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Pay off mortgage V investment
Tandem42
Posts: 1 Newbie
Good evening everyone
Bit of a dilemma so needling sound advice. We are moving house soon and wondering whether to pay off our mortgage entirely. So I'll provide you with some basic facts to hopefully assist.
We have £160k cash savings. We have a mortgage for £101,000. The mortgage is fixed until May 2019 which incurs a penalty of £4,000 early redemption fee. The house we are buying is £60k more than we are selling for, so no requirement to increase the mortgage as we have the cash for difference in price. We anticipated the mortgage term would run for a further 12 years taking us to retirement age.
So many people have said invest the cash you have and retain your mortgage as it's the cheapest loan you'll ever have, but some are saying ditch the mortgage and pay the monthly mortgage money into a savings account instead. This seems logical to us, but wondered if there was anything we have missed by paying off the mortgage now?.
Any advice would be greatly appreciated before we make the call to Nationwide, our current lenders.
Many thanks for reading and providing advice if you are able to.
Bit of a dilemma so needling sound advice. We are moving house soon and wondering whether to pay off our mortgage entirely. So I'll provide you with some basic facts to hopefully assist.
We have £160k cash savings. We have a mortgage for £101,000. The mortgage is fixed until May 2019 which incurs a penalty of £4,000 early redemption fee. The house we are buying is £60k more than we are selling for, so no requirement to increase the mortgage as we have the cash for difference in price. We anticipated the mortgage term would run for a further 12 years taking us to retirement age.
So many people have said invest the cash you have and retain your mortgage as it's the cheapest loan you'll ever have, but some are saying ditch the mortgage and pay the monthly mortgage money into a savings account instead. This seems logical to us, but wondered if there was anything we have missed by paying off the mortgage now?.
Any advice would be greatly appreciated before we make the call to Nationwide, our current lenders.
Many thanks for reading and providing advice if you are able to.
0
Comments
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What is your pension position?0
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It depends on your preference. But ultimately, finance is completely ignorant of feelings. The cold hard numbers would dictate that you borrow as much as you can (at such low rates), and invest everything else. But only a few people have the fortitude to do so. It takes a lot of guts and detachment to be able to invest your money and borrow more, it makes people uncomfortable, hence a lot of people advise paying off the mortgage first.
Short answer: whatever makes you happy and guilt free.0 -
Personally, I would not pay £4k as an early redemption fee.
Especially as you are in such a strong financial position.Space available for rent0
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