To pay off or not to pay off...

Earl_Grey1

Query: if we pay off our mortgage before the fixed rate ends will the remaining balanced incur interest at whatever the interest rate is ?  Or on the bank of England rate at the time ?

Should we carry on chipping away until it ends then go on to new fixed rate or just bite the bullet and have peace of mind of being mortgage free.. 

Situation:
• we have14 months remaining on a 5 yr fixed rate @2.09%
• 9 years left on mortgage (nationwide)
• £42000 remaining balance.
• low ERF (£500)
• no other debt
• currently overpaying by £250 pm
• we have adequate savings to pay off completely (inheritance) but not likely to be able to replace that amount of savings ourselves so our savings pot will be left with about £15k 
• both in our mid 50's , him with health issues only able to work part time. Me self employed full time, • fairly frugal lifestyle by choice 
• annual joint income - £30k

It's a dilemma I'd love opinions on ! 
Thanks in advance

housebuyer143

I would be inclined to not pay it off now and put the money in a savings account getting over 4.5%... then you are making money and can pay it off at the end of the term

simon_or

As above, I'd plonk it in a market leading one year fix (currently 4.6% as per the MSE savings page), then in a top easy access account and then use those funds to fully pay off the mortgage once your fix ends in 14 months time.

MFWannabe

As per above 👍

Bluebell1000

Agreed, when the rate ends pay the mortgage off. Then I'd suggest you start a regular saver for the amount you'd previously been putting in the mortgage, to top your savings back up.