Pay off remaining mortgage now or keep savings as a buffer?

[fortunatelynot]

I know this as probably been asked many times before and every situation is different but I am considering paying my mortgage off and would be interested in the experiences of others.

I am mid forties and £60k left on my mortgage when my current (amazing) deal expires in the summer - I was lucky enough to get a 5 year fixed deal at 1%. Things have obviously changed now which is leading me to consider this.

I am a single parent (although my children are now young adults - they have been to university and one in particular has required quite a bit of financial support - but her course is nearly complete). I was divorced 15 years ago and literally started from scratch financially. However due to my salary and buying a very modest property 12 years old, I have the mortgage balance as mentioned.

I have approx. 95K that I can access. This is a mixture of premium bonds, some money in my normal account and an ISA. Paying off the £59K would obviously leave a big dent in this. I am aware of the 'rule' that if your savings are earning more and your mortgage rate is less, then it is better to not pay down your mortgage. However if I remortgage in the summer, I believe my rate will be around 5%.

My job, although well paid, is incredibly stressful and I have considered changing jobs at some point which would likely mean a lower income. I have also not ruled out moving at some point which would involve a slightly bigger mortgage but do not feel that this is the right time. The pros and cons I can think of:

• if I pay off now, and then do move in years to come, taking on a mortgage will be hard hitting!
• Is it best to keep some level of mortgage in case I needed to borrow/remortgage to move in the future?
• If I paid if off, would my buffer be ok?

With regards to my pension, I pay into one and this is a DB pension .

Any mumsnet financial wisdom out there?

Thank you!

if they are 5% it’s nearer £80000 so another £14,000 gone.

Yes, but also have the £60k to invest if you don’t pay off the mortgage. Could easily return 7% annually on average over those 10 years, essentially doubling the value. Let’s at least compare apples with apples.

And could easily not, at 7% there is risk of not getting out what you put in

I like this analogy, but the maths ain't mathing.

£60k mortgage at 4.5%, you'd pay £74606 over 10 years, and the monthly payment would be £622.

£622 saved for 10 years at 4%, and at the end you'd have £91589.

If you feel unsure why not pay off half the mortgage and revaluate next year.

But IMPORTANTLY, it's all very well and good looking at what £622 could become in 10 years if saved monthly, but if Op repaid mortgage, she wouldn't be saving £622 per month, she's be saving what her current mortgage payment is, because that's the amount freed up!

Being mortgage free and a forever roof over your head is a big plus

you could lose your job or become ill and struggle to pay. Yes you have savings but they will go fast

pay it off an put away the Monthly amount to build savings up

tho you have done amazingly well in the last 15yrs

I wouldn’t pay it off. I’d pay some of it off and then overpay. I’d rather have the capital than all of my savings ploughed into my house.