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Savings=mortgage balance

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Hi all please excuse me if my first post on this forum is not in keeping with the usual standard. 

I have what could be considered a “nice problem”… after years of living with parents and being reasonably financially frugal (for a 20 something), I met and took a small mortgage with my current partner, using almost my entire life savings to place the deposit (which my partner did not have the luxury of) and set us up for manageable monthly payments split down the middle (with the usual caveat I will receive % deposit back before splitting profits on any potential property sale). 6 years down the line, I have now built up savings which will likely equal the remaining balance on the mortgage come the end of our current 5 year fix in dec 2024…

Given my partner is keen to maintain joint ownership of the property what are my best options to pay off the mortgage without burning money unnecessarily on interest? Is this an unusual situation? I understand this doesn’t really come to “a head” til 2024 but I’m not looking to overpay more than my current 25% share from the deposit. 

Any advice welcome. Thanks in advance. 

Comments

  • LadyGnome
    LadyGnome Posts: 801 Forumite
    First Anniversary Name Dropper First Post Combo Breaker
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    Could you put the money in an offset mortgage instead so your mortgage would be interest free and you could equally pay down capital.  That way you both benefit from your savings without you losing your capital.  You would take a bit of an inflation hit on the value of the capital as you would be losing all of your interest income (potentially) but only benefiting from half the interest reduction on the mortgage.

    You would always have the security of knowing that if necessary you could pay off the whole mortgage.
    MortgageStart Nov 2012 £310,000
    Oct 2022 £143,277.74
    Reduction £166,722.26
    OriginalEnd Sept 2034 / Current official end Apr 2032 (but I have a cunning plan...)
    2022 MFW #78 £10200/£12000
    MFiT-6 #28 £21,772 /£75000
  • gallusaye
    Options
    LadyGnome said:
    Could you put the money in an offset mortgage instead so your mortgage would be interest free and you could equally pay down capital.  That way you both benefit from your savings without you losing your capital.  You would take a bit of an inflation hit on the value of the capital as you would be losing all of your interest income (potentially) but only benefiting from half the interest reduction on the mortgage.

    You would always have the security of knowing that if necessary you could pay off the whole mortgage.
    Something I’ve looked at and glad you’ve suggested it as viable… will obviously depend on interest rates in 2024. Food for thought. 
  • savingholmes
    savingholmes Posts: 27,676 Forumite
    Name Dropper First Anniversary Photogenic First Post
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    You could probably earn more in savings than you pay on your mortgage. 

    Another option to consider would be putting some of your spare cash into pension and getting tax relief on it. 
    Achieve FIRE/Mortgage Neutrality by mid 2030
    1) MFW Nov 21 £201,999 with 235 payments to go - now £182,428 Equity 27.02%
    2) Spend on handyman & external building works & new patio door £13.45K
    3) CC £6.7K on 0% spends card but offset by £34.2K savings (part EF, part future home improvement)
    4) Mortgage neutral by June 2030 AVC £10.1K/£127.5K AVC target 8% value at 15/5
    5) FI Age 60 annual income target £13.7/30K 45.7%
    6) SIPP £4.1K
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