Decision and Advice Needed: Pay it all off or Save

Tigermakabelli

Hello Need some advice

My current mortgage deal ends in July 2020. I have 80K left to pay off my mortgage. I have been overpaying for about 15years. Last year i stopped overpaying. House value is about 250K. The interest on the remaining amount in the current climate if I carry on normal replayment on a similar rate would be about 17K for the last 10 years.

I am now in a position to pay off the mortgage and with my current savings regime would have around 6K in savings as an emergency fund by July 2020. I have two children (11 and 13) so they have those sort of expenses at that age. (trips,clothes, lunch , sports clubs day to day other costs etc etc) Wife has her own job etc and both kids will probably have around 15K savings by the time they are 18 to start them off. I have no other savings, income, sources of income apart from my job.

I dont have a fancy car and have no intention of buying a fancy one. Debts all cleared.Have a decent job - and working for a salary was the sole aim to pay off my mortgage when I started working.

I am blessed as I now see this goal can be achieved but am now undecided if i should pay it off or not and what difference would it make. We may want to buy a bigger house in say 2 years - not decided.

Should I pay it all off in a lump sum, or pay 40K or carry on as is and save?

I would perhaps have to carry on working in a job I dont really love or would perhaps love it more knowing I dont have a mortgage etc. Have no business ideas and not business minded and no other ideas what I would do with the 80K if I did not pay it off. I dont fancy a BTL etc.

I am 45 years old.

Your advice /views would be welcome.

bexster1975

Hello

You are in a fantastic position, so very well done on giving yourself these choices.

I don't know anything about your mortgage, but do you have/could you get an offset? It just means the best of both worlds. You put the cash to cover the mortgage into a savings vehicle with your mortgage provider and pay no interest on the loan. It means the cash is still there if you want/need it, and whilst the total mortgage debt is covered by savings no interest paid. To maximise your financial options, this is unlikely to be the most efficient option. It really depends on your goal.

With no other savings, is it worth considering high ( er) interest savings/S&S ISAs? Just another option.

In terms of what to do jobwise, with no mortgage you might consider retraining, working part time etc depending on how you feel about your current role ( which your post suggests may not be 100% positive ).

I wouldn't hurry a decision. Maybe enjoy the fact you have the choice at a still relatively early stage in life.

Good luck

Bexster