would you pay off your mortgage

[moneytistheverydevil]

if you had 330K of school fees over the next seven years, a mortgage of 70K, and an income of 60K, and 110K in the bank?

It's about 650 a month at the moment. School fees will be half of gross and about two thirds of net income. About 2500 a month. We're kippered. But we have to try to make it work somehow.

Independent school is non negotiable even if we have to remortgage eventually. Remortgage or pay it off? I don't know. There's loads of equity in the house, about 500K. We can't move though, so it's useless to us unless we release it.

Thanks for any advice. I've probably pissed of loads of people now.

why wouldn't you pay off the mortgage? you have the money? what is the point in paying interest?

god what a poser

pay off mortgage

Thanks Obama. I think we should. Mortgage interest is definitely greater than savings interest and definitely greater than savings interest after tax. Dh says we should pay three years of fees with it. It makes him feel safe. Your reply is so it is quite reassuring.

Thanks jpg.

Sylvester I know. Wanted to put a red flag on it.

I won't tell you what my first instinct is because I don't think you want to hear it!

Definitely pay off the mortgage, you could always remortgage again if you need to in the future.

i would pay it off, no question. why pay interest on something you could get rid of???

Why is independent school non-negotiable? If you can't afford it, then you can't afford it.

If I had that sort of problem I wouldn't ask a load of imaginary people on the internet, I'd be asking an independent financial advisor for some advice.

Lenin I actually trust a straw poll on mn more than an ifa. Thanks for the offset tip, we have a flexible one but only one way ie extra goes in and it don't come out.

All good, v good to hear this "pay it off", excellent.

What about an offset mortgage?

I'm not joking about mn either. I'll trust a nest of vipers with our future any day.

It's non-negotiable because in the last resort we can afford it with the equity, and the schools round us are great primary, truly crap secondary.

we aren't imaginary. we're very real!

Thanks all, that instant reaction of "it's a no brainer" really helps. Sorry for the shitty "what shall we do with all our money" nature of this thread.

What mortgage interest are you paying now and is it fixed? Tracker? etc?

How safe are your jobs? Are your salaries likely to rise in the future?

What interest are you getting on your cash?

Have you looked into the maths of an offset mortgage?

There is some possibility that inflation will inflate the debt away 1970s style...possibly this will happen, especially if QE continues and interest rates are kept so low but you'll have to wait around as deflation might happen too.

Are the children actually at these schools yet?

Hi Euro and thanks. One job is safe. It's a regular flexible mortgage. What is QE?

If inflation destroys the debt it will render the savings worthless also won't it? I can't work out which is worst/best.

Maybe we do need an IFA. No I haven't done the offset maths, I only found out what they are about three weeks ago. Can't remember the exact interest rates but savings is lower than mortgage. I have to keep moving it inside the bank as they keep starting up great accounts then dropping the rates after a bit to start new ones, and if you don't keep up you get virtually nothing.

Pay off the mortgage no question. Why pay interest to the bank on something when you are not getting the equivalent back in on interest income.

I would make sure I kept some back in the bank to fund current lifestyle in the event of redundancy or something.

I don't know your circumstances but it does sound pretty bonkers at face value to be spending so much on school fees given what a chunk of your disposable income will be going on fees.

You could have a 110k offset mortgage facility and 110k cash in an offsetting account and you would pay no interest on the mortgage but could still access the £110k whenever you wanted in an offset account. Rates are low at the moment too, and they are often portable so if you did move you could take it with you to a new house.

Why is the independent school non-negotiable?

Beware IFA's. After 20 years of hunting have still not found one a smart, saavy one who isn't trying to flog products. I say pay off mortgage. My husband would say borrow as much as you can on the mortgage then use money to invest in sexy high rate of return products with varying risk profile. If of any interest, research shows financial planning decisions generally tend to follow sex lines: women tend to be more cautious and pessimistic re rates of return. I say just think how fab you'd feel with no mortgage!!