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Should i pay off my extra mortgage or keep the cash?
cici71
Posts: 111 Forumite
Hi.
Bit of advice pls. I have an interest only mortgage (£137,000). Interest v low and i pay £275 a month with 10yrs left. Happy with this as renting a similar property in my area is over £1000. We intend to sell up and move by then so this will pay this off when the 10yrs is up. I have an additional mortgage which is on a capital and repayment - it is £5,500 and interest i think is about 2.09%. I have 10 yrs left on it. I have just been left some inheritance. Nothing major so can't pay off my main mortgage but will be nice to do some renovation work in my house etc and have some left with no debt and money to pay bills comfortably etc. I wanted to pay this £5,500 off as mentally it's a good thing to do. I've just worked out that by paying it off i do save £694 but this is over 10yrs so it's actually not that much? Would it be better to keep the £5,500? Any opinions gladly received ;-)
Bit of advice pls. I have an interest only mortgage (£137,000). Interest v low and i pay £275 a month with 10yrs left. Happy with this as renting a similar property in my area is over £1000. We intend to sell up and move by then so this will pay this off when the 10yrs is up. I have an additional mortgage which is on a capital and repayment - it is £5,500 and interest i think is about 2.09%. I have 10 yrs left on it. I have just been left some inheritance. Nothing major so can't pay off my main mortgage but will be nice to do some renovation work in my house etc and have some left with no debt and money to pay bills comfortably etc. I wanted to pay this £5,500 off as mentally it's a good thing to do. I've just worked out that by paying it off i do save £694 but this is over 10yrs so it's actually not that much? Would it be better to keep the £5,500? Any opinions gladly received ;-)
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Comments
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you could put that into bank accounts and cycle money around and it would get you more in interests and incentives than it would get you on interest savings. for a mortgage for 5.5k for 10 years left. i i think i would pay this off personally that is one less expense to worry about. The payments must be tiny on that.1
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Hi - yes it's just £53 a month so continuing to pay that isn't really a problem which is why i was thinking would i prefer to keep an extra £5,500 in the bank.0
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If you have no emergency fund, then keep it. Otherwise, just pay if off and save the £50 each month.
It doesn't make sense to pay £700 to keep such a small sum in your account for 10 years.2 -
£5500 2.09% over 10 years is £51pm £600 interest
£275pm on £137k is 2.4% you would be better of paying of a bit of that one.
If you have a decent LTV you should be able to get that well under 2%1
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