Paying off mortgage

FrugalsaverpapaG
FrugalsaverpapaG Forumite Posts: 3
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in Mortgage-free wannabe
Hi all, could anyone please advise. We got our mortgage in 2014 over a 18 year term. The house was £103,000 but we put down a £30k deposit meaning we borrowed £73k, with the interest added it took our repayment total upto £114k. We currently owe £42k (so paid off £72k) but are in a position to be able to pay this off in full. We’ve remortgaged twice with the fixed term due to end March 2024. Would it be better to wait till the end of the fixed term to pay it off in full, and if so would I have to pay any early repayment charges. or would it be better to start paying massive overpayments so that it’s paid by the end of the fixed term? And also would the amount we owe be reduced (£42k) as that amount is mostly all interest, and we will be effectively paying the mortgage off in half the time we originally got it over? Any info is much appreciated. 

Comments

  • BikingBud
    BikingBud Forumite Posts: 1,561
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
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    What does your mortgage agreement say about any early resettlement charges?

    Have you asked for a settlement figure?

    What is your current interest rate?

    There are very good savings rates, have you investigated the best you could get?
    Mortgage: £200,000 (Sep 2021)                                      Initial MF date: Sep 2031 

    Int Rate:     1.19% fixed until Nov 2026 (8.5% follow on rate?)
    Cap+Int Repaid: £65100 (32%)  £80,704 (40%) £82468 (40.48%)£89507 (43%) £91267 (44.7%) £98,309 (48.02%)

    Target MF date: Nov 2026  Current MF date: Dec 2029,  Nov 2029, Apr 2029, May 2029                                    
    Target Int Saving: £25,561 Current Int Saved: £12,350,   £13,421,  £16,991, £17,989, £18,699, £20,495

    Overpayments suspended and surplus cash currently being diverted to high interest savings.
  • South_coast
    South_coast Forumite Posts: 4,503
    1,000 Posts Third Anniversary Name Dropper Photogenic
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    I'm not sure I understand your comments about the interest on the mortgage, but regardless when you're so close to the end of the fixed term there's not much to be gained by paying it off in full now. You can park £20k each in a cash ISA for a few months so you don't need to worry about exceeding the personal savings allowance and then pay it off at the end of the term
    Mortgage start: £65,495 (March 2016)
    Cleared 🧚‍♀️🧚‍♀️🧚‍♀️!!! In 5 years, 1 month and 29 days
    Total amount repaid: £72,307.03. £1.10 repaid for every £1.00 borrowed

    Finally earning interest instead of paying it!!!
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