Final check before committing to pay off mortgage

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
    MFWannabe Posts: 2,012 Forumite
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    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 👍 

    31/03/24:  Debt total £12,400/13,192.13
  • I'd pay it off too, as long as there aren't any huge ERCs
  • Sarahspangles
    Sarahspangles Posts: 1,355 Forumite
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    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!
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