Mortgage - pay off or not?

[Flip Martian]

Is there any advantage (credit rating, for example) in keeping a mortgage? I currently pay about £700 a month and have about 22 years left on mine but in a few months will be in a position to pay it off (my fiancee is selling her house and moving into mine).

Which puts me in a great position; I know how lucky I am. Just wondering if its worth our while to leave a nominal sum to pay off to keep the mortgage open?

Any opinions welcome, please?

[GarryA]

I'm paying mine off as fast as I can but whilst its a good rate I'll keep it at 1k or summin so I can lend myself money at a good rate.

[Wacky Racer]

Just pay it off. Don't even think about it.

[bigandclever]

Flip Martian said:

in a few months will be in a position to pay it off (my fiancee is selling her house and moving into mine).
...
Any opinions welcome, please?

Please get the paperwork sorted. None of this "we're in love, we'll never split up" bks

[Deva Link]

Is she really going to give you all her money to pay off your mortgage? That's brave of her.

[Vixpy1]

Why does she not keep her house and rent it out, pays her mortgage and helps with yours.

[Flip Martian]

Looked at renting it out but her house is owned outright and she just wants rid - fresh start up up here.

Yes, the paperwork will be sorted out - been round the block a few times so not naive by any stretch. And no, she's not giving me her money, she's buying a share of my house. Bit of a difference.

[Nice But Dim]

Sort out the paperwork wrt your fiancé and pay off the debt

[Flip Martian]

Nice But Dim said:

Sort out the paperwork wrt your fiancé and pay off the debt

Cheers. I'm erring towards that - not borrowing money for the foreseeable future (not planning to anyway).

[Flip Martian]

Paddy_N_Murphy said:

Even when "you" decide you are equity rich and need a bigger better house?

Don't need a bigger house - no kids now or on the horizon and I love the house and area I'm in. Plenty of space, nice village, the only reason I'd move (assuming we don't split up) is if they change the use of the field behind the house to "residential" from "agricultural".

[Manks]

Flip Martian said:

Is there any advantage (credit rating, for example) in keeping a mortgage? I currently pay about £700 a month and have about 22 years left on mine but in a few months will be in a position to pay it off (my fiancee is selling her house and moving into mine).

Which puts me in a great position; I know how lucky I am. Just wondering if its worth our while to leave a nominal sum to pay off to keep the mortgage open?

Any opinions welcome, please?

Keep a small mortgage I'd say. If you want to raise another mortgage for any reason you'll do better if you have a recent mortgage payment history.

[bigandclever]

I think Soovy and Tonker's posts have finally got to me. All I can hear is "It's my house, I like it, I like the area, I'll only move when I want to, there're no plans for kids, my fiancée is going to pay off the 22 year's worth of mortgage, it'll be fine".

I do apologise

[Deva Link]

Flip Martian said:

(assuming we don't split up)

..so you're thinking about it then?

[Flip Martian]

Not considering it, no! But like I said, I'm not naive either.

Manks said:

Keep a small mortgage I'd say. If you want to raise another mortgage for any reason you'll do better if you have a recent mortgage payment history.

That may well make sense too - any repairs or changes to the house might be better done that way. Thanks.

[louiebaby]

For me, everything I'm working towards is having a house in a village I like completely paid off and free of all other debt.

With only the normal monthly running cots of council tax, utilities and such like, you must gain a massive amount of freedom from being tied to a job you dislike.

Do it, but each of you should pay the full amount you can into an ISA for any unexpected maintenance in replacement of a mortgage.

You're in a very enviable position in my opinion, for what it's worth...

[Welshbeef]

Great position to be in - well done.

Does your mortgage have any early redemption charges? If so calculate if you are better off paying it off and paying the early redemption charge OR paying the monthly installments until there is n early redemption charge.

Secondly is your mortgage an Offset? If so I'd put all the cash into the savings pot linkdto the account so your fully offset. Then just leave it every month for the next 22 years a DD will reduce that pot down. The benefit is IF you need cash for whatever reason in the future you will have instant access to it and no fees except the prevailing offset mortgage interest rate to pay. Think - buying a replacement car this will be the cheapest way to finance it, extension, new kitchen (you will need 1 or 2 refits in 22 years) ditto bathroom, new roof, rewire of house, etc.


As I have an Offset I'd do my second choice & then put the exact same amount as the mortgage used to cost into ISA's Premium bonds and additional pension contributions.
Basically enabling a very comfortable retirement or enabling sooner retirement.

I would possibly also consider maybe a 3 month blast of splashing out using what you would ahve paid as mortgage payments on Antigua and the like. Or to have the garden professionally landscaped so you can enjoy your place even more.

Then sign up a the local Scout leader to show your committment to the local community

[Flip Martian]

louiebaby said:

For me, everything I'm working towards is having a house in a village I like completely paid off and free of all other debt.

With only the normal monthly running cots of council tax, utilities and such like, you must gain a massive amount of freedom from being tied to a job you dislike.

Do it, but each of you should pay the full amount you can into an ISA for any unexpected maintenance in replacement of a mortgage.

You're in a very enviable position in my opinion, for what it's worth...

I wasn't expecting to get to this position so quickly but yep, I know I'm really lucky, cheers. Can't wait for the day where I don't feel tied to the job!

[Flip Martian]

Welshbeef said:

Great position to be in - well done.

Does your mortgage have any early redemption charges? If so calculate if you are better off paying it off and paying the early redemption charge OR paying the monthly installments until there is n early redemption charge.

Secondly is your mortgage an Offset? If so I'd put all the cash into the savings pot linkdto the account so your fully offset. Then just leave it every month for the next 22 years a DD will reduce that pot down. The benefit is IF you need cash for whatever reason in the future you will have instant access to it and no fees except the prevailing offset mortgage interest rate to pay. Think - buying a replacement car this will be the cheapest way to finance it, extension, new kitchen (you will need 1 or 2 refits in 22 years) ditto bathroom, new roof, rewire of house, etc.


As I have an Offset I'd do my second choice & then put the exact same amount as the mortgage used to cost into ISA's Premium bonds and additional pension contributions.
Basically enabling a very comfortable retirement or enabling sooner retirement.

I would possibly also consider maybe a 3 month blast of splashing out using what you would ahve paid as mortgage payments on Antigua and the like. Or to have the garden professionally landscaped so you can enjoy your place even more.

Then sign up a the local Scout leader to show your committment to the local community

Thanks - the early redemption period ends in June, which works out ok. It will be a few months I'm sure before the other house can be sold etc. Its not an offset no - I just had a straightforward tracker for the last 3 years, which worked out really well when the interest rate dropping so low for so long.

The "more commitment to the local community" will have to wait until I no longer commute to London every day but this will at least hasten that day, hopefully. Already promised my fiancee the Antigua/similar break when its all over - been quite a bad couple of years for both of us with a lot going on and still to get through - this will be the start of a new chapter. And the holiday will be a nice bonus to start things off.

[Welshbeef]

Flip Martian said:

I wasn't expecting to get to this position so quickly but yep, I know I'm really lucky, cheers. Can't wait for the day where I don't feel tied to the job!

But you still need to work very hard - else all you will have is an asset (house) paid for and no future provisions savings, bonds, guilts, pensions, baby fund, university fund, extra early retireing & amazing holiday fund.

[Flip Martian]

Welshbeef said:

Flip Martian said:

I wasn't expecting to get to this position so quickly but yep, I know I'm really lucky, cheers. Can't wait for the day where I don't feel tied to the job!

But you still need to work very hard - else all you will have is an asset (house) paid for and no future provisions savings, bonds, guilts, pensions, baby fund, university fund, extra early retireing & amazing holiday fund.

Absolutely - but at the moment I remain tied to a job in London as it pays far more than the equivalent locally. Being freed from having to find quite so much in outgoings every month will be liberating and allow for other avenues to be explored - although I shall probably stick at it a while longer just to build up some capital towards those things you mention.