Should I pay the whole mortgage off?

dazcouz

Hi

Was just wondering if I can quickly get your opinion on something.

I took out a 35 year repayment mortgage in June 2011. Over the past seven years it has reduced from £94K to about £83K at £390 a month payments (paid so far approximately £21K interest). I haven't made any overpayments.

My fixed rate deal has ended and is now at a 4.74% standard variable rate or I can switch to a 1.99% 2 year fixed deal (Santander) by 7 June.

I can also, if I wanted to, pay the mortgage off in full as well as the £225 account fee and was wondering if this is the right thing to do.

I would probably save thousands of pounds over the next 28 years by not paying interest.

stevenhp1987

If you have the full money to be able to pay it off, you need to compare the difference between your rate of interest on the mortgage and rate of interest on your savings.

If you are earning more on your savings than you are paying in interest on the mortgage, then don't pay it off, otherwise do so.

At 4.74%, if you cannot re-mortgage, I'd definitely pay it off. However, if you have so much, you might be able to get a great deal on say a 60% LTV where the interest on the remaining savings could beat the mortgage costs.