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Remortgage or save?
We’re due to remortgage next month. Currently 1.4%(!) 185k and 20 years remaining. We also have a savings account at 3.6% currently. We could afford to pay off about 35-40k but wanted some advice on whether it would be better to do this and bring the mortgage down (whilst switching to approx 4.5%) or continue as we are, take the higher mortgage payment hit for 2 more years but continue making more money on our higher savings? Will speak to an IFA in a few weeks but just wanted some general advice…
Comments
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As we don’t know your full financial situation its hard to comment, neither can we predict the future.
You have not given your renewal rate either, but
paying off mortgage works well if you can, but you need to consider emergency funds or possibly of redundancy. 20 year is quite some time and not knowing your age, you would need to consider impact on potential retirement.0 -
I’ve asked for this to be moved so that you can get more responses but agree would be helpful to know more.
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One debt remaining. Home improvement loan.[/b] [11 months left.[/b]0 -
Very little information provided..
Are you changing banks or switching to a new fixed deal with the same bank? If latter then its called product transfer.
Again, based on very limited information 4.5% mortgage has a higher interest than 3.6% savings account - which also if held by one person incurs in extra tax, no tax of kept in ISA or split between two of you (assuming you both earn under £50k/year) - so simply saying its better to overpay mortgage and save that difference..
If there's any chance you may need this money in the future you could open a fixed 2 year ISA at 4.7% rate and that way ot will be little better than overpaying + you still have access to the money:
https://www.moneysavingexpert.com/savings/best-cash-isa/
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