What would you do with this Mortgage situation.

Hi Guys,   I haven't spoke with a financial advisor yet but looking for a quick steer on what you might do in this mortgage situation.

Fixed rate mortgage term coming to an end.   We took 145k, 25yr mortgage.   We now have 77k over 11yrs left.    Property maybe now worth 165k

We have a lump sum of 60k which we could put into the mortgage and I was thinking maybe could sell up everything we can to just try and collate/scrape enough to clear mortgage.   That would absolutely wipe us out and would mean have nothing to fall back on,  we have 2 kids and hopefully my job is secure but you don't know what's around corner.
(I don't know yet whether we even could repay early or not,  i'm checking the details)

the lump sum was really for retirement as other half not working with no pension pot but I think having no mortgage would hopefully see us save that up again.

Is that sensible or do you think go for another fixed rate deal for the moment,  save as much we can and then look at the possibility again of clearing mortgage after that?

Thanks for any thoughts.   :-)


  • It sounds like you need to prioritise pensions before your mortgage. I'd review your finances as a whole before making any decisions.
  • Pension before mortgage!!! With interest rates so low get that in a pension.  

    If you can afford it I personally would just do one off over payments per month on the mortgage as and when. I average about 50 quid a month overpayment. 

    Enjoy living.  You don't know what's round the corner.  If you get a better rate on your mortgage and keep/ slightly increase the payments it will be gone in no time.  How much do you pay a month now?
    Part time worker.
     Plug that SAHM pension gap & Retire in style in 20 years. 
  • Also speak to a IFA to get pension advice.  Even if you invest a tiny amount into a private pension for your wife per month it will massively add up. She is entitled to tax benefits.  I would ask on the pensions board about it
    Part time worker.
     Plug that SAHM pension gap & Retire in style in 20 years. 
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    Use some of the lump sum to reduce the mortgage. Keep some back as emergency savings. With the monthly mortgage outgoing reduced. Contribute to more to your pension. 
  • jimjames
    jimjames Posts: 17,607 Forumite
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    If your lump sum is just being kept as cash then I'd really look to put it into a pension and get it invested. Holding cash for decades is not a great idea. Using all your money to clear a mortgage isn't wise in my view as you will then have nothing for emergencies. While it's nice to pay down the mortgage it's not worth impacting long term plans to do so.
    Remember the saying: if it looks too good to be true it almost certainly is.
  • Offset mortgage with £30k savings. Put the other £30k in ETF type investments - ISA/LISA. Ave stock exchange return around 6%, take away 3% inflation = 3% return. By reducing the interest on the mortgage by offset you should have funds to save more or reduce the term creating a future and current benefit. I would invest more each month at this stage to increase compound interest returns. You don't give an age so hard to tell how far off pension is. SIPP is another option.   
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