Should I pay off my offset mortgage in order to save more?

theyoungones4

Hi there. We don't have a vast amount of spare cash each month (once we've saved for holidays and unexpected bills) however we do have enough money in our offset to completely pay off our mortgage which would free up around £380 a month. It seems like a no brainer to me to pay it off but our financial advisor told us it was better to keep the mortgage and invest some of the money that's currently offsetting (keeping the rest as a back-up pot in case of emergencies). We don't like risk and would rather be free of debt however we don't want to shoot ourselves in the foot if our money is guaranteed a better income elsewhere. We have pensions but no regular savings right now (due to the offset account). Thoughts welcome.

surreysaver

Depends what percentage rate your mortgage is. 
Also, having a mortgage looks good on your credit file.
I have an offset mortgage, and I was borrowing as much as I could to put in savings accounts that were paying a higher interest rate than I was paying on my mortgage. Interest rates have now increased, so I am now better off fully offsetting, as that is also more tax efficient.
If you wished, you could fully offset but keep the mortgage open if you needed the cash.
A mortgage is the cheapest debt you'll likely to have, so its a no brainer to keep it, rather than pay it off.