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To think it is best to pay off the mortgage early

(71 Posts)
Orangeblossom78 Wed 20-Nov-19 14:07:38

We have an endowment policy on the mortgage and it is due to mature at the end of next year. Just had the annual update and it is currently at a level to pay off the outstanding mortgage amount.

DH rang them to check and they told him if we wanted to clear it now there would be no extra charges to pay. We could be mortgage free next month.

I think this is a good plan however he says it is due to accrue around £15K possibly if we continue with it to the end of the plan.

AIBU? I think due to Brexit and uncertainty well, it may also go down and the projection is just that. If we paid it now we would already save over £6K in payments over the next year anyway, and would not have to pay any tax on any lump sum.

Brimful Wed 20-Nov-19 14:13:58

Personally, I'd pay it off now. You have the facts and figures as they stand, and I don't think you'll ever regret paying it off and being mortgage free. The extra accruement is only a possibility - but then I'm not a risk taker at all!

havingtochangeusernameagain Wed 20-Nov-19 14:15:13

Totally agree with you and the pp. Pay it off and be mortgage-free, and celebrate!

Lillyhatesjaz Wed 20-Nov-19 14:17:48

I would check if there is an end of plan bonus before deciding

Orangeblossom78 Wed 20-Nov-19 14:19:51

There is a predicted lump sum but it is not guaranteed

Baldcrusader Wed 20-Nov-19 14:21:13

Unless there is some certainty about the money you will get at the end of the endowment, cash it in and get rid of the mortgage.

Also, how much would you be paying in interest from now until the end?

runoutofideasnow Wed 20-Nov-19 14:26:04

Pay it off now.

I'm not a gambler.

Apileofballyhoo Wed 20-Nov-19 14:27:36

Do you have to decide now or can you decide after the General Election? If Brexit happens the value might go down suddenly at the end of 2020 when the transition period is over if there is no trade deal done by then.

BuzzShitbagBobbly Wed 20-Nov-19 14:29:32

A bird in the hand is worth two in the bush.

Pay it off now and enjoy the freedom!

Orangeblossom78 Wed 20-Nov-19 14:32:02

I agree with you all.

Penelopeschat Wed 20-Nov-19 14:33:07

100% pay off now. Economic times are uncertain but even in better times no mortgage is always the best route!

Brimful Wed 20-Nov-19 14:37:13

Imagine, mortgage free by Christmas! Amazing. Hopefully you can convince your DH. smile

FreedomfromPE Wed 20-Nov-19 14:37:23

Being mortgage free would be a strong position.

Everanewbie Wed 20-Nov-19 14:37:51

Examine the details of the policy. Discuss with the provider. If you have an IFA discuss with them Some of these policies gave guaranteed maturity values. It is not as cut and dry as PP have suggested.

I'm not saying one way or the other, just make sure you are armed with 100% of the facts first.

Thehop Wed 20-Nov-19 14:38:29

I’m a risk taker so I vote with husband

Samsamsuperman Wed 20-Nov-19 14:40:00

I'm so jealous - would love to be mortgage free! No brainer. X

Suze1621 Wed 20-Nov-19 14:40:16

Our endowment had 2 elements, the bonus that had been accrued year on year that was guaranteed and the projection for the remaining term which could go up or down.

makingmiracles Wed 20-Nov-19 14:43:20

So taking into account the £6k payments over the next year, you’d really only(might) be gaining £9k, not £15k.... given Brexit and uncertainty over the economy etc I’d be inclined to pay it off now, surely that’s extra cash in pockets now, rather than pay out for another year on the basis you may or may not have a £9k bonus. I don’t know, I’m not a financial guru but it’s seems daft to not pay it off if you can.

madeyemoodysmum Wed 20-Nov-19 14:45:58

Pay off and save the extra in a separate account That way your still saving and accruing a lot of cash

NemophilistRebel Wed 20-Nov-19 14:54:19

What an excellent position to be in and lovely early Christmas present to yourselves to fully pay of your house.

I’m also not a gambler.

Hope all goes well

Everanewbie Wed 20-Nov-19 15:05:38

Does anyone on here saying pay it off know the terms of the policy? Do they know whether there is a guaranteed maturity value that might be given up as a result of early encashment? Do they know whether there is a final bonus at the end? What about the life cover element?

Honestly OP, ignore the noise. Get proper advice, or at least gain an understanding of all the facts. A random poll on AIBU is not the basis for an educated decision.

SapatSea Wed 20-Nov-19 15:05:50

Pay it off. You will feel so much freer not having a mortgage.

LakieLady Wed 20-Nov-19 15:07:19

Paying off our mortgage early was the best financial decision we ever made, not least because it made it possible for me to reduce my working hours massively.

LonnyVonnyWilsonFrickett Wed 20-Nov-19 15:09:35

Pay off your mortgage - and I have a fairly gung-ho approach to financial risk! Being mortgage free is the best present you can give yourselves.

Brimful Wed 20-Nov-19 15:12:11

Everanewbie I think the OP is well aware we're not all professional financial advisers grin

She's asked MN for opinions and based on the info given, we've obliged! It's a thread, not 'noise'...

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