stilover

I was in the same position a few years ago. Paid my Mortgage off.

However.............

I had a great rate of interest. .5% above base. What i should have done is paid all but a few hundred pounds off, as now I'm looking to move, I could have done with having that rate now.

CRAIGFIN

Yeah, I was aware that my thread may come across like that however this scenario if it plays out leaves me with £5k in the bank with no debt. By any stretch of the imagination this does not leave me "rich".

Some great advice here though. Scanning the deeds and saving in a Cloud service is a great idea.

AndyC_772

iTrader: (2)

That may well change when you've been working for a while without having to make any monthly mortgage payments!

JackClark

I was quite excited at the prospect of receiving my deeds, house is over 100 years old, absolutely nothing of interest.

zip106

This.

In some cases, it can be much harder to get credit in the future (should you ever need it) without a mortgage.

Strange thing to say, but it actually happened to my sister (who has an excellent credit history)

Dingdongler

I've heard this as well, sort of makes sense since mortage history is a easy search tool for credit checking companies.

However, how do you actually keep a mortgage of just £1000 if you have anything other than an offset account? Will the bank allow that given the administrative cost to them of you paying say £5/month?

AndyC_772

iTrader: (2)

You don't actually pay them anything at all once the balance is down very low. The mortgate is still 'open' for admin purposes, but your monthly payment is zero.

Potentially it's handy to have the mortgage open for when you eventually want to move - you can borrow back against the mortgage you already have in order to buy the new place, then clear it back down when the old house is sold. Provided you can afford a few interest payments, it's a handy way to break the chain.

CRAIGFIN

Okay, some interesting points here regarding keeping the mortgage agreement open. I think I may rethink my idea of clearing the mortgage completely. I may reduce it to a couple of grand and just pay a small monthly fee. It sort of the best of both worlds.

That's why I like to ask for other input as it opens your eyes to ideas you may never have considered before. Thanks for the advice.

stilover

Again, same position.

It's amazing how much your bank balance starts rising once you don't have a few hundred pounds a month going out to pay mortgage repayments.

I'm looking to move, so all that extra money I've been saving every month for the last few years is going towards putting into the Offset account to reduce my monthly payments on my (Hopefully) new property.

hodgy0_2

Is (to my mind) the right answer

To me the answer would be yes - hence paying of a mortgage is financial lunacy

CharlySkunkWeed

iTrader: (7)

the amount of people that said "you must be loaded" was unreal , i'm like "oh yeah , paid off a mortgage and still loaded ? " hardly.

I am no good with the whole rate and % stuff , so when it came down to it , i just wanted not to have to worry about it. Plus , its way too tempting knowing you have 30k in the bank waiting to be blown . Also hate having buying things on credit , to me , if i dont have the cash , i cant afford it. (which wont take long to save up if you arent paying a mortgage)

EddScott

So who has an offset mortgage?

Although I work in the financial sector we don't deal with mortgages so I'm not 100% on the products out there.

So as well as paying mortgage payments, any savings I keep in the account, the interest also goes to pay off the mortgage?

Got to be honest I think I would still want to keep control of the money. I mean if the mortgage is say 3% pa but I think I can get a regular 6% pa without taking too much risk with it then I'm still up by 3%. Even if the rates were on parr I'd probably still want to keep the money liquid.

If you were likely to get another big chunk of money in the future then fair enough pay off the mortgage, if you are unlikely to get another 30K in years to come better in your pocket than wrapped in bricks and mortar.

andy97

iTrader: (1)

Offset mortgages can be good. Think of it that your 30 k is making quite good interest rate,well the same as your mortgage rate. Check that you have easy access to your offset account. You will struggle to get a secure interest rate equivalent to a mortgage, especially when mortgages are going to cost more in the near future.

Paying off is a nice position to be in, but it's a state of mind. Offset your funds, this will give you the flexibility if your circumstances change.

lordharding

iTrader: (1)

Interesting debate this with some great and varied opinions
With 30k in the bank it's not much interest say £100 a month after tax?
So your not going to get rich for a few years
Always the risk of spending /blowing it or the misses will

Oh darling we need a new kitchen / bathroom etc which would swallow up half of it easily
You know what partners are like when you have a bit in the bank
Job security is a worry to everyone nowadays so guidelines are always 3 months salary for a rainy day
Ironically of you worked all your life had over 18k in savings and loose your job
NO sir ! No benefits !
come back when you have spent your savings

Had a mate and he had to live off his savings for a year if he had paid off his mortgage he could of got benefits straight away to tie him over untill he got a job

JackClark

£100 a month. More like £10.

cookstar

iTrader: (6)

That would work out to 0.4% interest.

Chip

We have an offset mortgage and could pay it off a few times over if we so wished but have the money invested elsewhere earning a far greater interest rate than what we pay on the mortgage amount.

Chip

Dingdongler

Chip, work through the maths with me please. What interest rate do you pay on the offset and what interest rate are you getting elsewhere (after 40-50% tax deductions) that works out to be far greater?

Thanks

CharlySkunkWeed

iTrader: (7)

My feelings exactly ! It was great knowing if my job went , i didnt have the chance of loosing the house. At the time the economy was on the downward spiral so couldve easily happened. Though , happened to my neighbour , house got repossed and now they live in a 4 bedoom rented house courtesy of the great brittish taxpayer , but thats another story !

Chip

DD,

YHPM

urban

iTrader: (1)

Pay off the mortgage
I've another 10 years to go on mine