Clear the Mortgage?

jim8888

Is it time to take some of my tax free lump sum to clear the mortgage? I have about £60k left of my variable rate mortgage to clear. I always resisted doing that because I thought I could earn maybe 8% on that money which was only costing me 2% to borrow. But now, retired, and projecting a 4% Safe Withdrawal Rate instead of a longer term speculative return of 8%, and with interest rates maybe heading toward 6%, maybe I should pay it off? Anyone else contemplating doing similar?

dunstonh

Is it time to take some of my tax free lump sum to clear the mortgage?

Is that part of your retirement plan?  Or just something you have thought about on a whim?  

If your plan wasn't originally to repay the mortgage out of the TFC, then what was the plan?

 I have about £60k left of my variable rate mortgage to clear. I always resisted doing that because I thought I could earn maybe 8% on that money which was only costing me 2% to borrow.

If it's still costing you 2% to borrow then its probably not a good time to repay that cheap debt.   However, if that cost goes up, there may well come a point.

jim8888

You make a good point dunstonh, I spent a lot of time working on my retirement plan and it didn't include clearing the mortgage, so maybe I should just hold steady. The one thing I did have in the background was downsizing to clear the mortgage, which is still something we have an eye on, although downsizing isn't as easy as it sounds for a variety of reasons! For the moment, I think I'm just going to do nothing and keep to my strategy. I have enough in cash to cover two years before I need to sell any more equities to realise more of the TFLS, so steady as she goes.