Pay off mortgage or not?

Elizabeth_739

I am 57 years old and am thinking of paying off my mortgage. I then intend to put the available income into a high rate savings account and am quite keen to purchase another house in the not too distant future as buy to let.

Even though I have considerable equity, could afford a good deposit and would have income to spare, would it be difficult to get a buy to let mortgage in view of my age? Or would it be beneficial in any way to keep a toe in the mortgage water so to speak? I would appreciate any advice.

nrsql

You could get (or transfer) to a flexible or offset mortgage and pay it all off so that you still had the borrowing if you needed it (for the buy to let for instance - even as just a stop gap while another mortgage is arranged).

Pinkleylandii

I am not an expert but if it was me I would first see how much you are paying interest on your mortgage and compare against what interest return you will get from an account. If it is very low interest return on the account it may not be worth your while doing that. If you have substantial money to be able to put a down payment down on a buy to let and it was for your pension, I would not just go out and see a house you like and let it out, it is not as easy as that. You could find letting it out difficult. I personally go through a management agency and they charge 15% but the look after the property and I just basically forget about it, but there can be periods of un-let and I would have to find the mortgage myself. Luckily in 2 years I have only had to pay about 1 month's mortgage but I have incurred other expenses on the property such as repairs etc. The other side of the coin was I let out a property myself not going through a management agency and it was nothing but hassle. You can get professional companies who source properties in high yield let areas such as beside universities and although rent is not guaranteed you are more likely to let the property out thus paying your mortgage and hopefully capital appreciation of the property therefore securing a better pension. Another point to consider is that the higher the deposit on a buy to let mortgage the lower the interest rate. I think you need to speak to a independant financial advisor, as in the long run you want the best for your retirement. Not sure if your age is against you with a mortgage but if you have a healthy deposit you will probably have more success in securing a buy to let mortgage. If you look at the statistics in 25 years property value has went up on average 7% per year taking into account booms and crashes. Check that out. Elaine