Redemption v Repayment

[SqueeksAway]

I’m lucky enough that I can pay off my mortgage The mortgage statement is 10.5k and I’ve 2.8 years to go - the redemption is 10.8k - I’d really like to clear it straightaway Emotionally being debt free and able to save would feel so good but am I being foolish not to repay each month to save £280
Would really welcome wise advice

Can you overpay each month? That way, the mortgage will end earlier and you'll save even more.

Surely 2.8 years of interest on 10.5K is more than £280 anyway!

The £10.5k is what you owe now, and if you pay now there will be some fees to make the redemption charge of £10.8k?

But if the mortgage runs for another 2.8 years, there will be interest added on top. How much that is depends on the rate, obviously, but it might not be more than £280. If your mortgage interest rate was 1% pa, it would be about £250 in the 3 years. Also if your interest rate is low, you could get more interest in a current account - if your main current account was the Santander 123 account, you would get 1.5% interest and cashback on bills that would offset the £5 monthly fee - we get between £4 and £4.50 pm and our bills are very low - no pay TV, less than £20 pm on mobile phone contracts, Band A council tax. Anyone with more average bills would get more than £5 pm cashback.

If you don't pay off your mortgage, there is also the advantage of having the money available without needing to borrow, which would probably be at a higher rate unless you could get a 0% fee free spending credit card.

We are in a similar position. For years I was itching to pay off part of our mortgage, but finally it makes no sense to do so. Interest rate is 0.85% and we're getting 1.5% in the Santander current account and between 3 and 5% on a few thousand more in other accounts.

I beg to differ - if you pay off your mortgage now, you will get rid of that monkey on your back.
The feeling of being mortgage free cannot be is like a huge weight have been lifted from your shoulders - its called freedom.
Unless the house needs work, I would pay off the mortgage and walk with that spring in your step.

Thanks! I checked everything out but overpaying didn’t make much difference so I bit the bullet and paid it all off

Tbh it was nice to see it disappear from my app list - no more minuses! And a spring :)

A little belated but huge CONGRATULATIONS @SqueeksAway!

What an amazing feeling, knowing your home is 100% secure now, for good.