Mortgage or Savings?! 25 February 2008 at 2:16PM in Mortgage-free wannabe 2 replies 698 views

wifeforlife

I have a mortgage of £78,500 which I am paying interest only at £301 per month.

This mortgage deal ends in April but I do have the savings to pay it in full. The savings at present earn interest of £300 per month.

Am I better to pay the mortgage in full or look for a better deal and earn interest on the balance, and are there any repercussions in years to come with this

Catherine

Trying_to_be_good

Do you have any other savings? General advice is to keep 3-6 months worth of outgoings in easy access savings, so make sure you keep this 'security blanket'.

If your savings are in tax-free accounts, or are otherwise earning a higher interest rate than you'll be paying on the mortgage, they're probably better left where they are.

Otherwise, if it were me, I'd be paying down the mortgage as far as I can! Well done for having such a good amount of savings!

phizzimum

what an interesting dilemma! you must have a cracking rate on your mortgage - will you be able to get another deal to match it?

what will be the fees for a new mortgage, and how would these compare with any redemption fees for paying off the mortgage?