Final check before committing to pay off mortgage

Aloysius1972

Our mortgage fix is coming to an end next month and we are obviously exposed now to much higher rates. Savings plus a small inheritance means that we have enough cash available to pay off the outstanding mortgage amount and leave enough savings to cover around 9 months salary. As there re no savings options that pay close to the interest on new mortgage deals, is it a no brainier to pay off the mortgage next month or are there any significant downsides that I may not have considered? We are not planning any major changes and will be remaining in work and in this home for the foreseeable future.

MFWannabe

If it were me I’d be paying off the mortgage as you have no plans to move and still have a good amount in savings as an emergency fund 
Then I would build savings back up 👍 

Cotswoldfoodie

I'd pay it off too, as long as there aren't any huge ERCs

Sarahspangles

Occasionally I have seen people recommend making an overpayment, but leaving a small balance.  In theory, in return for paying a small amount of interest, you have reserved a 'pre-approved loan' at the mortgage rate that will be in force at the time you want to dip into the overpayment.  

But this doesn't seem attractive to me - it implies you would want to secure any future borrowing on your home, rather than taking an unsecured loan, and in any case a mortgage-free homeowner is likely to be accepted for a loan at a reasonable rate.  So I think there are only a few niche scenarios where this would be useful.

With enough rainy day money to cover 9m and stable employment your plan sounds right - but if you're like me you'll still feel a pang when you see those saving balances fall!