Mortgage Options - April 24

rscosworth

Good Afteenoon,

I am hoping for some assistance in a dilemma I have with my current mortgage which ends in April 24, details are as follows, 285k property value, 85k mortgage remaining, 11years remaining, 1.49% currently paying £562 a month. I currently have 46.5k in premium bonds, no other savings.

I have a real dilemma about what to do with my mortgage renewal, my ultimate goal is to be mortgage free but have a real issue with depleting my savings fully (rainy day fund etc).

I’m toying with a few ideas but really don’t know which is the best one. I’m loath to pay a financial advisor as I think my position is fairly easy, I don’t have debts, I don’t have children, I have a good and steady job etc etc

Options that I can see but welcome to others, kinda looking for the Pro’s and Con’s of these to make a better informed decision.

Deplete savings and take shorter mortgage.

Pay 10-20k from savings and take shorter mortgage.

Renew mortgage as-is with whatever 2yr fixed I can get, keep savings, and know it’ll be paid off in 11yrs (or reconsider again in 2yrs)

Extend mortgage to the maximum possible term, take 2yr fixed and reduce payments, max out premium bonds, and then take stock in 2yrs

Looking for constructive thoughts/criticism please

Thanks

MFWannabe

rscosworth said:

Good Afteenoon,

I am hoping for some assistance in a dilemma I have with my current mortgage which ends in April 24, details are as follows, 285k property value, 85k mortgage remaining, 11years remaining, 1.49% currently paying £562 a month. I currently have 46.5k in premium bonds, no other savings.

I have a real dilemma about what to do with my mortgage renewal, my ultimate goal is to be mortgage free but have a real issue with depleting my savings fully (rainy day fund etc).

I’m toying with a few ideas but really don’t know which is the best one. I’m loath to pay a financial advisor as I think my position is fairly easy, I don’t have debts, I don’t have children, I have a good and steady job etc etc

Options that I can see but welcome to others, kinda looking for the Pro’s and Con’s of these to make a better informed decision.

Deplete savings and take shorter mortgage.

Pay 10-20k from savings and take shorter mortgage.

Renew mortgage as-is with whatever 2yr fixed I can get, keep savings, and know it’ll be paid off in 11yrs (or reconsider again in 2yrs)

Extend mortgage to the maximum possible term, take 2yr fixed and reduce payments, max out premium bonds, and then take stock in 2yrs

Looking for constructive thoughts/criticism please

Thanks

Option 3 but make overpayments to pay it off sooner and reduce the amount you pay in interest 
also look at are you getting the best rate of interest on savings? Are premium bonds best place for them?

amnblog

'I’m loath to pay a financial advisor as I think my position is fairly easy'

Might be a better idea than picking up ideas on the Forum from people you do not know and who do not know your situation.

rscosworth

amnblog said:

'I’m loath to pay a financial advisor as I think my position is fairly easy'

Might be a better idea than picking up ideas on the Forum from people you do not know and who do not know your situation.

Situation is as simple as I’ve posted, good earnings, no debt (other than mortgage) so not entirely sure what an FA would add. But thanks for the comment, I’ll take that on board along with any other snippets.

Yorkie1

In the absence of any details about your age, financial ambitions, pension details etc., it's difficult to provide any concrete comment that is meaningful - all people can do is respond with generalisations that may not be appropriate to your circumstances.

But, generally, I wouldn't seek to extend the duration of the mortgage without good reason - not least because I think it's likely to involve full reassessment by the lender. 

Have a look at the product swap details from your lender to get an idea as to whether you'll want to look elsewhere in due course. At 30% LTV it might be easier to stay put, and perhaps look at products without fees.

It's always a good idea to keep sufficient rainy day savings - particularly if you do not have a partner/spouse (you don't say either way), as there's nobody else to take up any slack.
 
But I would agree with the other poster about whether PB are the best place for your cash savings. 

Also consider what pension provisions you have made, and whether that needs to be improved / whether you are higher rate tax payer and want to make inroads into reducing any tax liability etc.