Pay off or get new mortgage?

May5

We are coming to the end of a short fix,  and thinking of moving in a year. We could pay off the mortgage now and live mortgage free for a year, but may need to borrow a low LTV in a year to be able to afford what we want. Instead of paying off, we could go for a short term low interest portable mortgage.  Would there be any logistical benefit having a portable mortgage in place before we move rather than having to start from scratch to get a new small mortgage in a year's time? Thanks 

dimbo61

Not all mortgages are portable !
Is you have the income to get a mortgage now what will change in 12/18 months if you pay off the mortgage and build up savings

May5

Thanks. This is really not a financial query, I'm just wondering if is would be easier to have a portable mortgage in place on our current house before we move to a bigger one in a year, rather than having to get a new one in place when we do move?

dimbo61

Like I said there is No guarantee that any mortgage product is portable !
The lender may not want to lend any more money due to the market or government policy in 12/18 months time you are then  tied to that lender unless you pay the ERC.
You can't search the whole of market for the best deal as you might have £xxxx amount at a good rate but have to pay a much higher rate for the rest.
So why not pay off the exist mortgage if No ERC,s and build up savings to help pay for some of the costs of the new property.

May5

Thanks very much, I appreciate your input, that all makes sense. 

Mickey666

Given the uncertain economic landscape for the next year or so, my instinct would be to pay off the mortgage and maybe pay more into your pension scheme(s) to take maximum advantage of the tax efficiencies.  If there is another period of lockdown (winter approaching, flu season will likely suit covid-19, not vaccine in sight, etc) or the economy tanks anyway because of people's reluctance to fully re-engage, then anyone in a debt-free situation is likely to be in a better position to 'hunker down' and weather the resulting economic storm . . . especially if jobs are at risk.  And if all that turns out to be wildly pessimistic and everything in the economic garden turns out to be rosy in the next 12 months or so, then what have you lost?  Nothing that I can see, because if things do get better then, presumably, new mortgages won't be hard to find.

Gonzo

Pensions are tax efficient, but they aren't like savings accounts where you can just put money in and take it out whenever you want (I'm conscious you said 'maybe'). If you'll need access to that money, it'll need to be in some kind of ISA or something I would think, unless you can afford to do both things! 

May5

Thank you very much