Should I pay off my mortgage?

Nicky_A

I am 57 years old and divorced. I recently consolidated to pay off my debts and now have a £83,000 mortgage to pay off over 10 years - past my retirement age. I am struggling to pay the monthly payments. I recently inherited £125,000 from my father's estate. Question: as I see it I have 3 options:

1 Pay off the mortgage and put the rest in to a high interest account.
2 Pay off half the mortgage and have a small lump sum which can accrue interest on a monthly basis which can be put to my monthly mortgage payments
3 Not pay any off, put all my money in to a high interest monthly account and let the interest pay the monthly mortgage payments - then I will have the capital to use when I retire.

Help - what do you think

Rabiddog_2

Are you in work, on benefit, good pension? bad pension? Lump sum available @ 65?? etc etc. It MAY be a good idea to put some(or all) of this money into a pension fund.. the fact that you can take 25% tax free as a lump sum @ 65 is a good benefit. I personally would pay off about half the mortgage and then use the pension lump sum to pay off the other half.. 83000 over ten years is 8300 per year in capital which works out @ 692 per month. So on your total money you need an interest rate of 6.7% to pay off the capital (no interest). maybe 2/3rd s pays the mortgage--- 1/3rd saved??

Jonbvn

There is an MSE article on this subject:

http://www.moneysavingexpert.com/mortgages/mortgages-vs-savings

Generally speaking, it is better to pay-off the mortgage than save. However, some money should be paid into an ISA each year.