Pay off morg, or keep saving?

Time2Go_25

Quite simple really, if your savings rate is greater than your new mortgage rate, then save, otherwise pay off the mortgage. 

MrMrMr

Time2Go_25 said:

Quite simple really, if your savings rate is greater than your new mortgage rate, then save, otherwise pay off the mortgage. 

Not that much in it looking at rates really, with fees etc 

katsu

MrMrMr said:

Altior said:

It's pretty marginal either way and down to your personal preference I'd say. 

All other things being equal, it comes down to if you can achieve a higher rate for savings than the mortgage interest rate. Generally they are pretty close to parity after the latest BoE reduction. 

My personal preference is to have access to my assets, so I would swing that way and retain access to liquid cash, many others seek out the 'mortgage free' tag asap. As it seems you are quite close to accessing pension I would look to churning the cash into pension whilst you're still working. Even better, effectively doing that via SalSac (if that's an option).

Good idea on pension! We are allowed to put in AVC, and I'm lead to believe that's it's tax free, so a good way I suppose.

I could put half in pension, half into savings suppose if paid it off.

I agree it's nice to have the money in an account, I know the mortgage will be paid off soon anyway so it's not really a worry. I'm not sure how to work out how much interest I'd actually pay to get an idea though. I'm also not sure at the end of this fix that I can opt to just pay off all of mortgage as erll

Look under mortgages on the main  MSE site and you'll find the calculators to help you work out what interest you save. 

enthusiasticsaver

Your numbers don't add up if you have £25k to pay off and pay £600 monthly this will not pay off a £25k mortgage in 3 years.  That  is irrelevant really though. 

The thing to consider is your mortgage rate and your savings rate.  If your savings rate is higher than the mortgage rate then you would do better to continue saving (or better still put into your pension/investments). If the mortgage rate is higher than the savings rate pay it off.  Rates went  down today I think on many savings accounts but this will not affect your fixed mortgage deal. 

MrMrMr

enthusiasticsaver said:

Your numbers don't add up if you have £25k to pay off and pay £600 monthly this will not pay off a £25k mortgage in 3 years.  That  is irrelevant really though. 

The thing to consider is your mortgage rate and your savings rate.  If your savings rate is higher than the mortgage rate then you would do better to continue saving (or better still put into your pension/investments). If the mortgage rate is higher than the savings rate pay it off.  Rates went  down today I think on many savings accounts but this will not affect your fixed mortgage deal. 

Not exact figures, it'll be 3yr when fixed is up, and it's a little more than £600, I just rounded. My fixed is low, and current fixed are around savings, roughly.

At end of fix, could I say pay half of what's left and remortgage?

enthusiasticsaver

MrMrMr said:

enthusiasticsaver said:

Your numbers don't add up if you have £25k to pay off and pay £600 monthly this will not pay off a £25k mortgage in 3 years.  That  is irrelevant really though. 

The thing to consider is your mortgage rate and your savings rate.  If your savings rate is higher than the mortgage rate then you would do better to continue saving (or better still put into your pension/investments). If the mortgage rate is higher than the savings rate pay it off.  Rates went  down today I think on many savings accounts but this will not affect your fixed mortgage deal. 

Not exact figures, it'll be 3yr when fixed is up, and it's a little more than £600, I just rounded. My fixed is low, and current fixed are around savings, roughly.

At end of fix, could I say pay half of what's left and remortgage?

If the rates are the same then I would keep it in savings and then if you wish you can make a lump sum repayment when the fixed rate is up and presumably no ERC.