Anything to consider before fully repaying mortgage?
Discussion
Hi folks,
My fixed rate ends in a few days and we're fortunate enough to be able to repay the mortgage in full, should we so wish.
However, we will definitely need to borrow against property again in the future, whether for home improvements, or a property move. Little idea of timescales, but at a guess I would say a need for funds again in 2 to 5 years.
Might it be more difficult to get a mortgage in future, if we haven't had a secured loan for a number of years?
Could not having a (perfectly maintained) mortgage negatively affect our credit rating?
We could, of course, keep a small mortgage (say £10k), but unless there are advantages in doing so, this would seem a bit pointless.
Any thoughts or advice?
My fixed rate ends in a few days and we're fortunate enough to be able to repay the mortgage in full, should we so wish.
However, we will definitely need to borrow against property again in the future, whether for home improvements, or a property move. Little idea of timescales, but at a guess I would say a need for funds again in 2 to 5 years.
Might it be more difficult to get a mortgage in future, if we haven't had a secured loan for a number of years?
Could not having a (perfectly maintained) mortgage negatively affect our credit rating?
We could, of course, keep a small mortgage (say £10k), but unless there are advantages in doing so, this would seem a bit pointless.
Any thoughts or advice?
Well, rather strange chat with the branch manager at my lenders today.
He seemed almost to discourage me from repaying all bar a nominal amount, suggesting that I might want to keep hold of whatever amount I think I might need for home improvements in the future so I could pay for this outright (I'd mentioned £30k in 3 to 5 years time).
He added that, otherwise, if and when I want to borrow again at a later date, I will have to pay for this. When questioned how exactly, he stated the interest on the loan (at an uncertain future rate) and perhaps a small admin fee. Hmm, thanks for that.
So, in all, he seemed to think it might be worth me continuing to borrow £30k I don't need and pay interest on this amount during the time I don't need it, ideally using some sort of fixed rate to protect myself from future interest rate movements, thereby locking me in.
Of course, he made it clear that this wasn't advice, he just wanted me to think carefully
He couldn't help me with any questions specific to my mortgage account, as this is carried out by their call centre. Joy! Got home, phoned the call centre only to be told their systems are down until tomorrow at the earliest. Fecking useless, the lot of them!
He seemed almost to discourage me from repaying all bar a nominal amount, suggesting that I might want to keep hold of whatever amount I think I might need for home improvements in the future so I could pay for this outright (I'd mentioned £30k in 3 to 5 years time).
He added that, otherwise, if and when I want to borrow again at a later date, I will have to pay for this. When questioned how exactly, he stated the interest on the loan (at an uncertain future rate) and perhaps a small admin fee. Hmm, thanks for that.
So, in all, he seemed to think it might be worth me continuing to borrow £30k I don't need and pay interest on this amount during the time I don't need it, ideally using some sort of fixed rate to protect myself from future interest rate movements, thereby locking me in.
Of course, he made it clear that this wasn't advice, he just wanted me to think carefully
He couldn't help me with any questions specific to my mortgage account, as this is carried out by their call centre. Joy! Got home, phoned the call centre only to be told their systems are down until tomorrow at the earliest. Fecking useless, the lot of them!
Siscar said:
Just pay it off and if you need to borrow in the future go for the best deal at the time. All of this stuff of retaining a nominal amount is trying to be clever but there is little real benefit. After all it's not likely to be hard for you to borrow against the house in the future when you have no mortgage on it if you need to.
Yeah, starting to come around to this way of thinking. 
Gassing Station | Finance | Top of Page | What's New | My Stuff