should I pay off my mortgage early and how would I go about it?

Question

My mortgage was with The Woolwich, since taken over by Barclays

Answer 1

Its always better to pay off your mortgage. Once you pay it off, the house is yours. These people that tell you to invest it if you can make more forget one thing. Risk. Pay off your house and take the payments you would have made and invest.

Answer 2

You can either get a mortgage that is linked to your savings and current account - basically it means that the interest you would have earned on your savings or current account would be paid off your mortgage, thus reducing the time it takes for you to pay off your motgage. Or you can take out a new mortgage for the amount left to pay on your mortgage but over a shorter time, so increasing your monthly payments but reducing the time and there for the amount of interest you pay.

You could also use any savings you may have to pay off a lump of your mortgage but keep your present monthly payments which would also shorten the length of your mortgage and thus the interest.

Or win the lottery and pay off the lot!!

Ultimately the decision as to whether or not you pay it off early is entirely up to you. Depends on whether you are bothered by the interest you pay, if you can afford to use your savings or increase your payments or if you have won the lottery or come into some money some other way. If you really want to get some advice on this, speak to an independent financial adviser (IFA) who will tell you what would be best for someone in your particular circumstances.

Answer 3

Mortgages change hands from time to time, don't let that spook you. The follow-on questions to ask are: Are there any pre-payment penalties? assuming no-> Is the interest rate you are earning on the money that would be used to pay-off the mortgage greater then the interest rate of the mortgage(which is actually less then stated since you get a tax deduction for your mortgage). This assumes of course you are not touching ~6 months of equivalent salary for emergencies. Example, if you have your money in a bank savings account or CD then you would likely benefit by paying off your mortgage. If your money is in 401K, Roth IRA, etc... in funds that invest in Latin America, China and South East Asia (FLATX, FSEAX, FHKCX ), and even with the recent market correction they are still earning interest in the high teens ytd, your money is working much better for you there then paying down your mortgage...

Answer 4

You could make regular lump sum payments or you could increase your monthly payment to pay off the mortgage earlier. But you should check first and make sure you won't be penalised for doing this as some mortgages are for specific periods at specific rates and early payment will entail you paying a penalty. Ring your mortgage advisor and ask what is the best way to do it.

Answer 5

The mortgage holder is irrelevant .

The question is which way to allocate $$$$ .

If you can make better % return on investment than the rate on your mortgage , put the extra $$$ there .

If your mortgage % rate is higher than what you are getting on your investments , pay off the mortgage .

Currently , my investments are making 10% to 15% annually and my mortgage is 5.375% 30 year fixed ,
Soooo , my extra $$$ goes to the investments .


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Answer 6

Check your mortgage paper or your existing lender on any penalty for early repayment of your mortgage loan.

If you have surplus cash, it's advisable to use the cash to reduce your loan and interest commitments. Unless, you have investment options for your cash surplus that can generate better returns than your mortgage finance cost.

Anyway, the benefits of lower loan interest outweigh the penalty costs, thus the option of early repayment is a prudent approach. If you are generally a prudent saver, you should take on mortgage loans that allow you to make early repayments without facing any penalty costs.

Answer 7

Mortgage agreements are different. What I would say is that paying it all off is not always a good idea. If you keep a very small mortgage you can always top up if you need some finance, as it is a good source of borrowing .

Answer 8

yes - but hold back a certain amount in what i call a rainy day fund -- enough for 5 -6 months expences -- othe wise best thing you would ever do --- sleep better at night under a paid for roof -- just call your bank and they should be able to arrange the money transfer!!

Answer 9

Yes if you can afford to do it go & do it asap. Just Contact your Bank & they will give you details. It should be as simple as transfering money.