Paying off mortgage

[decaman]

I'm hoping to pay off my mortgage shortly. Is there any advantage to keeping a nominal sum on the account or should I just pay it all off?

I don't believe there is any advantage, why would there be? Pay it off. And well done! (Envious)

Ps I would check if there is an annual allowance of how much you can pay off without penalty as you might want to stagger your payments so you don't incur any further charges.

Some mortgages have early repayment fees. If yours doesn't then you might as well pay it all off

There used to be a benefit in that they would hold your deeds for you if you kept, say, £1.00 in there. I think it's all digital now though so no need for this.

Some (few) people are on very low rates which can mean you could get a higher rate of interest by putting the cash into a savings account. Worth checking before you repay

From my time working in Mortgages some people leave a small sum in order for the mortgage company to continue to hold their title deeds free of charge, although title deeds are no longer worth much as all title information is not held on the Land Registry website (unless you live in Scotland or Ireland)
I've so heard it said that some people do if because if you were to want to take out any more borrowing it's quicker/easier as an existing customer (I'm not sure if this one is actually true though)
Overall I don't think there is a strong reason to keep it open.
If you repay your mortgage before your current interest rate expires you may incur an early repayment charge which will be a percentage of the balance you are repaying. If you repay prior to the scheduled term end date of your mortgage there may also be an exit fee. Just check those things out.

It helps keep your credit rating high if you have a small amount with regular payments. My DH cleared all his debts and had nothing for ages. His credit rating actually went down because he was not seen to be using credit. Which was odd. Now we've started using it again his got a top score. Strange but true.

That said it's whatever make you feel happy. I'm sure there is a massive satisfaction in knowing you completely own a large asset for life.

It depends on your future financial goals.

We are paying or mortgage off soon (yippee) - well, March 17. There are no exit fees or early repayment fees but I don't know about the credit rating one. I don't plan on borrowing money ever again though!

I have been waiting for an endowment to mature so I could add this on to savings and pay off the balance. I can't wait!

Thanks for the thoughts everyone. I will be taking out another mortgage in a year or so, so I think I'll talk to a mortgage broker about how paying off in full now will affect credit scores in the future.

Just to add that some lenders (eg, Nationwide) give preferential rates to current mortgage customers, which may be beneficial if you're planning to take out another mortgage. Perhaps worth checking out before paying it off completely.

Have you considered getting an offset mortgage? As we have savings equal to / above our loan we don't need to make any mortgage payments but should we need the money we have instant access to it at the percentage interest rate agreed for the mortgage, e.g. if we wanted to give DS money towards buying a property we could take money out. Also, as you get older or your circumstances change you may not be able to borrow the same amount in the future, this way we don't have to reapply and answer countless questions about what age we may retire etc.

I paid mine off in full
its a mugs game to keep paying interest when you do not have to.

Credit ratings are very overrated

We cleared our mortgage and have no ongoing debt. Our credit rating has dropped and has affected our ability to do some thi go, eg: change internet provider and mobile phone provider. It feels like we are being punished for having managed to clear the mortgage and being debt free. If we had known that our credit rating would be affected, we would have reduced the mortgage significantly and RE scheduled the remainder to be paid over a few years, rather than clear it. Credit rating doesn't only affect actual borrowing.

whereas I've had absolutely no problems doing exactly the same things
after paying off my mortgage

postcodes matter A LOT
electoral roll does not (I've tested that one to destruction)
missed payments matter a lot
number of live cards (ideally with zero balance) matter a lot

but its all bilge and worth challenging

my Ikea card knackered my rating for a while - till I made them admit I did not have an Ikea card

(hi Talkin )

We paid ours off (its so great!) , but we do keep using our credit cards (pay them off every month) . Recently we also bought a 'new' car - cash ( though they were throwing loans at us) and have opened up new bank and ISA accounts .. (Nationwide , incidently as new customers as they were mentioned above.) . absolutely no problem with credit ratings, w then giving us credit cards, loan offers etc , thoug we didnt take them ) ..

I think they just try and scare you about credit ratings ..

Unfortunately our experience has been that it has made a difference. That is the only thing that has changed and suddenly it's much more difficult to do those things. Staying with current providers no problem, but changing has proved very difficult.

DR had never had a credit card when she applied for a mortgage Nationwide No problem