CRAIGFIN

I'm in the fortunate position of having a spare £30k knocking around and my outstanding mortgage amount is just over £25k.

Would it make sound financial sense for me to just pay my mortgage off early in one fell swoop? It would be a nice feeling.

What happens to my house deeds? Do they get sent to me? What happens if they get lost / destroyed?

JackClark

Pay it off. The deeds will be sent to you, apparently they're not as important as they used to be so no worries about losing them.

Midlife......

iTrader: (2)

In the olden days of MIRAS I'd stick with paying the mortgage and keep the 30 grand in a good account... a bit different now LOL..

It depends if you need the 30 grand for anything else at the moment? Paying off the mortgage and then borrowing to buy a car would be a bit silly.

My local solicitor would store deeds for a cheap price.

I'm just jealous as I pay off my mortgage when I'm 62

Shaun

RobsyUK

iTrader: (2)

Check to see if you get a pay early penalty. Mine will be paid off by the time I'm 50 and some how managed to wangle being able to pay more each month with no extra costs..

Get rid of the mortgage.

Midlife......

iTrader: (2)

.........I pay mine off when I'm 62, only 10 years to go

Shaun

jonc

it's not a dilemma, pay it off!

Ginola

iTrader: (25)

You will save on tax by having a mortgage on your property (least so I’m told), cant remember the details but I know a few rather "wealthy" individuals and they maintain a mortgage (a small one) on all there properties even though there is no need too purely as a tax break

Jamescsti

No question in my mind, pay off the mortgage. Would be a lovely feeling.

...seamus...

pay off the majority of your mortgage and spunk the rest

Boro

iTrader: (1)

22B!

Screw the mortgage! lol

john banks

You may also have some legal fees and discharge fees, can cost a few hundred, check your paperwork. If you can transfer the mortgage without fees with the same provider to an offset mortgage and you are allowed to take the balance very low it could leave you with a facility to draw on if you need the money, but check that the regular repayments don't accidentally drop below a minimum threshold or pay off the mortgage if you want to keep this facility. If you are a sole trader running a business from home, you can't pay yourself rent, but you can charge some of the mortgage interest to your business on an apportioned basis. If you wish further credit in future, oddly having a mortgage or having had one recently can help, or at least a sofa on interest free recently, or a mobile contract.

I think NS&I have withdrawn the index linked certificates when I last heard, but it would have been easily possible to make more on these than many mortgages, although that could change. Can't think of many bank accounts after tax that would beat paying the mortgage, and most other investments have risk attached and arguably are for when you've cleared the mortgage depending on your view, otherwise you end up borrowing and lending and just feathering the nest of the financial services industry.

ScoobyWon't

Are you allowed to make over-payments on your mortgage?

If not, can you lend me a fiver?

Personally, I'd look if there is anything I need, rather than want, which would attract more interest and base my decision on that.

360ste

iTrader: (1)

Get rid of the mortgage. A house near me with a family of four, was repossessed today. So not something you would want to happen.

53

iTrader: (41)

Keep some mortgage. even if it's just a grand.

Dingdongler

It's a simple question that has a simples answer.

Answer the following question

Is there something that you want to invest in that might return more (after tax and costs) than the interest payments on the mortgage?

If you answered

1) Yes. Then don't pay off the mortgage

2) No. Then pay off the mortgage

lordharding

iTrader: (1)

A no brainer
Pay of the mortgage
Best feeling ever I haven't had one for 15 years and it's great not having a worry that if anything happened to me the misses would be ok and not thrown out on the street
The next trick is after its paid off
Pretend you have a mortgage and set up a build up savings account for 2/3/4/500 a month whatever you can afford and it's amazing how much you save up when you look at the bank books ,that's your pension plan for the future
I'm counting down the days now to my early retirement

Also the feel good factor and motivation is worth so much when you know your house is yours

My deeds have been locked in a solicitor vaults for 15 years and they have never sent me a bill
I think you can leave a token £20 outstanding with your bank building society so they store them for you

pimmo2000

iTrader: (6)

So Shaun, how old will you be when you pay your mortgage off ?

CRAIGFIN

Thanks for the great replies. It pretty much sums up what I feel.

I don't need the money for a car as I have an E92 BMW M3 which I own outright and I have every materialistic thing I could ever wish for. I don't have any loans / finance / credit cards either. It just feels right to pay my mortgage off and I'll have no debt whatsoever. I don't think I could put it to much better use to be honest.

pimmo2000

iTrader: (6)

So, basically, look at me I'm rich.

CharlySkunkWeed

iTrader: (7)

i paid mine off 2 years ago , and the money just rolled in ! When all your wages is getting spent on is utility bills and food , its amazing how quickly it builds up. Allowed me to save for two (worry free) years and afford a bigger better house ! If you have 5 grand left over your sweet as its a good buffer till you save a bit from not paying mortgage.

CharlySkunkWeed

iTrader: (7)

im not rich by a long shot , as all my money was spent paying of a mortgage !

stevep360

iTrader: (20)

i keep my mortgage going but have my savings in an offset account just in case, so don't pay any mortgage interest. I only have a very small amount owing anyway. Good luck with what you decide

nik52wrx

Why not leave a pound on your mortgage and let the bank hold onto the deeds

Coffin Dodger

Deeds are now held electronically by the land registry. You don't need the paper copies. We have a mortgage on our house but got sent the deeds when the sale went through, I thought this was unusual at the time but after further investigation that is how it's done now.

That said I wouldn't want to lose them so we have them in a fire resistant box hidden away with other important stuff and I've scanned them and left an electronic copy in a few places (e.g. Gmail, parents house, etc.).

Galifrey

iTrader: (3)

Don't pay off the mortgage, wait hear me out.

Get an offset mortgage and put the money in the savings element so you pay no more interest on your mortgage.

This allows you to retain access to the money (rather than borrow again) should your circumstances change, and the bank/building society will still retain and store your deeds free of charge (much safer than having them stored elsewhere).

The reason I say this is because it is much easier to access your own funds at short notice than have to borrow money at short notice, this allows a safety net should something go wrong and you need money in a hurry.

I would recommend checking out the Woolwich Offset Tracker, even though Barclays are a PITA most of the time.

EddScott

If it was me I'd keep the mortgage and invest the 30K. On the basis that I would aim to get more of a return from my 30K than the mortgage payments of the 25K.

I would also prefer to have 30K in available assets rather than have it locked in my house.

lordharding

iTrader: (1)

The debt free it's all mine message is the best you can have

It's saving the money and making anything is the hardest part nowadays
4.2 fixed for 5 years on Isa is about the best but with inflation eating into savings interest we are no better off for investments really and prices will continue to rise but the op is in a good finincial position ,M3 etc so to pay it off is the best move for him

J4CKO

iTrader: (1)

Get rid of the mortgage, I don't owe anyone a penny, not even an overdraft anymore, well £600 on the credit card but that will get paid off when the bill comes in.

People get up to their eyeballs buying stuff they dont really need, cars, clothes, holiday's, gadgets etc, best to stack as much into your main, appreciating asset rather than spending on losts of things that retain very little value, always bemuses me when people buy cars on a mortgage, how many big SUV's at 40k plus got paid for that way, how many had ten grand holidays on the mortgage eating into the equity ?

Always a toss up though, between enjoying life and havign some nice things, but I think a few years back a lot convinced themselves they were high end consumers based on credit.

ALi-B

iTrader: (1)

Get the calculator out;

Tot up what it'll cost you in total to keep the mortgage on its current terms
Tot up what it'll cost to pay it off (penalties etc)

Assume the £30K goes into a low-medium mixed risk investment, its going to be be around a 6% return pre tax...minus the rate of inflation and the cost of keeping the mortgage.

Most likely it'll show as being better to pay it off, but see if you can find a impartial IFA to see what he can come up with. Just be aware many will want you to invest money rather than pay off the mortgage so take some salt with what they may say.

AndyC_772

iTrader: (2)

Talk to your mortgage provider. You may well be able to keep a nominal £1 outstanding, which doesn't cost you anything but means that if you do need to borrow money at some point in the future, you can do it at the mortgage rate rather than a much higher personal loan rate.

Borrowing back against a mortgage arrangement that already exists also means you don't have to take money out of ISAs - which, of course, you can't put back once it's been taken out.