IS IT WORTH IT PAYING OFF MORTGAGE?

Bobby4puddings

Hi, I now have the opportunity of paying my mortgage off in full but cant work out if its worth it.
My mortgage redemption figure is £64000 which includes a £1246 early repayment fee.
It has a fixed 2.53% fixed interest rate which ends 30/9/2021 and I pay £408 per month with 15yrs 5mths left on the mortgage.
Do you think its worth paying the mortgage off in full early, or wait til 30/9/2021 when this fixed rate ends therefore saving me the £1246 early repayment fee?
(I already pay the max lump sum amount each year off it)
Thanks! 

[Deleted User]

How much additional interest will you pay by waiting, once you've netted off the interest you earn on your savings?

Bobby4puddings

I haven't a clue, I will phone Nat West this morning and see if they can tell me.

csgohan4

there's a mortgage calculator on the website which gives you an annual figure of costs

blue_max_3

While you think about it, why not pay 10% (usually how much you are allowed to pay off each year, but do check). That interest is on the higher side, but you'll make a quick saving there.

touch*my*food*feel*myfork

I am in near same position we have £68,000 left at 2.44% fixed until Oct 2020 but with 9y 6m left and have been looking at what to do

One idea is to pay off £18,000 making £50,000 left which I can fix for 2, 3, 5 years at a lower rate - considering the 5 years but still pay same monthly as I do now which will leave approx. £10,000 to pay after 5 years, this also means I still have a large chunk of my savings if they are needed - the interest saved for me over the term is minimal really around £1,500.

HTH

[Deleted User]

Bobby4puddings said:

I haven't a clue, I will phone Nat West this morning and see if they can tell me.

You can calculate that yourself.

But unless NatWest also hold your savings, they can't tell you what you'll earn on those.

Thrugelmir

If you make a lump sum overpayment in October 2020. What will the penalty be then? 

Bobby4puddings

I've just spent the last 45mins on that mortgage calculator and I just cant make sense of it!
(blu-max-3  I've already paid my 10% over payment and I cant do it again til this October)

Thrugelmir

At the moment appears to be a 2% ERC. Does this rate drop once you reach October? 
How much can you overpay by in October? 

Petriix

You need a slightly more involved mortgage calculator to see the interest over a given period. I put your numbers into this one and, roughly, you'll be paying about £600 interest between now and October, then around £1300 for the following 12 months. That's more than the ERC. However, find out exactly what the ERC would be in October. It's likely to be less punishing in the final year of the fix, but it's unlikely to go down by more than £600, so your probably best to pay it off ASAP. Definitely double check my figures before doing anything.