Keep cash in bank or pay off the mortgage that is the question

So  MSE's, 
here's my quandary in a nutshell. Through loss of a parent and redundancy I have enough money to pay off my mortgage and leave me with about £20k of savings.  I am on a tracker and repayments are currently £470 a month (it's gone up £60 a month this year) with 7 years 4 months left. I have started work again now and will be earning about £40-50k. So do I -

- Pay it off and try and put away some money each month instead
- Carry on paying the mortgage on current tracker
- Fix it and carry on paying it
- something I haven't thought of yet

I know how lucky I am to have this problem. But I would give it all back for one more day with my Mum ! 
Thanks in advance 


  • How long have you got to go until retirement?   And are you likely to become a higher rate tax payer anytime soon? 

    As you will have your rainy day fund of £20k you might want to consider topping up your pension if you are likely to become a higher rate tax payer, as you'd be able to effectively add 40% on top of your contribution to help compound any increases in its value.   It is a long term strategy and you wouldn't get access to the money again until retirement without huge penalties, but where do you get an instant risk free 40% return, even a risk free 20% of a normal rate taxpayer would be worth having.

    The thought of being mortgage free is a strong draw though, especially having previously been made redundant, there is always that worry about losing your home.  So I don' think anyone would blame you paying it off, especially as interest rates are likely to go up by at least another 1% to help control inflation, or even more if there is a black swan event.   You could then wack the £470 a month into your pension or an Index tracker ISA with very low charges; doing it monthly means you'll also not have to worry about timing your entry into the market.

    Inheritance, is always bittersweet, it is a nice to have, but you'd prefer they were still with you and were spending every last drop being able to enjoy themselves.
  • dark^knight
    dark^knight Posts: 526
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    Agree with above...if becoming mortgage free would give you peace of mind then do it...will save you from just sitting there can sometimes be easily lost if you don't use it wisely.
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