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Mortgage - to pay off or not to pay off?
iminow
Posts: 4 Newbie
I am 59 and divorced. I have a pension of £14K from my last employer and will shortly be receiving a pension from the MOD followed in 5 years with the state OAP. I am not concerned with leaving any inheritance when I die. My property is currently worth about £200K.
However, I have a £45K interest only mortgage and currently paying about £225 PCM (£3K pa) interest. I recently sold my endowment policy and have about £40K in cash ISAs, premium bonds and other savings, providing me with a gross additional income of about £2k pa plus the ability to spend the cash should I choose to. I calculate that the net cost of my mortgage is therefore about £700 pa. I also pay my ex-wife and children £200pcm in maintenance.
I am minded to continue paying the interest and keep my cash as I calculate that, even if I could pay off the loan I would only save about £700 pa and at that rate it would take me until I am 116 years old to save the £40K I have at the moment. In addition if I paid off the mortgage it is likely that my maintenance payments would increase. Am I missing something?
However, I have a £45K interest only mortgage and currently paying about £225 PCM (£3K pa) interest. I recently sold my endowment policy and have about £40K in cash ISAs, premium bonds and other savings, providing me with a gross additional income of about £2k pa plus the ability to spend the cash should I choose to. I calculate that the net cost of my mortgage is therefore about £700 pa. I also pay my ex-wife and children £200pcm in maintenance.
I am minded to continue paying the interest and keep my cash as I calculate that, even if I could pay off the loan I would only save about £700 pa and at that rate it would take me until I am 116 years old to save the £40K I have at the moment. In addition if I paid off the mortgage it is likely that my maintenance payments would increase. Am I missing something?
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