Paying off mortgage

I’m in a position to pay off my mortgage early, I think I recall hearing it’s better to keep a small amount owing than pay off in full. Is this or was it ever a thing?

Avoid publicly available confirmation you are mortgage free?

Stops someone stealing your house too

Check with mortgage provider if your house insurance is included. When I paid off mine it terminated my house insurance. Only found out four months later when I realised I had not had a renewal letter.

Mother in law ran into issues when she wanted a contract mobile phone after being mortgage free for a decade+ and not having any credit cards. Lack of current credit history meant that the mobile operator’s computer saw her as a bad risk (in spite of owning a £1m+ house outright).

If you don’t have one already, may be worth getting a credit card (before paying off the mortgage) and using it regularly enough to maintain a good credit history.

If you are effectively overpaying to pay it off then If you leave a small amount you should be able to withdraw the overpayment in the future if you need funds.

Easier than applying for a new mortgage/loan.

I presume you've filled up your pension?

If not and depending on your age, current income level etc you might want to consider that too.

Wish I was in the same position...

Unless you are in Scotland, where this is not something they do as there are different checks made in Scotland and no demand for alerts.

Mine is offset, still owe a good chunk, but have instant access to a big lump of equity if we ever needed it, I think in 3, maybe 4, years time we will be fully offset with 20 years left to run.

The only complication with this approach is that your mortgage payment is based on the none-offset debt, thanks to the post 2008 reforms that decided interest only was always a bad thing. In effect you can't stay fully offset for the full term, your credit limit is slowly reducing over time.

What that means is you pay, for us it'll be about £500, each month, the debt reduces by the £500, so you then have £500 in the offset that's earning no interest and you need to shuffle the money into an interest-bearing account instead.

Not a big deal, but it's something to remember to keep on top of and unnecessarily faffy compared to an interest-only setup where money would simply stop moving automatically.

Still the best thing we've ever done though, maintained the feeling of being a bit poor, because there's never any money in the bank account, while paying the mortgage down quite quickly. When it is fully offset not only will we have no mortgage payment in effect, there'll be nothing to overpay either, so it's a double-hit . Will probably get told to send the money to the kids investment accounts instead though rather than partially retiring, but I can dream.....

Thanks for posting that you can’t be to careful these days.