We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Moving home - do we pay it off now?!
ellersb
Posts: 80 Forumite
Can anyone help with this question? (In rounded easy numbers!) We’ve got a mortgage of approx 140k. We’re in the process of selling our flat for approx £240k, leaving us a profit of 100k (ignoring all the fees etc at the moment). Now, the mortgage we’re on with Abbey is fixed rate for another 4.5 years (ish). We’re planning on moving out of London and buying somewhere for about 140k somewhere else in the country to enable us to minimise our mortgage for better quality of life (hopefully).
Now, would you:
Reduce the mortgage, incurring about a 5k fine, and get a smaller mortgage from either Abbey or someone else (about 60k we think).
OR
Ask Abbey if they can transfer the whole remaining mortgage (140) to the new property (140 so a 100% mortgage) and then partly use the profit to pay these mortgage payments until the fixed term runs out and THEN get a new smaller mortgage.
I can’t figure out which is the best one to do – has anyone got any suggestions?
Thanks!!
Now, would you:
Reduce the mortgage, incurring about a 5k fine, and get a smaller mortgage from either Abbey or someone else (about 60k we think).
OR
Ask Abbey if they can transfer the whole remaining mortgage (140) to the new property (140 so a 100% mortgage) and then partly use the profit to pay these mortgage payments until the fixed term runs out and THEN get a new smaller mortgage.
I can’t figure out which is the best one to do – has anyone got any suggestions?
Thanks!!
DFW challenge Debt-free by Dec 2016
Oct 2015 debt:
MBNA £1300
Lloyds £1800
Virgin £4400
Oct 2015 debt:
MBNA £1300
Lloyds £1800
Virgin £4400
0
Comments
-
Hi Ellersb
Sorry, I don't have an answer but was wondering whether you might have a bit more luck posting your question on the mortgage board?MFW Start Date 1.4.08. Updated 23.1.18. MFW date 1.8.18
Original Mortgage o/s £187,643 / £71,904 (-115,739)
Repay o/s £92,661 / now £55,900 (-36,761)
Int Only o/s £94,982, now £16,004 (-78,978)
Total daily interest £1 [a) £0.77 b)£0.23
Total OP's:2018 target £TBC YTD £1,9950 -
BAsically, avoid paying the fine, port the mortgage over to your new home, use the £100K to invest in a safe higher interest savings vessel until your 4.5 years is up.
That works if your mortgage rate is lower than the interest rate (after tax) you can get on the £100K
If you want to be mortgage free most banks etc. will let you pay off 10% penalty free per year. You can do that too, to get the repayment balance down a bit.
Of course you may have someone throw a spanner in the works and suggest keeping the London flat, renting it out and using the rent to pay the mortgage on the new place.:p
In other words, there are a few different answers to your question, sorry to be so vague!Member of the first Mortgage Free in 3 challenge, no.19
Balance 19th April '07 = minus £27,640
Balance 1st November '09 = mortgage paid off with £1903 left over. Title deeds are now ours.0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 352.3K Banking & Borrowing
- 253.7K Reduce Debt & Boost Income
- 454.4K Spending & Discounts
- 245.4K Work, Benefits & Business
- 601.2K Mortgages, Homes & Bills
- 177.6K Life & Family
- 259.2K Travel & Transport
- 1.5M Hobbies & Leisure
- 16K Discuss & Feedback
- 37.7K Read-Only Boards