Should I pay my mortgage in full?


I currently have a mortgage with Santander which is at 128k. I have recently inherited some money from my late parents and would like to pay the mortgage in full, my deal comes to an end in October where I can pay it off fee free. Some people have advised me not too as it would affect my credit rating and would be harder to get a new mortgage if I need to (see below) I’m not sure if this is true?

My plan in the very near future (within 12 months) is to sell my current house and move to a bigger house. After I have managed to sell my parents property I will be inheriting more money. This will go towards the new house. With the new house I may need to take between 50 to 100k mortgage depending on the price I get for both my house and my parents.

My current Experian credit score is 999 (has been for years) I have no other debts or loans and I have only one credit card (£0 balance) which I use regularly and pay off in full.

Thank you in advance for your advice!



  • MFWannabe
    MFWannabe Forumite Posts: 1,786
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    If you are planning to move in 12 months and would need a mortgage then no I wouldn’t pay current mortgage off in October 
  • MarcMCFC1986
    MarcMCFC1986 Forumite Posts: 77
    Part of the Furniture 10 Posts Combo Breaker
    I don't know the reasons behind people saying not to pay it off - but I'm also no expert.

    I can not, however, see any reason why paying off your mortgage would have a detrimental effect on your credit score. It would be a settled debt - which can only be a positive in the eyes of credit files! 
  • MWT
    MWT Forumite Posts: 8,866
    1,000 Posts Third Anniversary Name Dropper
    edited 20 July at 3:53PM
    The credit scores people see, including that Experian 999 are of no interest to the mortgage lenders. They will use their own scoring based on the events in the borrowers credit file, not the synthetic score.
    So if that goes up or down a few points it is meaningless beyond looking at whatever caused the score to change...
    Paying off the mortgage in itself is not going to have an impact on ability to get a new mortgage. Just make the decision based on what could be earned with that capital vs the cost of leaving the mortgage in place...
  • Deniseconfused
    Deniseconfused Forumite Posts: 11
    Name Dropper First Post
    No its nonsense not to pay off the existing mortgage. You will be mortgage free. One less party in the move process ( albeit a small one ) 

    When you sell your parents house and yours, you’ll just apply for a new mortgage on the new house combining all the monies from both sales, plus your new mortgage. 

    You’ll get the best rates as I am assuming the loan to value of the new mortgage will be quite low. 
  • Deniseconfused
    Deniseconfused Forumite Posts: 11
    Name Dropper First Post
    Plus you will be free to search the whole market to get the best rates and bank to lend you moneu 
  • dimbo61
    dimbo61 Forumite Posts: 13,685
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Not sure of what rate you will be offered when your current fix ends but I think it be more than what you can get from putting money into savings accounts ( after Tax )
    So for me I would pay off the mortgage and small exit fee.
    It will take a few months for the Land Registry  to update the deeds and remove your lender from the deeds.
    Put an alert on with the Land Registry for your home and your parents ( it's free to do )
    With a huge deposit and small mortgage you should get the very best deals on the market when you decide to move.
  • FarmGirl78
    FarmGirl78 Forumite Posts: 65
    Second Anniversary 10 Posts
    edited 22 July at 7:59AM
    I received an inheritance which spured me on to also pay savings into my mortgage, and it now stands at £16.55 a month. While I'm not planning to move as you are, I won't be paying it off in full.

    Reasons for this...

    If lenders can see you're using credit and paying it back reliably and consistently that'll go in my favour if I need to take out credit in future. I don't use my credit card much, so there's not actually much 'borrowing' on my report. Having some borrowing rather than none at all gives you a better credit history.

    It's less likely for my house to be 'stolen' by someone committing fraud and selling it from under me without my knowledge. I know registering with the land registry for notifications helps alert you to any activity, but it's often very last minute.

    My mortgage is with Nationwide, and is still the original product I took out in 2003 where I can take back any overpayments without question. I'm single so having the mental safety net of that cash immediately available (well, within a few days) to me is worth more than the benefits of paying it off in full or the interest I'd save.

    My mortgage is also portable so if I ever do want to move in the next 17 years (until it's original end date) I can take those favourable terms with me.
  • housebuyer143
    housebuyer143 Forumite Posts: 2,574
    1,000 Posts First Anniversary Name Dropper
    There really is negligible benefit if any to keeping a mortgage open just because. So pay it off if you want. 
    I bought a new house after not having a mortgage for 4 years and found it no problem getting another. 
  • NativeFoxScavanager
    NativeFoxScavanager Forumite Posts: 2
    First Post
     Thanks for all your advice.

    I still have a few months to decide, but getting others views has been really helpful

    Thanks to everyone that has replied 
  • penners324
    penners324 Forumite Posts: 2,235
    1,000 Posts Fourth Anniversary Name Dropper
    Pay it off when the deal ends. Why pay interest unnecessarily to a mortgage company?
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