to pay off or save...

samuela66

Afternoon

I am just about to receive the money from my fathers estate, we only owe 50k on our mortgage, I was going to pay it off, but I think with interest rates being so attractive I should put it in a high interest account and just pay the monthly mortgage payments, we are on a great fixed rate for quite some time..... whats your opinions please, thanks

Slinky

If the interest rate you can get on savings (after any tax that may be due) is higher than the interest rate you are paying on the mortgage, it makes no sense to pay off the mortgage.

tizerbelle

Slinky said:

If the interest rate you can get on savings (after any tax that may be due) is higher than the interest rate you are paying on the mortgage, it makes no sense to pay off the mortgage.

Agree that is the logical answer and approach but sometimes with debt of any type the psychological reward of paying it off in full far outweighs the benefits of any interest foregone by doing so - especially if there is a risk of the lump sum being frittered away in dribs and drabs and one day a realisation that there's no savings left and payments still having to be made to that mortgage/loan.

Newbie_John

Luckily best saving rates come with fixed savings accounts. Question is what's your mortgage interest rate and the remaining term?

But most likely save.