Interest free Mortgage Advice

Foxy0_0

Hi All, 

I have an interest free mortgage. the term is due to end 08/01/2027. My interest rate is 1.1% above the base rate, so it is currently 1.2%.
The house value is approximately £235,000 and I have £137,000 outstanding. I have a personal pension pot currently valued at £105,000. I have ongoing costs to an advisor for this pension.
I am aware of the 25% rule and the 20% tax rate. I am currently in receipt of a civil service pension of approximately £550.00 per month. I have
used this pension to build up the personal pension pot. I then decided to stop paying into the pension pot  and I am  using the pension to overpay the mortgage. There are no additional fees for overpayment.  I will be 59 this September and I have become a teacher since leaving the civil service. My wife works part time for the NHS 2 days per week in administration.
The  reason I took out an interest only mortgage was to raise capital to modernise our current house and buy 2 terraced properties also on interest free mortgages. These were let to students and are currently let but one in particular needs money spending on it. We put £13,500 down on each of these student lets approximately 20 years ago. Unfortunately, property prices have not gone up an awful lot  due to their locations. I would probably be lucky to get my £27,000. back , although there is a smallish income generated from each. 
I would appreciate advice on my current mortgage and perhaps selling one of the rentals or both,  from an independent person's perspective, We are both healthy and I have no plans to retire in the next 5 or 6 years.

Foxy0_0

Apologies I meant interest Only mortgage advice.

Brie

Can't help with any advice but can you make it clear if you are referring to INTEREST ONLY or to INTEREST FREE?

It's confusing my very tiny brain.

dunstonh

I am aware of the 25% rule and the 20% tax rate. 

Which effectively makes it 15% tax rate when taking under phased drawdown.

I then decided to stop paying into the pension pot  and I am  using the pension to overpay the mortgage. 

If you can afford the mortgage (on a repayment or overpayment basis) and the pension contributions then the pension beats mortgage.   If you cant then you need to focus on the mortgage.

I would appreciate advice on my current mortgage and perhaps selling one of the rentals or both,  from an independent person's perspective, We are both healthy and I have no plans to retire in the next 5 or 6 years.

Is your adviser not independent?  if not, then sack them and get an independent instead.

Foxy0_0

Much appreciated 

dimbo61

I have read your post and can't understand how you could buy 2 terraced houses over 20 years ago and they have not gone up in value even in a student area !
What have you done with the rent from 4/6/8 students over the last 20 years ?
You have a fantastic I O mortgage deal which runs for another 5+ years and allows unlimited overpayments.
Do you have outstanding mortgages on the rental properties ?
Do you use an accountant ?
If you can pay more into your pension you get Tax relief which I would think works out better than paying down the mortgage.
Are you higher rate tax payers ?
Do you own the BTL as joint tenants or tenants in common with your wife owning 80/90%
Time to review your business plan.
You may well be able to take out a BTL mortgage on the rental to pay down the residential mortgage and get the Tax credit ( 20% mortgage relief )