Reply With QuoteI think that has got to be a no brainer given the interest rates on savings.
I have reached a point now where I have enough money in savings to repay the balance on my mortgage
I have 24 payments to make-
Does it make sense to close the Isas and pay the mortgage off (if I can)
The rate is 4.5% I think so greater than the interest I'm getting
Any thoughts would be appreciated as despite my username I'm no MSE
Last edited by lewie; 25th January 2016 at 19:28.
I think that has got to be a no brainer given the interest rates on savings.
Pay off the mortgage.
Are you sure about that? Nationwide returned my deeds ages ago, when the mortgage still had several years to run.Originally Posted by HoneyFB
Deeds are not as important to keep locked up as they once were as they are now all on a database thats why a lot of building societies sent them out to you even though there is an outstanding mortgage.
I already have my deeds -
Thanks for the replies
To echo what's been said here - pay it off but make sure you don't get any early repayment penalties.
Pay it off, sit down with a large brandy and smile.
I'll need to call them and weigh up the total cost- would love to ditch the mortgage before I hit 46
Pay it off. I did mine at the end of last year which is why I am here now
(With the caveat about early repayment charges)
And the Land Registry holds all the information regarding deeds so it's not an issue about storage these days.
Last edited by Mr Curta; 1st July 2014 at 13:44.
Don't just do something, sit there. - TNH
Don't forget that you can't get those ISA allowances back. Short term there is an interest rate arbitrage, but you may not be better off in the long run.
You'll still be getting tax free interest on those ISA balances decades in the future (god willing), you need to do the maths based around some conservative assumptions about interest and tax rates.
Lets start at the beginning: whose name is the house in? whose name are the savings in?
House in both our names - savings 1/2 in each- it's not a massive amount of Ģ- around Ģ15K
Don't swallow the banks attempt to charge Ģ80 per electronic transfer to close my B/Soc mortgage
I just walked 100yards & paid in two cheques, all done by prior arrangement
TT
I have found a 2010 mortgage summary and appears then when I owed about Ģ35k the redemption charge was Ģ980- if I repaid the loan in full
If you pay your mortgage off will it wipe out all your savings?
If then answer is yes then dont pay it all off. One should always keep 3-6 months of basic living expenditure(mortgage/rent/utilities groceries ,etc ,monthly expenditure that one cant forgo ) in a easy access account for unexpected circumstances .
I think I can live without that - I'm in a pretty secure job( as is Mrs Lewie with national companies)a couple of months mortgage free will start to re top the savings
This is good advice. Coupled with making sure no serious penalties for early redemption.
Whatever you do it is a pretty good position to be in.
Hope I'm not drifting off topic here, but I've heard a few people say this recently about having the bank look after deeds. What would happen if you were responsible for them and they were lost or damaged/destroyed?
They're not important now as the Land Registry is now computerised.
http://www.landregistry.gov.uk/publi...-my-deeds-kept
This is a no brainer. The only question is will it wipe your savings out completely and are you in a fixed term fixed rate mortgage contract.
My advice FWIW:
1) always have 2-3 months of salary income in savings as a minimum.
2) If you're in a fixed term fixed rate mortgage contract there might be an early exit penalty so take that into account. Maybe pay the mortgage of at the end of the contract.
3) Generally it's always better to pay off debt as soon as you can. This is the foundation of all home budget planning, always has been and always will be.
4) The day you pay the mortgage off open a regular savings account and pay the same (or close to) into that every month.
Yes - much more important now that you check your title is registered with the Land Registry and if you are mortgage free to make sure the title indicates this. Also worth signing up for their fraud alert service once you have clear title registered just in case some scrote tried to nick land that you own, - and yes it does happen.
Pay it off and smile.
It sounds a no-brainer, but getting a loan without a job might be a challenge, so there's something to be said for always having something in the bank, especially with interest rates at such a low level (relatively).
That might be totally irrelevant to the OP, but it's a counter to the general perception that being debt free is the be-all and and end-all.
24 payments is bugger all, so I'd be tempted to just carry on paying off the mortgage and enjoy having the security of a decent amount of cash on hand. Of course, you could find a middle ground (pay off half, keep half the savings).
Anyway - What's "Savings" - Haven't you seen SC?
M
Breitling Cosmonaute 809 - What's not to like?
Agreed it depends on circumstances, as I mentioned, and on your financial position. Bottom line though is simple. How much will you pay in interest over the 24 payments v how much you can earn in interest over the same period on the same amount of cash that you need to settle your mortgage. I did leave out one important thing of course. If you have credit card or, god forbid, Wonga style loans then pay those off first.It sounds a no-brainer, but getting a loan without a job might be a challenge, so there's something to be said for always having something in the bank, especially with interest rates at such a low level (relatively).
That might be totally irrelevant to the OP, but it's a counter to the general perception that being debt free is the be-all and and end-all.
24 payments is bugger all, so I'd be tempted to just carry on paying off the mortgage and enjoy having the security of a decent amount of cash on hand. Of course, you could find a middle ground (pay off half, keep half the savings).
Anyway - What's "Savings" - Haven't you seen SC?
M
You'd be surprised how much of a sense of satisfaction is to be had from owning your own house outright. Not to mention that until you are mortgage free the mortgage holder can sell your house out from under you if you fail to make a repayment. (OK not quite that simple now but that's the principle.)
Last edited by aldfort; 1st July 2014 at 15:45.
At the levels you're talking about my advice would be to change mortgages and if they're still available, get an offset mortgage with the full amount offset against your savings. There are few things more satisfying than paying off your mortgage but and it can be a big BUT to some; if you need to raise any capital in the future, extensions, loans, university fees etc you cannot go back to the now non-existent lender and remortgage without the huge upfront costs associated with a full purchase. it's something not often mentioned but worth considering if you have future potential improvements on the house or whatever planned.
Good luck
Nice one, cheers
Now you have the mortgage down to a manageable sum and horizon I would just ask the mortgage co the maximum overpayment you can make and go with that.
I don't see the need to rush to the line so to speak as the last couple of years you will mostly be paying off capital so I don't think there will be much of an interest element left now - I certainly wouldn't change mortgage as you are likely to incur fees which will far outweigh any interest saving you may make on paper.
Interesting perspective. I much prefer funding "improvements" out of savings. but then I'm old fashioned in that regard and don't feel the need for the instant gratification that a new kitchen (insert home improvement of choice) will bring. Same with kids, if you know they are probably going to go to Uni then you've 18 years to prepare for that eventuality. Maybe my perspective is wrong for the modern age but I worry for low net worth individuals with expensive life styles lived on credit.
I would look into the details and find out how much is liable for any early redemption or fees.
If your interest on your mortgage is larger than your savings then pay it off, it's as they say a "no brainer,"
By the way you can't help but feel good about owning your own house outright, in fact its such a great feeling that I've done it twice now.
All true and I agree it's oddly satisfying actually OWNING your own house, although by the time I paid mine off, the monthly repayments were so little as to be of no consequence!
M
Breitling Cosmonaute 809 - What's not to like?
I can't wait for this position myself.
I've got 47 months left on mine, of which 23 are at a fixed rate and the final 24 go onto variable which also sees ERP's go. Always been my intention to pay it off at the end of the 5yr fixed deal I took out in 2011 and I have a 5yr fixed ISA mature the same month which should pay the whole thing off. I will then put 95% of my monthly payments into a savings account or something similar.
I've been wanting to move house for a few years but the closer I get to the above, the harder it becomes as I genuinely can't wait for the mortgage free feeling.
Good luck with what you decide to do.
A long time ago I was given a wise piece of advice regarding mortgages & up-sizing the house, which was to increase the mortgage value as and when you see fit & can/want to but not to increase the term. Not only does this make sure the payments are actually affordable (rather than disguised by converting 8 years of mortage into 25) but also will ensure the mortgage is paid off to plan as is too easy to keep adding 5 years to the mortgage and what started as a debt to be paid off in your 40s is now a debt in your 60s.
Oh I wish my commercial and personal mortgages were Ģ740,000 and when I sold my business and paid them off last year as the song says "Oh what a feeling"nothing like owning the property you live in
I FEEL LIKE I'M DIAGONALLY PARKED IN A PARALLEL UNIVERSE
Paid mine down to a couple of hundred quid. Figured I'd keep it open as they say I can borrow back any over payments or if I ever wanted to increase the mortgage again for house improvements or just a cash advance at a low rate.
This may not apply but if you have a mortgage you can always borrow for what ever reason , no mortgage it's a little harder to borrow ,
This is exactly what I did, thought it best to keep my options open.
Yeah I get what you mean. That was basically what I was going to do about 18 months ago - take out a new, albeit shorter term 15 year mortgage to get the house we wanted. Payments would have been the same but I'd have had about 11 more years paying it. Now I can't think of doing that and I'm of the mindset pay it off and then save the rest. I should be 44 when its finally paid - I took my first 20 year mortgage at 23 so am not fair off what I planned back then
I paid mine off down to Ģ99 left just to keep the account open. I'm paying 19p a month and it's got another 18 months to run but it gives me access to Ģ120k+ at a loan rate of 1.25%. Just in case I want to do any home improvements etc. Cheap money, if there is such a thing.
If we paid our mortgage off, my wife would spend the mortgage amount - I guarantee you that. I've always tried pay down a little extra every month though as no mortgage should mean more options.
Good point. What I did when the mortgage went was to just use my credit card for bits and bobs and pay it by DD every month - that helps keep your credit score healthy I think. There are other tactics I'm sure, but certainly an aspect of the debt-free life to consider.
When i had savings enough to cover the mortgage, i moved my mortgage to First Direct on an offset mortgage and put the savings into the linked savings account. Im now paying no interest at all but have all of the savings accessible immediately should i need it. Might be worth considering if youd like instant access to your savings...
Sound advice. No need to rush. I would keep the savings and carry on making monthly payments.
Well all done and dusted - well will be Friday
Just logged onto my online banking to transfer part of an isa to pay off the mortgage his Friday
I fell so pleased - just in time for my eldest daughter to decide she is moving out to live with her b/f - cue dad for some assistance
All done at 47
Last edited by lewie; 25th January 2016 at 19:35.
Congratulations, must be a lovely feeling, I've got years left on mine 😩
Cheers..
Jase
Good work, itīs a nice feeling enjoy.
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Good work, itīs a nice feeling enjoy.
Well done mate, I managed the same a few months back. Great feeling not to have to pay it every month. Think of the watches you can buy instead!
Congratulations, bet its a fantastic feeling!
Was all set to do mine by May this year with the maturing ISA. However, we finally moved when I had 5 payments to go (taking into account paying it off 24 months early). FIVE BLOODY LEFT!
Took a new 10yr deal out to buy the new place. However, it was the best thing I've ever done. Been in 5 weeks and I'm the happiest I've been in years
Anyway - back on topic, well done again!
I'd keep paying it off for the next couple of years. It's not a long time to wait for mortgage freedom.
I wouldn't give up the savings so easily. You don't know what could be round the corner that might require quick access to a lump sum or might put your salary at risk.
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