Mortgage on a fixed term contract

Huggy_Bear

Evening

I was hoping to pay off my small mortgage this year, but I think for peace of mind I need to keep hold of a cash reserve as I'm currently on a fixed term contract.

I was thinking of remortgaging so I have a £10k mortgage - I have the cash maturing in an ISA already but I'm thinking I should keep the cash in a savings account which I can dip into if my fixed term contract ends. With the mortgage rates low it seems for a small amount of interest I will have to pay then (1.49% fixed for 2 years. 5 year mortgage term) I could keep the 10k in reserve. I worry that if I pay off my mortgage and my contract ends then I don't have anything to fall back on. I know the £10k wont be earning interest over 1.49% in a savings account but it will be there if I need it.

If my circumstances were slightly different then I'd pay the mortgage off - has anyone been in a similar situation?

I should add I'm only working p/t

MovingForwards

Why not keep your savings and keep paying your mortgage each month? Seems a bit odd wanting to pay it off, to borrow again just to put yourself into the position you are now.

Huggy_Bear

MovingForwards said:

Why not keep your savings and keep paying your mortgage each month? Seems a bit odd wanting to pay it off, to borrow again just to put yourself into the position you are now.

Thank you - when I said remortgage I meant moving my existing mortgage to a new 2 year fixed term rate. My current rate has come to add which means I have the flexibility to pay off the balance without a penalty