Keeping a small mortgage going?

UKSBD

I had a £45k mortgage fixed at 2.3% which ended on 31/01/2024 and changed to an 8.7% variable  so decided to pay it off, all but £500

I seem to remember common advice being to keep a small mortgage as it means mortgage company keep all paperwork.

In this time of everything being digitalised and all documents at Land Registry is it still good advice to maintain a small mortgage or better to pay it all off completely?

If you do pay it all off is there anything you need to do - Like inform Land Registry or anything else?

user1977

What "paperwork" do you think exists, and how much of that does your lender have? If your title is registered there's unlikely to be anything all that important, and even if there is, it's not necessarily any safer at the lender than wherever you stick your important papers (the Bradford & Bingley had a whole warehouse of title deeds go up in flames...).

400ixl

Keeping the small mortgage to have them store a copy of the deeds is 90's advice.

Most deeds have been digitised by the land registry now. So its probably more useful to have your own copy at home and the digital copy with the land registry.

When you pay off the mortgage the mortgage company will inform the land registry they no longer have an interest in the property and should send you back any copies they have on the property.

UKSBD

400ixl said:

Keeping the small mortgage to have them store a copy of the deeds is 90's advice.

Most deeds have been digitised by the land registry now. So its probably more useful to have your own copy at home and the digital copy with the land registry.

When you pay off the mortgage the mortgage company will inform the land registry they no longer have an interest in the property and should send you back any copies they have on the property.

Thanks, 90's is when I bought it 

I know Land Registry have everything and have my own copies too, just wondering if Mortgage company had anything else.

Sounds like I may as well pay off the last £500 too.

Hoenir

Evertthing is online now. No longer a need to keep a mortgage going. 

mexican_dave

Not sure if it's true but a reason to keep a small mortgage on, is it enhances your credit rating. So potentially assisting with other loans. Any one else experience of this?

user1977

mexican_dave said:

Not sure if it's true but a reason to keep a small mortgage on, is it enhances your credit rating. So potentially assisting with other loans. Any one else experience of this?

No, that one’s nonsense as well.