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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

To not pay off my mortgage?

34 replies

TwoTimesShoeShop · 01/05/2024 16:22

In a few months time, I'll be in a position where I have enough savings to pay off my mortgage.

However, the interest rate on my mortgage isn't too bad (3.5%) and I could earn a little more in interest by leaving the money in ISAs. There's no early repayment charge.

But is there a big psychological gain in having no mortgage, versus just having a mortgage and the equivalent in savings?

Head tells me to leave the mortgage alone. AIBU and will I feel better to pay it off?

I know I'm lucky to have this dilemma and appreciate not everyone is in the same circumstance etc.

OP posts:
BuddhaAtSea · 01/05/2024 16:33

I’d do a bit of both. Split your savings in half, keep half, pay a chunk of the mortgage with the other half. This way, the mortgage becomes a negligible amount, you still have savings.

VestibuleVirgin · 01/05/2024 16:32

Could you put a chunk of money to reduce mortgage but keep bulk in savings?

Original poster
TwoTimesShoeShop · 01/05/2024 16:31

mrsbyers · 01/05/2024 16:24

I’ve and the same quandary but my mortgage is fixed at 1.89 til it finishes in two years and getting over 5% in savings so better financially that way was much as I’d love to be mortgage free !

Oh that's a good rate! Definitely makes sense to leave it. It would be nice to be free though.

OP posts:
Original poster
TwoTimesShoeShop · 01/05/2024 16:30

CelesteCunningham · 01/05/2024 16:28

Is that all of your savings? I wouldn't pay it off given the interest rate is higher if so. You don't want to be stressing that the boiler breaks/car needs to be replaced etc. Having liquid savings earning more than the mortgage rate is a good position to be in, and if that changes you can pay it off then.

Yes, that would wipe me out and then I'd be building savings up again.

So maybe I shouldn't even consider it until I have enough to pay it off plus a buffer of savings.

OP posts:
CelesteCunningham · 01/05/2024 16:28

Is that all of your savings? I wouldn't pay it off given the interest rate is higher if so. You don't want to be stressing that the boiler breaks/car needs to be replaced etc. Having liquid savings earning more than the mortgage rate is a good position to be in, and if that changes you can pay it off then.

HomelessAngua · 01/05/2024 16:26

Keep the mortgage, make more in interest..

Toooldtoworry · 01/05/2024 16:26

Sometimes you have to do things that don't seem natural to make your money work for you.

Toooldtoworry · 01/05/2024 16:25

I'd put it in savings and let it accrue interest. I assume you're on a fixed rate, if so I'd let that end and then repay the mortgage in full if its not cheaper to borrow again.

Although, and this is something for you to discuss with a financial adviser, it might be best to put some of that money in your pension.

mrsbyers · 01/05/2024 16:24

I’ve and the same quandary but my mortgage is fixed at 1.89 til it finishes in two years and getting over 5% in savings so better financially that way was much as I’d love to be mortgage free !