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    • Papagolf
    • By Papagolf 15th Sep 17, 8:35 AM
    • 1Posts
    • 0Thanks
    Pay lump sum off mortgage or wait?
    • #1
    • 15th Sep 17, 8:35 AM
    Pay lump sum off mortgage or wait? 15th Sep 17 at 8:35 AM

    I have had a 110,000 interest only tracker mortgage at 1.5% with Barclays (woolwich) which is 1 year away from ending (the house is worth about 250,000). I am 50 and I have just had a 50,000 payout from my endowment. I will receive about 90,000 gratuity from a pension in 10 years time. I also have options of taking small lump sums of about 40,000 from pensions over the next 10 years. I would like to carry out some house improvement that will probably cost about 30,000. My plan was to to pay 50,000 towards the mortgage (there are no overpayments or early settlement charges) bringing it down to 60,000 and then apply to remortgage with any lender who will entertain me for 90,000. I had always assumed that this would be a repayment mortgage. I spoke to Barclays and they have said that, subject to credit checks and affordability checks I can extend my mortgage for up to 13 years. I consider the deal I am on to be a good one (variable tracker at 1.5%). I have a good credit rating but was planning on applying to remortgage next year as some monthly commitments (PCP etc) will be repaid and I thought that would make me more attractive to any lenders. Any advice on what to do next? I am tempted to apply now to Barclays for an extension but am worried I will be turned down because of monthly commitments, if I get accepted is it wise to continue with the mortgage and use any left over funds from the home improvement to pay off a chunk of the mortgage? Should I wait a year and invest the 50,000? Should I see a mortgage broker now and pay a 300 fee? Your advice is appreciated.
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    • getmore4less
    • By getmore4less 15th Sep 17, 9:44 AM
    • 32,192 Posts
    • 19,347 Thanks
    • #2
    • 15th Sep 17, 9:44 AM
    • #2
    • 15th Sep 17, 9:44 AM
    Good rate if Barclays will entertain the extension on an interest only basis then that gives more options and a low payment(140pm).

    If they will but need some paying off you have that option up to your 50k

    What does your affordability look like on repayment 11y 1.5% you have a few options obvious 3 are
    110k is 900pm
    90k is 750pm (keeping back 30k for refurb)
    60k is 500pm

    Personally I would be securing the future now and not waiting till next year giving time pressure and the risk of a change in circumstances.

    The preferred option would depend on the tax status, current and forecast retirement income.
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