Just how important is paying off the mortgage early?

[Dr Jekyll]

I've got a mortgage a bit large for my income, especially since I've passed 50. It has 14 years and about £90K to go.

But, if I raid my savings accounts, cash in my shares ISA and individual shares, I can pay it all off with about £4K left. I need more than £4K in a rainy day fund (I'm an IT contractor) so I won't pay it ALL off, but I do want to pay off good chunk with a view to paying the rest off in say 3 years max. If using my savings to pay off the mortgage meant I ended up getting a loan to buy a car or whatever I wouldn't mind because of the piece of mind of knowing that at worst my house wouldn't be repossessed.

Is it worth running my savings down to a minimum to get rid of the mortgage? My pension arrangements are separate from my savings and ISA and I've got no other debts.

On the other hand my shares ISA (about £40K) might actually make more than £40K of mortgage interest is costing me so I'm nervous about cashing it in.

I know there is no definitive answer to this but I'm interested in the range of opinion.

[Dr Jekyll]

Stevemr said:

Dont borrow to buy a car EVER.

Do keep enough rainy day fund.

I generally agree with no borrowing to buy a car. But if I had a choice between having no debts but possibly having to borrow for a car if I needed a fresh one before I'd replenished my savings, Or definitely having a mortgage. I think I'd prefer the former situation.

On the other hand, the way the market for my skills has fluctuated in the last couple of years means I don't want a rainy day fund so much as an Ark.

[Dr Jekyll]

Sir Bagalot said:

Check if your mortgage Co will allow you to claw back your overpayments if necessary.

Nationwide for example, a few years ago, allowed me to claw back over £20K in overpayments. Just took a call and I had a cheque in 7 days

Very interesting idea thanks. Almost like an offset without having to remortgage.

[Dr Jekyll]

Welshbeef said:

This x1000 suddenly you don't have to worry about anything really. Health wise a great upside, family life stress would go work stress would go as in you are there because you are enjoying what you do not that you have to be there.

The other thing I'd highly recommend for maybe 6 months post clearing it is use the £ you would have spent on monthly mortgage payments to have amazing holidays weekends away and maybe a special something for you and the wife - that boost would be great (then you can put what would hae been mortgage payments into retirement savings over and above what you do now)

I can appreciate all that, but there is also a comfort factor in having high 5 figures in liquid assets when I'm between contracts. But yes, I will pay most of it off and maybe leave a token amount in so I can hopefully borrow money back without starting a new mortgage.