Paying off Mortgage

henrygregory

Looking for some advice....

I have been working really hard.
I purchased a shared ownership property in 2018. I purchased 75% (£232,500) with the HA owning the remaining 25% (£77500). The mortgage term was originally 32 years, but I have done my best to overpay from 2018 until today. The term is now 20 years and I owe just over 85k. 

My current mortgage deal ends in April next year. I have been saving furiously, and I am now in a position where my savings just cover the remainder of my entire outstanding mortgage. A friend told me that once I am out of my fixed term, I should be able to pay off the mortgage in its entirety without any overpayment fees. Is this correct?

Moving forwards, I am unsure what I should do as the HA still own the remaining 25%, however as I have posted before, the HA have housed some terrible tenants in our street, who have caused a number of issues in the past. My mortgage advisor has always advised me to buy the remaining share so i outright buy the house (which I am able to do), but I have always said no I feel I have more leverage with the HA if they too own a share in the property. I am also of an opinion that my home would possibily be more likely to sell as a shared ownership than an outright owned one as so many people are struggling to buy homes these days. I might be wrong but I feel there are more people out there able to buy a share of a house than an entire house. I checked before purchasing and once I own the home, I am able to sell on the open market and the HA does not have the right to buy it back from me.

I would be really grateful of any words of advice. I am in my mid 30s and will need to upsize in the future when children come along. The only reason I am considering paying off the entire mortgage is because what I am saving in interest is lower than the mortgage rates so it makes more sense to just pay the mortgage off. I can't keep working this hard, so just trying to make a good bit of a dent in my mortgage debt. There are no significant maintenance issues for the house as it is six years old. I had considered a loft conversion to add an extra room and bathroom, but not sure how it would work if an HA owns 25% still.

Any advice would be gratefully received. 

Mark_d

Out of your fixed term you are free to repay the mortgage in full with no early repayment fees.

When I was in shared-ownership, the rent on the HA's portion was much cheaper than the mortgage interest rate, so I didn't consider buying.

In terms of selling the property, even if the HA own a share now, the property might be sold as a regular property and not as shared ownership.  You should check your documentation.

Cash savings and paying off the mortgage aren't the only two options for your wealth.  Over the long term a S&S ISA can get you a much better return.

I presume it's straightforward for you to do a loft conversion.  This will increase the value of the property.  The HA will then own 25% of the larger amount.

South_coast

Very well done on your efforts so far, you sound like you've got yourself into a great position 👍

Why not speak to some estate agents to get their thoughts on whether it would be more saleable with 75% or 100% ownership?

henrygregory

Thank you both for your thoughts and comments and my apologies for my late reply. I did see your comments at the time and thought I had posted a reply, but I must have forgotten!