Hi,
I'm looking for some advise; both about what i should do, and what i could do.
I'm in the fortunate position of owning a house with a mortgage, and have the same about of cash in an easy access bank account. The dilema is should i pay off the mortgage or do something else with the money?
The main reason why I'm procastinating is because we are considering moving up the housing ladder to a bigger house probably double the price (if we saw the right house tomorow we'd go for it, but i recon it'll be another 2 years+ before we move). In this case we would still have to have a mortgage around 50% LTV, and looking at the mortgage market I cant see anything as good as we are on (even before fees), so dont want to pay off one mortgage to then have to get another with worse conditions.
The Facts:
When me and my wife first moved in together we rented one house. I wasn't a fan of the hassle of being a landlord so sold last year which is where the cash came from. Since then its been in a high interest saving account (3%) which after tax wasn't far off mortgage rate so for the sake of liquidity kept it there. This is coming to an end and now saving rates have dropped right down.
It's tempting to pay off for the compfort of it, but i know i'll look back and think there was a better way to do this. Equally putting money into an ineffecient place now doesn't appeal incase we take longer to find the "forever house".
Had a search on forum and didn't find anything about this - most post are about paying off mortage, or getting 2nd home.
So what would you do? Is there an obvious alternative I've missed here?
I'm looking for some advise; both about what i should do, and what i could do.
I'm in the fortunate position of owning a house with a mortgage, and have the same about of cash in an easy access bank account. The dilema is should i pay off the mortgage or do something else with the money?
The main reason why I'm procastinating is because we are considering moving up the housing ladder to a bigger house probably double the price (if we saw the right house tomorow we'd go for it, but i recon it'll be another 2 years+ before we move). In this case we would still have to have a mortgage around 50% LTV, and looking at the mortgage market I cant see anything as good as we are on (even before fees), so dont want to pay off one mortgage to then have to get another with worse conditions.
The Facts:
- current mortgage can exit at any time without penalty
- current mortgage Interest rate 1.79% + Base (so 2.3%)
- Roughly house value £250K and current LTV 50%
- have over 6 months salary other saving (ISA) which will be untouched
- No other debt
When me and my wife first moved in together we rented one house. I wasn't a fan of the hassle of being a landlord so sold last year which is where the cash came from. Since then its been in a high interest saving account (3%) which after tax wasn't far off mortgage rate so for the sake of liquidity kept it there. This is coming to an end and now saving rates have dropped right down.
It's tempting to pay off for the compfort of it, but i know i'll look back and think there was a better way to do this. Equally putting money into an ineffecient place now doesn't appeal incase we take longer to find the "forever house".
Had a search on forum and didn't find anything about this - most post are about paying off mortage, or getting 2nd home.
So what would you do? Is there an obvious alternative I've missed here?