Paying off the mortgage, need some advice
Discussion
Hello Everyone,
Looking for opinions and ideas around the best way to play this scenario.
My 2yr fixed rate expires in July. Right now the amount outstanding is a modest £39000. At that point I will have £6000 in cash. I am keeping back £1000 for my emergency savings).
The wrinkle is that I have a lot of SAYE shares maturing in November that will bring me (assuming everything stays "average" about £30,000)
In order to optimise it all I am thinking:
Going onto SVR until November, putting in the £5K in July.
In November, cashing in the shares (split with my wife, rinse them through "bed and breakfast into ISA's so as to avoid invoking the £20,000 limit and paying tax on the rest)
If I put the money I have saved plus the share money in July I avoid any penalty clause in the mortgage. That would leave me with a shortfall of about £3 - 4K but I should be able to get rid of that by March at the latest as bonuses (not guaranteed but hey) would bring in the shortfall, after tax.
Am I thinking along the right lines or is there a better way to do it?
TY in advance!
Looking for opinions and ideas around the best way to play this scenario.
My 2yr fixed rate expires in July. Right now the amount outstanding is a modest £39000. At that point I will have £6000 in cash. I am keeping back £1000 for my emergency savings).
The wrinkle is that I have a lot of SAYE shares maturing in November that will bring me (assuming everything stays "average" about £30,000)
In order to optimise it all I am thinking:
Going onto SVR until November, putting in the £5K in July.
In November, cashing in the shares (split with my wife, rinse them through "bed and breakfast into ISA's so as to avoid invoking the £20,000 limit and paying tax on the rest)
If I put the money I have saved plus the share money in July I avoid any penalty clause in the mortgage. That would leave me with a shortfall of about £3 - 4K but I should be able to get rid of that by March at the latest as bonuses (not guaranteed but hey) would bring in the shortfall, after tax.
Am I thinking along the right lines or is there a better way to do it?
TY in advance!
You will need to consider whether the shares will increase in value more than the cost of paying your mortgage monthly.
In a similar position myself having built up a pot of shares but I'm holding onto the shares as they are undervalued and I don't want to pay the CGT on their sale either.
In a similar position myself having built up a pot of shares but I'm holding onto the shares as they are undervalued and I don't want to pay the CGT on their sale either.
ferret50 said:
Against those above, but, there is nothing to match the feeling that one gets upon clearing the mortgage !
Closing your own front door, looking around your home and yelling out....'It's mine, all mine!'
Agreed.Closing your own front door, looking around your home and yelling out....'It's mine, all mine!'
It's a nice feeling when you see your bills going out and it's only £500 or so for mortgage/rent, council, water, gas, elec, etc.
I look at bigger houses round here and as much as i'd like a double/triple garage and some spare rooms for hobbies, the thought of seeing £1000-£1400 going out for a £150k-£200k mortgage just doesn't appeal.
The focus now is on salary sacrifice into pensions, building up some premium bond and ISA savings, and planning to reduce hours at work before hitting 50.
Edited by LowTread on Friday 15th March 11:44
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