Should I fully pay off or keep some in mortgage?

SammyD10

Hi all,

We have £60k outstanding on our mortgage and the current 3 year fixed is ending imminently - early January 2023.  We are in the fortunate position of being able to pay off this £60k and to still have some healthy savings left.  However a friend has suggested that there may be some advantages of not actually fully paying it off:

1, If you keep a mortgage going then you can easily extend and borrow more should an emergency happen.
2, The bank hold the actual deeds to the house and that it is probably safer with them?  (is this really a thing!)

Any thoughts on this?  Is there a minimum one can have a mortgage for?  I am wondering if I should for example look to keep a mortgage of £1k over say 20 years and pay a very small amount each month.  Will this be possible?  Are there products that would work better than others?  Or perhaps just go to the base rate to avoid product fees?

Many thanks

Sam

South_coast

Pay it off. You shouldn't have any issues borrowing money if you've got one less outgoing every month (why secure a loan against your home if you don't need to?), and you're very unlikely to get sent paper deeds anyway. Even if you did, they mean nothing - what the Land Registry have on file is what matters

sharpe106

You don't get the paper deeds anymore, I never anyway just a letter. I would not worry about being able to extend the mortgage as they look at your circumstances at the time, if you have a mortgage or not it would not really make much difference.

If it is worth paying it back or not depends on the rate you are offered and what rate you can get for savings. If you can get a higher rate in a fixed term bond then you pay for the mortgage I would put the money into the bond. Then you can decide again in a few years time if the rates have changed.