Is it this simple?

OldPedaller

Just want to be sure I'm not overthinking this.   Like most of us, I always wanted to pay off the mortgage as soon as I could. 
 I have inherited enough to pay off my  mortgage, currently £86K on a fixed term deal that ends 2026.  The mortgage itself has about 10 years to run.
The Fixed Term Mortgage interest rate is 1.5%
There are plenty of one year fixed savings of around 5% now available.
  So I think if I keep paying the 1.5% until 2026 and get 5% on the £80K, I'm going to be around £3000 a year better off (3.5% of 86K)?
Plus maybe a slightly smaller early redemption fee because the amount owed by 2026 is a bit less?
Have I got this right?

Flugelhorn

just remember the tax on the savings - but even with that it looks like you will be better off saving and then paying when the fixed rate ends

Emmia

And by waiting you also avoid any early repayment charges.

OldPedaller

Emmia said:

And by waiting you also avoid any early repayment charges.

Thanks, but I think I'd have early repayment charge if paid off any time before the 10 year official end?  But just a lesser charge because I believe the charge is based on outstanding amount/number of years reduced?

Emmia

OldPedaller said:

Emmia said:

And by waiting you also avoid any early repayment charges.

Thanks, but I think I'd have early repayment charge if paid off any time before the 10 year official end?  But just a lesser charge because I believe the charge is based on outstanding amount/number of years reduced?

Indeed - but it's another reason not to pay it off early. 


You're currently mortgage neutral, as you have enough to pay it off.