Should we pay a chunk of the mortgage off?

[Badgerforbreakfast]

Currently owe

Get an offset mortgage if you can. Money is there if you need it but your not paying interest on it

Depends on the interest rate. If you have a decent mortgage rate, you'll get more interest in a Chase savings account.

Offset mortgages have always looked quite expensive compared with a good tracker or fix, but I don't suppose it matters if you're fully offset.

How much is a chunk? How are your finances at the moment? Will you find the cost of living increases challenging, in which case keeping it in an easily accessible account might be wise, or are you comfortable and you want to lock it away before it burns a hole in your pocket?

Ahh that OP did not go well! I meant to add lots more information.

Currently owe just over £25k
On SVR as didn’t fix again due to planning a move
Pay a set amount per month rather than the DD amount that we could/should pay
Still planning to move so wary of fixing at the moment

We have a few thousand ‘laying around’ that we could put into the mortgage but is that the best use of that money? Thinking short term here rather than long. Just with interest rates going up is it better to owe as little as possible?

I’m clueless!

If you are planning to move and it's a few thousand, I'd keep it to hand for solicitors/ estate agents.

The SVR is likely to be quite high (minimum 3 or 4%) so you might as well put your 'few thousand' into the mortgage to reduce the interest you pay.

You don't need money for solicitors and estate agents if you already own a property, all those bills get paid when the sale exchange/completes.

Most we've ever needed to pay is a booking fee for a mortgage and unless you're taking a big step up, you won't be paying much of a fee, because it's likely your new mortgage won't be big enough to justify one.

You can get flexible fixes at better rates than svr - we had one when we knew we were going to move, just a £65 fee to release. They're usually variable, so move with rate changes, but would expect better than svr. I'd see what your current provider offers, as that's likely to be least faff.

But yes to PPs re keeping funds for moving costs, and over and above that comparing rate to savings accounts.

Do you have a separate saving with readily accessible cash in it?

yes it makes sense to pay it off the mortgage, but I like having a decent pot of savings so there's always readily available cash 'just in case'

You really need to look into what flexible mortgage offers you can find. Even though it's 'only' £25k it's silly to be paying SVR when you don't need to.

I presume you have a MIP? Is that with your bank or another one? Have you considered fixing & porting?

Go onto a tracker which will save you at least 1%, you can port the mortgage and pay back with no penalty. Svr is silly!

Do you have an emergency fund and any short term expenses eg moving costs covered with easily accessible funds?

if yes I would pay it off. You can always take out another mortgage if you regret it!

if not I would go with an offset until emergency funds etc built up.

Possible silly question but how does porting work with LTVs/difference in amounts etc. If we took a new mortgage now then how much would we actually mortgage and what if our next property is much more expensive than this one? Do we then just borrow more at the time? I’ve never understood porting which is probably why we just let it lapse onto SVR.

If we had between £5k and £10k over and above around £3k for emergencies should we pay that into mortgage?

At the moment depending on the price of the house we purchase the fees would come out of the equity so in my head paying off some more of the mortgage is just adding to that equity. It most likely would be under £5k between stamp duty and fees.

Thank you for everyone’s thoughts so far!

4.49% currently!!!

Offers with current lender are 2y 2.76% and 5y 2.68%

Yes you just have the amount extended for the additional borrowing. Call your mortgage company who’ll talk you through it. The sales team are usually excellent

Thanks I’ll try and give them a call this week.

I don’t want to shoot myself in the foot in any way when it comes to moving but we’ve been on the SVR for well over a year now and we can’t just be on that forever.

I guess the rate would go up if you ported to a new property with a much higher LTV? Then are you trapped with that provider?

You would port the amount you owe on the current product (fixed rate or variable), then apply for a new product with the same lender for whatever the additional borrowing is. So if your mortgage was going from 25k to say 150k you would port the 25 and apply for a further 125. then at some point in the future when it works with no ERC's you would remortgage and amalgamate the two amounts into one.
The downside is you would obviously be restricted to just the one lender to apply to when it comes to the increased amount.
Its a lot simpler than ive made it sound here, apologies!