Should I pay off my Mortgage in Full now - as I am coiming to end of fixed rate.
in Mortgage-free wannabe
7 replies 254 views
Hi my fixed rate mortgage of 2.4% is coming to an end in about a month and a half, at that time it is due to go up to about 4.2%. When my fixed rate comes to an end there will be about £35,000 left on the mortgage. I have recently come into some cash from a will, which is a little more than the £35,000. Would i be best to just pay it all off and be done with the Mortgage or should i go for a new 5 years fixed rate deal - my broker says he would suggest i go for a new 5 year deal to clear it as he can get me a rate of between 1.25-1.5%. Would it be best to clear it and not have to pay the roughly £615 a month i pay the moment, or is it better to take the deal and use the cash elsewhere, i am 42 with two kids and have a reasonable good works pension via my local government employer. For extra info as part of the will i have also inherited a property with a value of about £100,000 but i would expect that it could take me a year or more to sell the property. My two kids are about 10 and 13 so not at uni etc yet. just not sure whats the best option to go for with the Mortgage as i never expected to be in this situation.
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Take the £600+ a month and put it into some sort of savings - you won't notice the difference so that will be easy. That will build up nicely to allow you a good buffer as well as some nice hols when we're out of lockdown and still have enough to help the kids with uni and their own housing purchases.
2023 £1 a day £54.26/365
Good luck on your next venture x
Mortgage ends Aug 2050 MFW: Aug 2027
Current Balance: £63,450
MFW2020 #156 £723.13
MFW2021 #26 £1184.71
MFW2022 #11 £197.87
Backup/ Neutral fund £920/£1000
MFW 2022 #27 £5,300
MFW 2023 #27 £485 / £2,023 target
Many fixed team deals penalise significant overpayments during the fix window. As such, if you did intend to pay off the mortgage in full, you may fare better waiting until after the fixed term expires, then paying the balance in full.
I'm also one on the side of paying off the mortgage. You won't achieve 1.25-1.5% in a typical savings account so would need to tie it up in an investment.