lump sum - pay off remainder mortgage or save for rainy day as economy currently very wet?

robbiepat

I have just got a lump sum payment for £35k, almost exactly the remaining sum of my mortgage. I am 52 and work in very volatile industry (arts). I have had good 3 or 4 years (until corona) recently - though this has not at all always been the case - and have managed to pay off all my outstanding  debts apart from my mortgage. Should I pay off my mortgage? Will repaying completely affect my credit rating negatively? I currently have about 7k savings in bank to live on, but no work in foreseeable future. I am not the most money savvy, so advice most welcome. 

FtbDreaming

With a job like yours I’d probably look at keeping it accessible incase you don’t get work. I’m assuming your monthly mortgage payment aren’t that high. 

Lumiona

Personally I'd save it as an income buffer due to volitile income with a view to use it to pay off the mortgage in a year / 6 months if you haven't needed it. 

enthusiasticsaver

What interest rate are you paying on the mortgage?  I would hedge my bets and use some of the £35k to overpay the mortgage but in view of your job security hold a good proportion back.  Are there any penalties for overpaying?  Most mortgage deals allow you to overpay by 10% so if your mortgage is £35000 you could overpay by £3500 this year and next without incurring penalties and still leave a reasonable amount accessible in case of liquidity issues. 

robbiepat

there are no penalties for overpayment, believe it or not (I did check). Sounds like doing a bit of both is the sensible option. 

Tropically

Keep 12 months of living expenses and then overpay with the rest.