Question re mortgages etc

owenthomas · April 19, 2011

I have a query for the mortgage advisors or any IFA’s on the site..

My wife and I are thinking of moving but because our mortgage payment is relatively small I don’t know whether we should sit tight for the next few years or make the move now.

Essentially, I have a house with an outstanding balance of approx 80k. Our mortgage payment is £625 per month with 15 years left to pay. Our current mortgage deal ends in September. I currently save £325 per month but could afford to put a few quid more away if need be. If i had to i could save approx £500 per month and still be ok for my own pocket money.

I'm personally veering towards staying put and making an attempt to bring the mortgage term down so we can pay it off within the next 5 years. Due to questions/concerns raised by 'the boss' i now don’t know whether to do any of the following:

1) In September when we go to the bank to renew our mortgage terms should I bring down the years to approx 12 years using approx £200 of my £325 saving to make up the difference this will cost in mortgage payments. The last time we renewed we brought the term down by about 9 months but this time i'd go further;

2) Stay at approx 15 years term time and save each month as I am doing but at the end of the year pay off approx 4 or 5 thousand quid off the mortgage;

3) Do some form of the above to make an attempt to pay off my mortgage in the next 5 years – need advice on what would save me most money interest wise etc.

4) If I did the above and paid off my mortgage in 5 years should I then:

4a) Let my current house out and get a new mortgage using the (lets say) £600 per month letting fee as savings;

4b) Sell my current home and bank the 140k as savings;

4c) Sell my current home and use the 140k towards a deposit on somewhere bigger/better;

4d) Invest the 140k in a holiday home abroad that I could let out to bring in a little income;

You may even think none of the above and have your own ideas but any guidance would be greatly appreciated. Thanks

Murphman · April 19, 2011