.

Currently my interest only rate is less than interest I get on savings accounts.

dosh1

Thrugelmir wrote: »

How long does your existing mortgage term have left to run.

Are any of your savings for repaying the mortgage held in investments, i.e. equities and bonds.

Are your savings going to earn you a better guaranteed return than the interest you'll pay on your mortgage?

What is your existing lender prepared to offer you in terms of a new mortgage product. Are there product fees involved.

My current mortgage is interest only but with something like a 20 year term left.

My savings are generally CASH ISAS at a higher rate than the interest rate of the mortgage.

I haven't spoken with existing lendor yet. I will do but wanted to ask online here first. No doubt there will b product fees as there always is for fixed rate. Perhaps I should consider non-fixed rate for the remaining time?