Do I pay off my mortgage

(10 Posts)
chocladoodle Sun 09-Feb-14 10:06:06

I am lucky enough to be in a position to pay off my remaining 12 years of my mortgage. It will use up all of my savings but I will then be mortgage free and still earning.

Is this the right thing to do?

AmIatwat Sun 09-Feb-14 10:17:07

I'm no expert but I'd do that if I were you, You can start saving again and if you were to find yourself out of work you would be entitled to benefits.

antshouse Sun 09-Feb-14 14:11:59

Have a look at money saving experts mortgage over payment calculator. You can put your mortgage details in and change the lump sum overpayment amount to work out what each option would save you.
I opted to repay 50% and to continue paying my mortgage at the current monthly amount meaning it will be paid off more quickly, saving interest, but leaving some emergency savings- and the option to pay the lot off if interest rates rise.

LordEmsworth Sun 09-Feb-14 14:28:24

Have you looked at offset mortgages - would mean you still have access to your savings if you needed them, but you wouldn't be paying interest on the mortgage?

www.moneysavingexpert.com/mortgages/offset-mortgage-calculator

chocladoodle Sun 09-Feb-14 15:11:35

Dont know about offset mortgages. I'll go look at the link. thanks.

We still have a good salary coming into the household and we have no major purchases planned for the next few years, like new cars for example. So i figured that if we continued paying the amount we already pay towards our mortgage but to a savings account or whatever then it wouldn't be long before we built up a nice little sum again.

But I'll go look at offset just now

BCFPete Mon 10-Feb-14 15:38:40

Presumably if you're thinking of paying if off you've checked that there are no fees or penalties for that. If you haven't, do!

Assuming that's the case, you could always pay it down to a degree where you still have sufficient savings. For example, you may choose to keep £10k in savings just in case you have an emergency, and reduce the mortgage balance to £10k.

chocladoodle Fri 14-Feb-14 20:28:05

There are no fees or penalties so im fine there. I can only see it as a positive thing to pay it off. However this last week i have decided that the best thing to do would be to buy a larger property. I think I have too many years ahead of us earning to not keep on paying into property. So plan is sell my house, with the equity from that and my savings i can then purchase a substantially more expensive property and still in theory be paying the same amount in mortgage.

chocladoodle Fri 14-Feb-14 20:29:30

And yes in the meantime whilst waiting for house to sell I'll reduce my mortgage to approx £10k. Thanks for help

LauraBridges Mon 17-Feb-14 10:35:09

Yes buy a bigger property. I paid off our mortgage when I was about 33 and knew I had 30 years+ of high earnings ahead so we used every last penny and got a massive mortgage, even used the children's savings to buy this much larger house and it was one of the best things I ever did. Hopefully I will pay that off this year or next too.

BCFPete Mon 17-Feb-14 10:49:23

If you're thinking of upsizing there's one more point you should consider:

Is the mortgage deal you currently have competitive? A lot of mortgage lenders will allow you to transfer the mortgage from the old property to the new one, and if it's a good rate you may want to. In some cases you may borrow back what you've overpaid at the same rate, and in some cases not. It would be safer to speak to your lender before doing anything.

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