Should I pay off my mortgage

Gudrid

Hi All,

Currently, I have a fixed mortgage at 1.39% until May 2026. I also have ISA and cash savings for emergency and other short-term goals (see numbers below). With the interest rates on the rise, I am thinking of paying off my mortgage in full when my current deal ends with my ISA investments. What would you do? Are there any other options you could think of that would perhaps be better from your perspective like partial overpayment of the mortgage, offset mortgage, or just remortgage to preserve my ISA as I guess the gains from high-interest rates potentially might be better than interest saved by paying off mortgage. Then there is an aspect of having no mortgage and the freedom where I could start rebuilding my ISA with additional income. I would appreciate some insights.

Some Numbers:

Debts: mortgage residential at a fixed rate of 1.39% until May 2026 , current balance 100k, term 12 years, monthly payment 768, house value of 550k.

Investments:stocks & Shares ISA  80k,Other stock  20k,

Cash savings: 25k

Pension:150k

Income:50k pa

Archerychick

I think it’s incredibly hard to be making a decision now for May 2026, a lot can happen between now and then. 

Closer to the time I would be looking at the interest rates available for mortgages, vs savings and making a call based on that.

we are on a low rate just above 1% rate, and plan to fully pay off £30k left) when our deal ends in Nov 25. However, if when we get to that point I can earn more in savings that it would cost me to take a new deal that’s what I’ll do. 

Taking money out of a stocks & shares isa doesn’t seem like a good thing to do as those aren’t short term investments.

darkcloudi

If you can get a higher return on savings then you would be better to keep them in savings, although with a stocks and shares there is risk I guess but with greater return.

As previous poster suggested May 2026 is some time away, guess its worth just saving as much as you can from now and the expiry and then make a decision (can always pay off a lump sum at the end of rate).

I got 3 mortgages with different rates (2.09% (10 year fix - ends May 32), 1.69% (5 year fix - ends Jul 2025) and my worst rate which I recently done last year 4.95% (5 year fix - ends Oct 28) 

How I look at it is I got savings that counters the 4.95% mortgage so to me its like a offset mortgage (and get a little extra due to the rate being 5.05%)
With the other 2 i'm making more money in interest compared to those mortgages so not worth paying off.
Mortgages aren't all that bad, cheaper then a loan and its always good to keep savings as a reserve.

As i'm a high rate tax payer I want to keep the money in ISA's and not take out the money I put in.