50k in bank 53k left on Mortgage.

Marky4040

Hi All

I want to pay off the balance on my Mortgage as above.

Any advice on the quickest way to make up the shortfall please? The 50k is just sat in a current account.

Thanks

jumire939

£3k shortfall is a small gap. Overpay as much as your lender allows each month, and check whether there's an early repayment charge, that could be more than the gap itself. Also move the £50k somewhere it's earning interest while you sort it out.

Newbie_John

How long left on your fixed deal?

When it expires, pay off £50k, dont fix and then pay the remaining amount whenever you can. Dbl check eith bank if it wont incur any additional fees.

FlorayG

The quickest way I can think of is to draw £3,000 cash on your credit card.

I'm not recommending it, just answering your question

born_again

Do you get any interest on that £50K in your current accout?

Exodi

Put the £50k in a savings account for a little over a year. In reality, the mortgage balance would have presumably reduced during this time, so you would need less than £3k in interest at that point.

What is the rate on your mortgage, if it's less than 5% I'd query the urgency to pay it off at all.

Marky4040

https://forums.moneysavingexpert.com/discussion/comment/82161073#Comment_82161073

Balance includes ERC its 53k in total.

Mortgage is 4 year fixed left to run at 4.3%

I've already maxed out overpayment, resets June 2027

Current account is just HSBC Advance.

Marky4040

https://forums.moneysavingexpert.com/discussion/comment/82161072#Comment_82161072

Dunno to be honest just HSBC Advance.

Exodi

https://forums.moneysavingexpert.com/discussion/comment/82161152#Comment_82161152

I must ask why you have to pay it off now then?

If you wait 7 months you can take another massive chunk off it as your overpayment allowance resets - effecitvely meaning you save ERC on this chunk against your plan.

Considering the rate is 4.3%, you can likely beat this holding the cash between ISA's and fixed savings accounts (even considering tax) - meaning you'll be generating at least the same amount of interest as you are paying. A much better plan would be to avoid paying unnecessary ERC all together by putting the money in savings, maxing out your overpayments across the years and settling any remaining balance in 4 years from savings.

Marky4040

Dunno to be honest just HSBC Advance.

It pays 0% interest (they also have a regular saver which is far from spectacular). Is this money a windfall (e.g. inheritance, divorce, etc)? I wouldn't make a quick decision. It goes without saying earning 0% on £50k is not good where there are accounts paying 5%+ (e.g. £2,500+ a year in 'free money').

Marky4040

https://forums.moneysavingexpert.com/discussion/comment/82161177#Comment_82161177

OK, thanks very much, just wanted the noose around my neck gone i suppose.

I'll have a look at locking it away for some free money for 12 months then.

born_again

https://forums.moneysavingexpert.com/discussion/comment/82161183#Comment_82161183

If that is what you want, go for it.

But do you have other funds in case of emergancy?