Pay it all off??

_Moving_On_Up_

After thoughts/opinions please!
We currently have a balance of around £76k left on our mortgage. We are in the final year of a 5 year fixed rate at 2.59% and had always planned on paying off the mortgage with savings when the fixed rate ends on the 31st December this year. There is currently an ERC of 1% if we pay it off before this date, but we are earning virtually nothing on the savings we have (circa £10 a month) so we're thinking that, even with the ERC, it's worth paying it off early as we'll save for more in the interest charges than the interest we're earning. If we pay the mortgage off it will leave us with around £40k in savings, so we still have a good buffer as a backup.

I'm thinking that, financially, it makes sense, unless I'm missing something? Or does it make sense to wait until we don't have to pay an ERC?

Zola.

Savings interest rates are so poor at the moment, you have a decent cash backup buffer... what age are you? What about job security etc?

Do you invest in an ISA, or pension? If you have a sizeable amount in either, or both, it would be very tempting to kill the mortgage if I was you.  

[Deleted User]

100% pay it off. You’ll be MF and have £40k savings still, that’s incredible. I would just take the ERC on the chin, that’s certainly what I will do very soon.

Good luck to you x

_Moving_On_Up_

I'm 37, DH is 41. I'm currently not working, DH is and is in a secure job. 
Circa £75k of the savings is in an ISA but that only earns around £6-7 per month. We have £20k in a bond account that we locked in for 3 years 2.5 years ago which earns around £24 per month. DH puts 5% of salary into his pension each month which is matched by his employer. Our monthly mortgage payment is around £800 per month, so the plan was if we pay the mortgage off to put most of what we would be saving on the mortgage repayment into savings to start building that up again, and maybe look at investments as long term options for retirement.

I've rang our mortgage provider to request a redemption statement so just waiting for that to come through and make sure the sums add up. Very excited at the thought of being mortgage free!

Zola.

Exciting, you should definitely look to invest in a S&S ISA and into a pension after though.
Being mortgage-free will be amazing I am sure!

Thriftmaster1973

You need to work out whether waiting till end of fix is cheaper or paying the 1% fine.
Congratulations anyway on being "nearly" mortgage free.