Offset mortgage paid early - keep zero balance or close ?

TYPHOON38

Hi,
we are going to be in a position in the next 2 weeks or so to pay the outstanding £30,000 or so on our offset mortgage in full. This will bring the mortgage to an end around 9 years early. My question is this : the lenders (Nat West) have suggested to my other half that we keep the offset account running at zero balance as opposed to closing it completely, "in case we need cheap credit down the line". So, if we do, I understand that Nat West will still have some sort of legal 'hold' over our house ? Also if the balance is zero...thick question I know - I take it we make no 'payments' whatsoever ? I am leaning towards closing completely as we have other 'cheap' avenues should we need credit down the line and I want the house to be ours. Any advice would be gratefully received ta

kwame41

First of all congrats on the early payment and interest saved. Bet it feels good :-)


I would close it.


The option of 'cheap credit' down the line is a non starter for me.

TYPHOON38

kwame41 wrote: »

First of all congrats on the early payment and interest saved. Bet it feels good :-)


I would close it.


The option of 'cheap credit' down the line is a non starter for me.

That's what I'm leaning towards thanks ! We are obviously going to get some expert independent advice re the whole thing first but I'm of a mind to close it completely.:beer:

getmore4less

you never know when you may need some money for cash flow as long as you can draw down at any time I would keep it.

The other option is to check if there are better places for your offset funds that will pay more than the mortgage rate.

Adding to a pension could be worth more than paying off the mortgage.

AnotherJoe

I closed mine. Turned out about 3 years later i could potentially have saved a few quid when i bought a car but on balance its easier just having got rid.

You really dont need "independent expert advice" because it simply comes down to "will you need a cheap loan in a few years time".

If you wont, or cant forsee it, then there's no point having it.

If you do keep it the only legal claim over your house would be when you sold it when there would need to be a little bit done by solicitor to make sure that NW are in agreement that you owe nothing before you can close it all out, so from that POV get it done now rather than find some snafu at the time that drags things on.


EDIT; Good point by GMFL about what else you can do with the money, i should definitely have put mine in my pension rather than paid it off quicker. If you are a high rate taxpayer this is close to a no brainer.

TYPHOON38

getmore4less wrote: »

you never know when you may need some money for cash flow as long as you can draw down at any time I would keep it.

The other option is to check if there are better places for your offset funds that will pay more than the mortgage rate.

Adding to a pension could be worth more than paying off the mortgage.

Thanks for the advice. I am actually about to draw a pension, including lump sum, which is enabling us to have this choice. Good point though ta !

getmore4less

I would just stick the money in the offset and have zero interest to pay, you can then make the decision at a later time.

Get used to retirement income first.

TYPHOON38

getmore4less wrote: »

I would just stick the money in the offset and have zero interest to pay, you can then make the decision at a later time.

Get used to retirement income first.

Stupid question of the day but I take it doing that there are no actual payments to make, it's a zero balance so nothing to pay right ?:huh: